Retrospective export incentive cuts are impermissible unless authorised, while later brand registration can relate back under the scheme.

A subsequent administrative circular cannot retrospectively reduce an export incentive unless the scheme clearly authorises retrospective operation, so the earlier 10% Cash Compensatory Support on spice exports could not be cut back for the earlier period. The later circular reducing support to 7% operated only prospectively from its effective date. The text also states that, under the 16 July 1987 circular, registration of the brand name with the Spices Board was not a condition precedent to entitlement where the circular treated the specified class of exports as eligible from that date; later registration could relate back to that operative date. The balance support was therefore payable at the applicable rates for the identified periods.

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Issues: (i) Whether the circular dated 13th February, 1987 could retrospectively reduce Cash Compensatory Support on export of spices from 10% to 7% with effect from 1st July, 1986. (ii) Whether exporters of spices were entitled to Cash Compensatory Support at 10% on exports made on and after 16th July, 1987 where the brand name was registered with the Spices Board subsequent to that date.

Issue (i): Whether the circular dated 13th February, 1987 could retrospectively reduce Cash Compensatory Support on export of spices from 10% to 7% with effect from 1st July, 1986.

Analysis: The earlier circular fixed Cash Compensatory Support at 10% for export of spices with effect from 1st July, 1986 and stated that it would remain operative up to 31st March, 1989. The subsequent circular sought to reduce the rate to 7% retrospectively. A prior decision on the same scheme had already held that such retrospective reduction was impermissible. The same reasoning applied to the present petitions, and the exporters were entitled to the higher rate for exports made before the later circular took effect.

Conclusion: The retrospective reduction was invalid, and the exporters were entitled to Cash Compensatory Support at 10% for exports made from 1st July, 1986 to 12th February, 1987 and at 7% for exports made from 13th February, 1987 to 15th July, 1987.

Issue (ii): Whether exporters of spices were entitled to Cash Compensatory Support at 10% on exports made on and after 16th July, 1987 where the brand name was registered with the Spices Board subsequent to that date.

Analysis: The circular dated 16th July, 1987 made 10% support available for exports of spices in consumer packs under specified brand names and required registration of the brand name with the Spices Board. The text of the circular showed that registration was not a condition precedent for entitlement from 16th July, 1987; rather, once the brand name was registered, the exports made from that date were to be treated as exports under a specified brand name. The later registration therefore related back to the operative date of the circular for the purpose of the scheme.

Conclusion: The exporters were entitled to Cash Compensatory Support at 10% on exports made from 16th July, 1987 onwards, notwithstanding that registration of the brand name with the Spices Board occurred later.

Final Conclusion: The petitions succeeded and the respondents were directed to calculate and pay the balance Cash Compensatory Support at the applicable rates for the three periods identified in the judgment.

Ratio Decidendi: A subsequent administrative circular cannot retrospectively curtail an accrued export incentive unless the governing scheme clearly authorises such retrospective operation, and where a circular makes registration effective for a specified class of exports from a stated date, later registration may satisfy the condition for that date if the circular so indicates.

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