1. Export of processed iron ore — Claim for additional license under Exim Policy — Change in policy eligibility criteria during export period. (Para 2 )
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2022 Supreme(SC) 1125
SUPREME COURT OF INDIA
M.R. SHAH, KRISHNA MURARI, JJ.
Chowgule & Company Limited - Appellant
Versus
Assistant Director General of Foreign Trade & Others - Respondents
Civil Appeal No. 8225 of 2009
Decided On : 04-11-2022
Important Points
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.
Subject
Commercial Law - Export Regulations
Act Referred
Headnote
additional licence - export of processed iron ore - Exim Policy 1988-1991, Exim Policy 1990-93 - Para 212, Appendix 12 - The court discussed the eligibility for additional licence under the Exim Policy 1988-1991 and the subsequent changes in the Exim Policy 1990-93. It highlighted the ineligibility of processed iron ore for additional licence under the new policy and the denial of the benefit based on the revised policy. The court also considered the doctrine of promissory estoppel and the principle of non-discrimination in granting benefits.
Fact of the Case:
The appellant, an exporter of processed iron ore, claimed the benefit of additional licence under the Exim Policy 1988-1991 for exports made during 1990-91. The claim was denied under the new Exim Policy 1990-93, which included processed iron ore in the list of ineligible items.
Finding of the Court:
The court found that the appellant was rightly denied the benefit of additional licence under the new Exim Policy 1990-93, as processed iron ore was ineligible for the benefit. The court rejected the appellant's claim based on promissory estoppel and non-discrimination.
Issues: Eligibility for additional licence under different Exim Policies, applicability of promissory estoppel, and non-discrimination in granting benefits.
Ratio Decidendi: The court held that the appellant cannot claim the benefit of additional licence under the old Exim Policy, which was not in existence, and that the doctrine of promissory estoppel does not apply to policy decisions regarding incentives. The court also ruled that the appellant cannot claim the benefit based on the grant of benefits to others.
Final Decision: The appeal was dismissed, and the court upheld the denial of the benefit of additional licence to the appellant.
Legal Category Hierarchy
Advocates Appeared:
For the Appellant(s) : Mr. Ravindra Shrivastav, Sr. Adv. Mr. Sumit Goel, Adv. Mr. Tanuj Agarwal, Adv. Mr. Abhijeet Shrivastav, Adv. For M/s. Parekh & Co., AOR.
For the Respondent(s): Mr. N. Venkataraman, ASG, Mr. Arijit Prasad, Sr. Adv., Mr. H.R. Rao, Adv., Mr. Udai Khanna, Adv., Ms. Priyanka Das, Adv., Mr. S.A. Haseeb, Adv., Mr. V.C.S. Bharti, Adv. Mr. Raj Bahadur Yadav, AOR, Mr. D. S. Mahara, AOR.
For the Appellant(s) : Mr. Ravindra Shrivastav, Sr. Adv. Mr. Sumit Goel, Adv. Mr. Tanuj Agarwal, Adv. Mr. Abhijeet Shrivastav, Adv. For M/s. Parekh & Co., AOR.
For the Respondent(s): Mr. N. Venkataraman, ASG, Mr. Arijit Prasad, Sr. Adv., Mr. H.R. Rao, Adv., Mr. Udai Khanna, Adv., Ms. Priyanka Das, Adv., Mr. S.A. Haseeb, Adv., Mr. V.C.S. Bharti, Adv. Mr. Raj Bahadur Yadav, AOR, Mr. D. S. Mahara, AOR.
Table of Contents
2. Export occurred under the new policy where the item was ineligible — Incentives are policy decisions and not vested rights. (Para 5 , 7 )
3. Promissory estoppel does not apply to policy-based incentives; eligibility is determined by the policy in force on the date of actual export. (Para 7 )
4. Appeal dismissed — High Court order denying the additional license upheld. (Para 9 )
5. Does the doctrine of promissory estoppel apply to the withdrawal of incentives under a government trade policy?
No. The court held that granting incentives is a policy decision that may be varied or withdrawn. No exporter can claim such incentives as a matter of right, making the doctrine of promissory estoppel inapplicable to such policy decisions. (Para 7 )
6. What is the relevant date for determining eligibility for export incentives under the Exim Policy?
The relevant date is the date on which the actual export is made, as the incentive in the form of an additional license is based on actual exports in the previous year. (Para 7 )
7. Can a party claim a benefit based on the fact that other similarly situated persons were granted that benefit erroneously?
No. The court ruled that there is no negative discrimination that allows a party to claim a benefit they are not entitled to simply because others were granted such benefits de hors the scheme. (Para 8 )
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
