2021 (9) TMI 906 - HC - Customs

Declination to allow the claim for reward under the Merchandise Exports From India Scheme (MEIS) - HELD THAT - In Anu Cashews and Mangalath Cashews 2019 (11) TMI 795 - KERALA HIGH COURT learned Single Judge of the Kerala High Court was dealing with an identical situation where in the shipping bill the exporter had inadvertently ticked No while clearly mentioning in the shipping bill as has been done in the present case that he intended to claim reward under MEIS . The learned Single Judge perused the screen shot which confirmed that indeed the exporter had indicated the above intention in the shipping bill although inadvertently No had been ticked in the reward column - The learned Single Judge held that the denial of a claim for export benefit could not have been done in a mechanical manner merely because there was a technical lapse on the part of the exporter concerned in not checking a particular box in the web portal more so when there was sufficient indication from the other details entered therein that pointed to the exporter s intention to claim the reward. In the present case too with the basic facts not being disputed viz. that the Petitioner declared its intent to claim the reward in as many words in the shipping bill in question itself and indavertently ticked N in the reward column in the shipping bill in question the Court finds no reason to deny the relief claimed for by the Petitioner which has been granted by various High Courts. The Court sets aside the impugned decision dated 6th and 13th August 2020 of the PRC as communicated by the DGFT on 20th August 2020 and directs the Opposite Parties the sub-ordinate agents to allow the benefit of the reward under the MEIS to the Petitioner in respect of the shipping bill in question dated 14th June 2018 - Petition allowed.

Summary

Issues:
Challenge to orders declining reward claim under MEIS for a shipping bill, interpretation of FTP provisions, requirement of marking intent in shipping bill, impact of inadvertent error in marking 'Y' or 'N', reliance on previous judgments for similar cases.

Detailed Analysis:

1. The challenge in the petition was against the orders declining to allow the claim for reward under MEIS for a specific shipping bill due to the inadvertent marking of 'N' instead of 'Y'. The petitioner exported ferro alloys and held a valid importer exporter code.

2. The Foreign Trade Policy (FTP) contains provisions for Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS) to provide rewards to exporters. Duty Credit Scrips (DCS) are granted under MEIS, and exporters must declare intent in the shipping bill to claim rewards.

3. The petitioner exported to South Korea under a shipping bill eligible for MEIS reward. Despite indicating the intent to claim the reward on the shipping bill, an inadvertent error led to marking 'N' instead of 'Y', causing the claim denial.

4. The petitioner sought relaxation from the Policy Relaxation Committee (PRC) due to the error, citing difficulties faced by exporters in similar situations. Previous judgments from Kerala, Madras, and Bombay High Courts supported extending benefits for inadvertent errors in marking 'Y' or 'N' in shipping bills.

5. The court found merit in the petitioner's argument, aligning with the past judgments that emphasized the exporter's clear intent despite marking errors. The court set aside the PRC's decision and directed the authorities to allow the MEIS benefit for the disputed shipping bill.

6. The judgment highlighted the procedural nature of the error and the fundamental objective of MEIS to reward exporters. It emphasized that inadvertent mistakes in marking 'Y' or 'N' should not deprive eligible exporters of benefits, as long as the intent is evident from other details.

7. The court's decision was based on ensuring fairness and consistency in applying MEIS rules, considering the exporter's genuine intent and the technical nature of the error. The relief granted to the petitioner was in line with the principles established in previous judgments.

8. Ultimately, the court allowed the writ petition, setting aside the PRC's decision and directing the authorities to issue the necessary certificate for the petitioner to claim the MEIS benefit for the disputed shipping bill within a specified timeframe. No costs were awarded in the case.