JUDGMENT

SANJEEV NARULA, J:

1. The Petitioner has approached this Court under Article 226 of the Constitution of India, challenging the notification dated 29th 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.

Signature Not Verified Digitally Signed W.P.(C) 14779/2021 Page 1 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 07th 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 07th 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.

Signature Not Verified Digitally Signed W.P.(C) 14779/2021 Page 2 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 01st 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 01st April, 2015 to 29th October, 2015. Thereafter, DGFT notified an amendment to the Table-2 of Appendix 3B vide notification dated 24th November, 2017,3 relating to ITC- HS Code 2017 for the period from 01st November, 2017 to 30th June, 2018, enhancing the MEIS benefit for FIBC bags under Serial No. 4311, ITC-HS Code 63053200, from 2% to 4%. The benefits were continued beyond the said period by way of notification dated 11th May, 20184.

3.4. Leveraging the benefits provided under the MEIS, the Petitioner’s member units proactively expanded their export operations concerning FIBC bags. As a result, India emerged as one of the leading global exporters of FIBC bags, even amidst intense international competition from countries such as China, Bangladesh, Turkey, Vietnam, and others. India was acknowledged as a global leader in the FIBC sector recording a market share of 30% in 2018 – being the top exporter to several countries with major market share viz., 2 Public Notice No. 2/2015-2020. 3 Public Notice No. 42/2015-2020. 4 Public Notice No.07/2015-2020.

Signature Not Verified Digitally Signed W.P.(C) 14779/2021 Page 3 of 21 United States (44%), Germany (35%), France (37%), Netherlands (38%), Spain (62%) and United Kingdom (63%), amongst others. The