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Castrol India Ltd. Versus Union of India And Others

Entitlement of Duty Credit Scrips under Served From India Scheme (SFIS) declared deficient – revenue tried to disqualify the Petitioner on the basis that the brand under which the Petitioner operates is not an Indian brand. - Held That:- It is undisputed that brand "Castrol India" is not an Indian brand – Matter squarely covered in case of Naman Hotels Private Ltd. [2015 (9) TMI 564 - BOMBAY HIGH COURT] – Challenge to the deficiency letter fails – Decided in favour of Revenue. - Writ Petition No .....

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ty and validity of the deficiency letters dated 11th May, 2015 and 14th May, 2015 (Exh 'C' to the Petition) under which Respondent No.3 informed the Petitioner that their Applications for Duty Credit Scrips amounting to ₹ 25,24,483 (for FY 2012-13) and ₹ 29,00,354 (for FY-2013-14) were deficient as the Petitioner was a foreign brand and hence not entitled to avail of the benefits under the "Served From India Scheme" (hereinafter referred to as "SFIS") as p .....

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rant India Pvt Ltd Vs. Union of India & Ors decided on 27th January, 2015. It is the case of the Petitioner that by not issuing the Duty Credit Scrips, the Respondents are denying the benefits granted under the SFIS and exposing the Petitioner to payment and liability of customs duty, although the Petitioner is lawfully entitled to avail of the aforesaid benefits. It is in these circumstances that the Petitioner has approached this Court in its extraordinary, equitable and discretionary juri .....

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354 for the Financial Year 2013-14 (aggregating to a total of ₹ 54,24,837/-). By their letters dated 11th May, 2015 and 14th May, 2015 Respondent No.3 informed the Petitioner that their Applications were deficient as CASTROL INDIA LIMITED was a foreign brand and hence not entitled to benefits under the SFIS. 5. By placing reliance on the decision of the Delhi High Court in Yum Restaurant's case (supra) it is the Petitioner's contention that the Respondents have arbitrarily and with .....

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risdiction, and the delay in favourably processing the Applications of the Petitioner is unlawful. The Petitioner submits that the impugned deficiency letters, relying on the Policy Interpretation Committee (PIC) minutes dated 27th December, 2011, have been issued de hors the provisions of the FTP 2009-14 and are ab-initio null and void, and therefore liable to be quashed by us in our extraordinary, equitable and discretionary jurisdiction under Article 226 of the Constitution of India. 6. With .....

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(S. C. Dharmadhikari, J.) was a party, in the case of Shri Naman Hotels Private Ltd v/s The Union of India and Others Writ Petition No.33 of 2015 and other connected Writ Petitions decided on 17th August, 2015. On perusing the aforesaid decision as well as the contentions raised in the present Writ Petition, we find that the same arguments that have been canvassed before us, were also put forth by the parties in the case of Naman Hotels Private Ltd. Writ Petition No.33 of 2015 and other connect .....

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of services so as to create a powerful and unique 'Served From India brand,' instantly recognized and respected worldwide.' We are in agreement with Mr.Jetley learned Counsel that the object which is sought to be achieved would be only by encouraging those entities and conferring benefits and giving incentives to such companies who create an Indian brand. This is therefore, apparent. By referring to the identity of share holders and the nation they belong, the policy makers are not t .....

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India and must get recognition and respect world over. It is not the soil or piece of land which is important but the involvement of Indian suppliers, which is predominant. Their engagement and involvement is therefore primarily referred and throughout the scheme which is a duty credit entitlement. Eventually the eligibility criteria has been framed and evolved for the purpose of Indian Service Providers and who provide services listed in Appendix 41 of HBP Volume 1, who have free foreign exchan .....

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of such ineligible services are listed. They will not be entitled for benefits under FSIS scheme. 'Served from India' brand is thus granting a incentive to those eligible service providers who fulfill the eligibility criteria. The Petitioner cannot claim a vested right in matters of duty credit or exemption from payment of a duty or tax. None can say that the mandate of Article 19 (1) (g) of the Constitution of India is violated merely because at certain time and on certain occasions, t .....

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e enshrined in Articles 14 and 19 (1) (g) can be accepted. and Therefore, the word 'Entitlement'as is found in paragraph 3.12.4 is important. That Service providers of services listed in Appendix 41 of HBP Volume 1 would alone be eligible and such eligible service providers will be entitled to Duty Credit Scrip equivalent to 10% of free foreign exchange earned during current financial year from 1st January 2011 and for services rendered prior to 1st January, 2011, Appendix 10 of HBP Volu .....

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eme entitles a person earning free foreign exchange to the extent indicated therein to avail of the benefits therein. Anybody who earns free foreign exchange of at least Rs.Ten lakhs is not entitled as claimed. That will be contrary to the object and purpose of making the scheme. That as rightly urged by Mr.Jetley is to accelerate growth in export of services so as to create a powerful and unique 'Served From India brand ' instantly recognized and respected world over.' That cannot b .....

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world over as Indian brand. If Indian Service Provider is the one who is to be encouraged through home exports and the growth of the same is to be achieved then, it is not possible to agree with Mr.Dada that FSIS scheme or benefits thereunder can be availed of by parties like the petitioner. We do not see how paragraph 3.12.7 or objectives in relation to other scheme particularly "foreign market scheme"would be of any assistance. We are not considering that scheme, reward or incentives .....

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and are entitled to the benefits. We are also not as much concerned with the nature of services, paragraph 9.52 which defines the term "services" include all tradable services covered under General Agreement on Trade in Services (GATS) and earning free foreign exchange. Further paragraph 9.53 defines the term "Service Provider". That means a person providing: "(i) Supply of a 'service' from India to any other country; (ii) Supply of a 'service' from Indi .....

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a to service consumer of any other country in India, supply of a service from India through commercial or physical presence in territory of any other country, supply of a service in India relating to exports paid in free foreign exchange or in Indian rupees as having being paid for in free foreign exchange by RBI are all referred to. It is to promote a unique 'Served from India brand instantly recognized and respected world over that the definition has been worded accordingly. If the main ob .....

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are equally important and they read as under: 3.6 "Served from India Scheme (SFIS) (a) Policy for SFIS is given in Chapter 3 of FTP (b) An application for grant of Duty Credit Scrip for foreign exchange earned during current financial year, shall be filed on monthly/quarterly/half-yearly/annual basis, in ANF 3B along with documents prescribed therein at the option of the applicant to be exercised along with first application for the current financial year. This option will be filed with ju .....

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emittances other than those earned for rendering of services would not be counted for entitlement. Thus other sources of foreign exchange earnings such as equity or debt participation, donations, receipt of repayment of loans etc and any other inflow of foreign exchange, unrelated to rendering of service would be ineligible. Following shall not be taken into account for calculation of entitlement: (a) Foreign Exchange remittances: 1. related to Financial Services Sector 1. Raising of all types o .....

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alth care Institutions like equity participation donations etc (However, remittances received on account of medical treatment, surgery, testing, consultancy and health care provided by the institution shall be eligible;) (d) Foreign exchange turnover by Educational Institutions like equity participation, donations, etc (However remittances received on account of the course fees and consultancy provided by the institution shall be eligible); (e) Export turn over relating to services of units oper .....

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