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2022 Supreme(Online)(Guj) 1819
HIGH COURT OF GUJARAT
N.V. ANJARIA, BHARGAV D. KARIA, JJ
AGARWALLA TIMBERS PVT LTD – Appellant
Versus
UNION OF INDIA – Respondent
R/SPECIAL CIVIL APPLICATION NO. 15296 of 2013 | R/SPECIAL CIVIL APPLICATION NO. 3286 of 2014
For the Appellants/Petitioners: Hardik Modh
For the Respondents: Devang Vyas, Utkash Sharma, IH Syed, Parth Bhatt, Trusha Patel
Restrictions imposed by administrative circulars cannot alter entitlements derived from statutory notifications, which must be amended through proper legislative procedures.
Headnote:(A) Foreign Trade Development and Regulation Act, 1992 - Section 3 - Customs Tariff Act, 1975 - Section 3(5) - Petition challenges public notice and circular restricting re-credit of Duty Entitlement Passbook (DEPB) scrips and denial of refund of Special Additional Duty (SAD). Court finds restrictions imposed by impugned notice & circular invalid, as they contravene statutory provisions. (Paras 11-16)
(B) Legal Principles - The amendment of exemption notifications must be made through proper amendments, not by administrative circulars.
(C) Legal Decision - A circular cannot impose additional conditions or restrict statutory entitlements outlined in the primary notification.
(D) The validity of scrips must not be unjustly restricted without substantive legislative change. (Paras 11-15)
Facts of the case:
The petitioner, engaged in timber trading, claimed refunds for SAD paid through DEPB but faced restrictions due to public notice and circular issued by the authorities. The petitioners argued they incurred delays due to administrative inefficiencies.
Findings of Court:
The court finds that the petitioners faced no fault in claiming their rights, and the delay in issuance of refunds was caused by the authorities.
Issues: Whether restrictions issued via circulars can impose additional conditions on statutory entitlements and if the petitioners are entitled to refunds.
Ratio Decidendi: The court stated that both the impugned public notice and circular cannot restrict the rights of petitioners arising from clear statutory provisions and prior notifications, affirming that only legislation can modify such entitlements.
Result: Petitions are allowed; respondents must process refunds through RTGS or equivalent.
| Table of Content |
|---|
| 1. jurisdictional background of refund claims. (Para 3 , 6) |
| 2. challenging restrictions on refunds as ultra vires. (Para 7) |
| 3. analysis on validity of notifications and amendments. (Para 9 , 10 , 11 , 12) |
| 4. invalidity of the impugned notifications. (Para 15 , 16) |
| 5. entitlement to refund and interest. (Para 17 , 18) |
| 6. final order disposing the petitions. (Para 19) |
JUDGEMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1.Heard learned advocate Mr. Hardik Modh for the petitioners, learned advocate Mr.Utkarsh Sharma for the respondent nos. 2 to 7 and learned Additional Solicitor General Mr.
Devang Vyas for respondent no.1 - Union of India.
2.Having regard to the controversy involved in these petitions which is in a narrow compass, with the consent of the learned advocates for the respective parties, the matter is taken up for final hearing and would be disposed of by this common judgment.
3.By these petitions, the petitioners have challenged the public notice No.6(RE-2013)/2009-14 dated 18.04.2013 issued by respondent no.3 - Director General of Foreign Trade (for short “DGFT”) and Circular No.18/2013-Cus dated 29.04.2013 issued by respondent no.2-Central Board of Excise and Customs, Ministry of Finance(for short “CBEC”) and letter dated 23.08.2013 issued by respondent no.4 - the Assistant Commissioner of Customs for denial of transfer of re- credited DEPB (Duty Entitlement Passbook) scrips and/or Reward Scheme scrips and has also prayed for consequential reliefs. In Special Civil Application No.3286/2014, Order-in-Appeal dated 10.04.2014 passed by the Commissioner Appeals is also under challenge.
4.In order to consider the reliefs prayed for by the petitioners, it would be necessary to consider the scheme of Foreign Trade Development and Regulation Act, 1992 (For short “FTDR Act”), the provisions of Foreign Trade Policy (For short “FTP”)under which the DEPB benefits are available to the importers and and various policy circulars in relation to re-credit of SAD as under :
- : FTDR Act : I) The FTDR Act was enacted to provide for development and regulation of Foreign Trade by facilitating imports into and augmenting exports from India.
- II) Under Section 3 of the FTDR Act, respondent no.1-Union of India is empowered to publish in the Official Gazette to make provision for the development and regulation and of foreign trade. Under sub-section (2) of Section 3, the Central Government may by order, publish in the Official Gazette, prohibit, restrict or otherwise regulate import/export of goods subject to such exceptions as it may deem fit.
- III) Under Section 5, the Central Government is empowered to formulate and announce by notification in the Official Gazette, the Exim Policy which may be amended from time to time and FTP is also issued which is generally formulated for 5 years and the same is revised/amended by means of Annual Supplement each year.
- : FTP : IV) Under Para 2.3 of the FTP, the Director General Of Foreign Trade (DGFT) is empowered to interpret the policy and in case of any doubt or question which emerges thereof or in the matter of classification of any item in the ITC(HS) or in the Handbook, the decision of DGFT shall be final and binding.
- V) Chapter 4 of the FTP deals with Duty Exemption and Remission Schemes. Para. 4.1 of the FTP deals with Duty Entitlement Passbook (DEPB) Scheme which enables duty free import of inputs required for export production.
- Duty Exemption Schemes consist of (a) Advance Authorisation scheme and (b) Duty Free Import Authorisation (DFIA) scheme. A Duty Remission Scheme enables post export replenishment/remission of duty on inputs used in export product. Duty Remission Schemes consist of (a) DEPB Scheme and (b) Duty Drawback (DBK) Scheme.
- VI) Para. 4.3.4 of the FTP provides that DEPB and/or items imported against
