The main legal point established in the judgment is that exporters cannot claim the benefit of additional licence based on previous policies when the new policy explicitly excludes the exported item from eligibility. The court emphasized that policy decisions regarding incentives are subject to change and cannot be claimed as a matter of right.

JUDGMENT :

M.R. Shah, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 26.06.2008 passed by the High Court of Judicature of Bombay at Goa in Writ Petition No. 286/1996, by which the Division Bench of the High Court has dismissed the said writ petition by holding that the appellant shall not be entitled to the benefit of additional licence on the export of processed iron ore during the period April, 1990 to March, 1991, the exporter has preferred the present appeal.

2. The facts leading to the present appeal in a nutshell are as under:

That the appellant is engaged inter alia in the export of processed iron ore and is a recognised trading house. Under the Indian Foreign Trade Policy (hereinafter referred to as the ‘Exim Policy’) 1988-1991, there was a provision of ‘additional licence’ and a trading house would be eligible to ‘additional licence’ on the basis of the admissible exports in the preceding licensing year. Para 212 of the Exim Policy, 1988-1991 provided that in considering the eligibility of an exporter for recognition as a trading house based on Net Foreign Exchange (NFE) earnings from export of items specified in Appendix 12 shall not qualify. At the relevant time, Appendix 12 provided that export of “Minerals and ores – unprocessed” would be ineligible for considering the grant of additional licence. In the year 1990, there was a change in the Exim Policy and the Director General, Foreign Trade came out with a new policy, namely, Exim Policy, 1990-93. There was an amendment in Appendix 12 and the list of ineligible items which earlier was “Minerals and ores – unprocessed”, in the new Appendix 12, it was stated to be “Minerals and ores”.

2.1 It is the case on behalf of the appellant that relying upon the original Exim Policy, 1988-91 and acting upon the said policy, the appellant entered into a contract with one NKK Corporation, Japan on 7.2.1990, for export of processed iron ore, which was not an ineligible item in Appendix 12 under the Exim Policy, 1988-91. However, the appellant actually exported the processed iron ore and realized NFE earnings of Rs.52,00,51,848/- for the year 1990-91. The export was made between the period April, 1990 to March, 1991 during the new Exim Policy, 1990-1993. The appellant applied to the Assistant Chief Controller of Imports and Exports for grant of additional licence for value of Rs.6,08,46,000/- against FOB value of export of processed iron ore amounting to Rs.52,00,51,848/- for the year 1990-91.

2.2 Vide letter dated 23.7.1992, the application of the appellant for grant of additional licence came to be rejected by the Assistant Chief Controller of Imports and Exports on the ground that there was no provision for grant of additional licence in the then current policy of 1992-97. In an appeal preferred by the appellant, the Joint Director General of Foreign Trade remanded the matter to the Assistant Chief Controller of Imports and Exports for a fresh adjudication. Vide its order dated 30.04.1993, the Assistant Chief Controller of Imports and Exports again rejected the said application by observing that the item “iron ore processed” exported by the appellant during April, 1990 to March 1991 is included in the Appendix 12 of the Exim Policy, 1990-93 and therefore the same is not eligible for additional licence during the corresponding licensing period, i.e., 1991-92.

2.3 The appellant preferred an appeal challenging the order dated 30.04.1993 before the Joint Director General of Foreign Trade, which was rejected on 2.9.1993. The appellant preferred a second appeal before the Additional Director General of Foreign Trade. The Additional Director General of Foreign Trade by order dated 05.10.1994 rejected the second appeal for the reason that the application for additional licence was time barred. In the writ petition filed by the appellant, by order dated 13.09.1995, the High Court remitted the matter to the Additional Director General of Foreign Trade to co