Retrospective policy restriction on DEPB credit held impermissible where later circular reduced accrued export entitlement.

A later circular that, in substance, imposed a new value cap on DEPB credit for woven jackets could not be applied retrospectively to exports already governed by the earlier policy regime. The court held that entitlement had to be determined by the DEPB rate prevailing on the date of export, and a beneficial policy change could not be used to curtail accrued benefits without demonstrated public interest or justification. Because the exporter had acted under the earlier regime and the later circular materially reduced the benefit, retrospective application was impermissible and the higher DEPB entitlement was upheld.

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Issues: Whether the exporter was entitled to DEPB credit at the rate applicable on the date of export for woven jackets shipped after 15 April 1998, and whether the circular dated 28 July 1998 introducing a value cap could operate retrospectively to reduce that entitlement.

Analysis: The applicable policy and procedural framework fixed DEPB rate and value cap with reference to the date of export. The later circular, though described as clarificatory, in substance introduced a value cap for woven jackets for the first time and therefore altered the exporter's entitlement to its detriment. The absence of any demonstrated public interest or justification for the drastic reduction in benefit reinforced the application of equitable protection. A beneficial change cannot be applied retrospectively to take away accrued entitlement, and an oppressive circular is to be applied prospectively. The exporter had also acted on the earlier policy regime and the irrevocable letter of credit prior to the change.

Conclusion: The exporter was entitled to DEPB credit at the rate prevailing on the date of export, namely the revised rate applicable to woven jackets without the later-imposed value cap, and the retrospective application of the circular was impermissible.

Final Conclusion: The challenge to the writ court's grant of relief failed, and the exporter's claim to the higher DEPB benefit was upheld.

Ratio Decidendi: A later circular that in substance imposes a new restriction reducing an exporter's entitlement cannot be applied retrospectively to exports already governed by the earlier policy regime, absent demonstrated public interest justifying the curtailment.

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