W.P.(C) 14779/2021 Page 1 of 21

*

IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 16^th October, 2023

Pronounced on: 07^th November, 2023

+

W.P.(C) 14779/2021 & CM APPLs. 46500/2021, 47436/2021

INDIAN FLEXIBLE INTERMEDIATE BULK CONTAINER

ASSOCIATION

..... Petitioner

Through:

Mr. Pramod Kumar and Mr. Jayant

Kumar, Advocates.

versus

DIRECTOR GENERAL OF FOREIGN TRADE ..... Respondent

Through:

Mr. Abhinav Dubey and Mr. Harender

Singh,

Advocates.

Mr.

Vineet

Malhotra, Advocate for DGFT.

Mr. Rakesh Kumar, CGSC with Mr.

Sunil Kumar, Advocate for UOI.

CORAM:

HON'BLE THE CHIEF JUSTICE

HON'BLE MR. JUSTICE SANJEEV NARULA

JUDGMENT

SANJEEV NARULA, J:

1. The Petitioner has approached this Court under Article 226 of the

Constitution of India, challenging the notification dated 29^th January, 2020,¹

published by Department of Commerce, Ministry of Commerce and Industry,

Government of India [hereinafter “impugned notification”]. In the said

1 Public Notice No. 58/2015-2020.

Digitally Signed

By:SAPNA SETHI

Signing Date:07.11.2023

15:41:21

Signature Not Verified

W.P.(C) 14779/2021 Page 2 of 21

notification, Respondent No. 1–Directorate General of Foreign Trade

[hereinafter“DGFT”], has retrospectively revoked the benefit under the

Merchandise Exports from India Scheme [hereinafter“MEIS”] in respect of

Flexible Intermediate Bulk Container [hereinafter “FIBC”] bags, with effect

from 07^th March, 2019.

2. The Petitioner argues that the impugned notification is both arbitrary

and unlawful, primarily because of its retrospective application. The decision

has resulted in significant financial setbacks for the Petitioner’s member-units

and has adversely impacted the export potential of FIBC bags. In light of these

concerns, the Petitioner seeks directions against the Respondents to ensure

that the impugned notification is applied prospectively. Consequently,

benefits under the MEIS scheme should be extended for the disputed period

– from 07^th March, 2019 till the date of the issuance of the impugned

notification.

BACKGROUND AND PETITIONER’S SUBMISSIONS

3. Mr. Pramod Kumar, learned counsel for Petitioner, narrates the factual

background and raises several contentions summarised as follows:

3.1

Petitioner-company is a nodal association in India dealing with

manufacturers of FIBC, and leading bulk packaging companies in India

engaged in manufacturing and exporting FIBC across the globe. The FIBC

bags, commonly known as “Jumbo Bags”/ “Big Bags”, are made up of

“Technical Textile” being “Warp and Weft Woven Polypropylene” and are

designed to hold and carry loads upto 2000 kg – per the product classification

of DGFT they are classified under the head ITC-HS 63053200.

Digitally Signed

By:SAPNA SETHI

Signing Date:07.11.2023

15:41:21

Signature Not Verified

W.P.(C) 14779/2021 Page 3 of 21

3.2.

Manufacturing of FIBC bags is a labour-intensive activity, which

generates employment of 800 to 3000 people per manufacturing unit, and an

equally large number in ancillary and downstream industries. Statistically,

India represents more than 20% of the global trade in FIBC. The FIBC sector

is a major export earner for India, contributing nearly USD 1 billion in trade

annually.

3.3.

By way of notification dated 01^st April, 2015,² DGFT had notified

tables relating to MEIS schedule of countries with ITC-HS code wise listing

of product along with reward rates under Appendix 3B thereof, which

provided for 2% benefit for FIBC bags for the period from 01^st April, 2015 to

29^th October, 2015. Thereafter, DGFT notified an amendment to the Table-2

of Appendix 3