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2020 Supreme(Bom) 1250
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
UJJAL BHUYAN, ABHAY AHUJA, JJ.
Ram Ratna International – Appellant
Versus
Union of India & Others – Respondent
Writ Petition (Stamp) No. 3769 of 2020
Decided On : 29-10-2020
For the Petitioner:Prakash Shah a/w Jas Sanghavi i/by PDS Legal, Advocates.
For the Respondents:Pradeep S. Jetly, Senior Advocate a/w Jitendra B. Mishra, Advocates.
The retrospective amendment to the Target Plus Scheme could not be applied retrospectively, and the delay in issuing the necessary license for the balance/additional benefit of duty credit scrips was unjustified and frustrated the objective of the scheme.
Headnote:
Target Plus Scheme - Export House - Foreign Trade (Development and Regulation) Act, 1992, paragraph 1.3 and paragraph 3.7.8 of the Foreign Trade Policy, 2004-2009 - Summary: Petitioner sought duty credit scrips under the Target Plus Scheme for high volume exports. The scheme provided for 5%, 10%, and 15% duty credit entitlement based on incremental export growth. A retrospective amendment curtailed entitlement to 5%, but Supreme Court held it could only be applied prospectively. Petitioner sought balance/additional duty credit scrips for the remaining 10% entitlement, which was delayed for 14 years. Court directed Respondents to issue the necessary license for the balance/additional benefit of duty credit scrips.
Fact of the Case:
Petitioner, a partnership firm engaged in manufacturing electrical cables and equipment for export, sought duty credit scrips under the Target Plus Scheme for high volume exports. A retrospective amendment curtailed entitlement to 5%, but Supreme Court held it could only be applied prospectively. Petitioner sought balance/additional duty credit scrips for the remaining 10% entitlement, which was delayed for 14 years.
Finding of the Court:
Court found that Petitioner was entitled to the balance/additional benefit of duty credit scrips for the amount of Rs.4,22,16,175.00 for the year 2005-2006 under the Target Plus Scheme. The delay in issuing the necessary license was unjustified and frustrated the objective of the scheme.
Issues: The main issue was the delay in issuing the necessary license for the balance/additional benefit of duty credit scrips under the Target Plus Scheme for the year 2005-2006.
Ratio Decidendi: The court held that the retrospective amendment to the Target Plus Scheme could not be applied retrospectively and that the Petitioner was entitled to the balance/additional benefit of duty credit scrips for the year 2005-2006. The delay in issuing the necessary license was unjustified and frustrated the objective of the scheme.
Final Decision: The court directed Respondents to issue the necessary license to the Petitioner for the balance/additional benefit of duty credit scrips for the amount of Rs.4,22,16,175.00 for the year 2005-2006 under the Target Plus Scheme within a period of four weeks from the date of receipt of a copy of the judgment.
JUDGMENT :
Ujjal Bhuyan J.
1. Heard Mr. Prakash Shah along with Mr. Jas Sanghavi, learned counsel for the Petitioner; and Mr. Pradeep Jetly, learned senior counsel alongwith Mr. Jitendra B. Mishra, learned counsel for the Respondents.
2. By filing this Petition under Article 226 of the Constitution of India, Petitioner seeks a direction to the Respondents to issue balance/additional duty credit scrips for an amount of Rs.4,22,16,175.73 under the Target Plus Scheme.
3. Case of the Petitioner is that it is a partnership firm constituted under the Partnership Act, 1932 having its office at Worli, Mumbai. It is engaged in the manufacturing of electrical cables and various other electrical equipments which are thereafter exported. Because of its high volume of exports, Petitioner was awarded and categorized as a three star export house.
4. As part of its foreign trade policy, Government of India introduced a scheme on 31.08.2004 called the Target Plus Scheme which was made effective from 01.04.2004. Objective of the Target Plus Scheme was to accelerate growth in exports by rewarding star export houses with minimum threshold export turnover of Rs.10 crores in the previous year. It is stated that the scheme provided for three slabs of entitlement of duty credit scripts which were as under:-
“a. Where the percentage incremental growth of exports was above 20% but below 25% the duty credit entitlement was 5% of the incremental growth.
b. Where the percentage incremental growth was above 25% but below 100% the duty credit entitlement was 10% of the incremental growth.
c. Where the percentage incremental growth was above 100% the duty credit entitlement was 15%.”
5. According to the Petitioner, it made net exports of Rs.42,21,61,757.21 in the year 2004-2005. Net exports of the Petitioner increased to Rs.91,45,81,389.72 in the next year i.e. 2005-2006, percentage of increase being 119.34 percent over the previous year. Thus, Petitioner became eligible under category ‘c’ of the scheme having incremental growth in exports above 100%, thus entitled to 15% of the incremental growth.
6. Directorate General of Foreign Trade, Department of Commerce, Ministry of Commerce and Industry, Government of India i.e. Respondent No.2 issued Notification No.08 of 2006 dated 12.06.2006. The said notification was issued in exercise of powers conferred by section 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with paragraph 1.3 and paragraph 3.7.8 of the Foreign Trade Policy, 2004-2009 making amendments to the Target Plus Scheme for the exports effected during the period 01.04.2005 to 31.03.2006. It was stated that the rate of entitlement would be 5% of the incremental growth clarifying that the said amendment would take effect for exports retrospectively from 01.04.2005.
7. Initially Petitioner had made an application under the scheme to Respondent No.3 on 18.07.2006 for issuance of duty credit scrips for an amount of Rs.6,33,24,263.00 at the rate of 15% of incremental growth covering the period 2005-2006 i.e., 01.04.2005 to 31.03.2006. However, in view of the Notification No.08 of 2006 Petitioner modified its prayer in terms of the said notification restricting its claim to 5% of the duty credit entitlement without prejudice to its claim to 15% entitlement.
8. It is stated that Respondent No.3 issued scrips to the Petitioner to the extent of 5% of the incremental growth vide licence dated 14.02.2007 for an amount of Rs.2,11,08,087.85.
9. Retrospective amendment to the Target Plus Scheme was challenged by export houses in different High Courts by way of Writ Petitions. Ultimately, the matter reached the Supreme Court and in Director General of Foreign Trade Vs. Kanak Exports, 2015 (326) ELT 26, Supreme Court held that amendment to the Target Plus Scheme could not be applied retrospectively. In other words, amendment to the above scheme would be prospective from 12.06.2006 and would not cover the exports for the year 2005-2006.
10. Following the judgm
