Foreign trade policy benefits cannot be narrowed by circulars when the scheme does not impose the new restriction.

A registered export-house society had locus standi to challenge circulars and public notices because it represented affected members and avoided multiple identical proceedings. The DGFT and Department of Revenue could not, by circulars or notices, narrow the Target Plus Scheme by redefining "broad nexus" to require that imports be inputs used in the exported product, since that restriction materially reduced the policy entitlement and was not found in the scheme. Such a substantive policy change required amendment by the authority empowered under the Foreign Trade (Development and Regulation) Act, 1992. The impugned circulars, public notice and related amendment were therefore invalid.

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Issues: (i) whether the petitioner-society had locus standi to challenge the impugned circulars and public notices; (ii) whether the DGFT and the Department of Revenue could, by circulars and public notices, restrict the Target Plus Scheme benefit by redefining the scope of "broad nexus" and confining imports to inputs used in the exported product; (iii) whether such changes could validly be made without amendment under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992.

Issue (i): whether the petitioner-society had locus standi to challenge the impugned circulars and public notices.

Analysis: The petitioner-society represented affected export houses and star trading houses. A collective challenge by the registered society avoided multiple identical proceedings by individual members and was therefore maintainable.

Conclusion: The objection to maintainability failed.

Issue (ii): whether the DGFT and the Department of Revenue could, by circulars and public notices, restrict the Target Plus Scheme benefit by redefining the scope of "broad nexus" and confining imports to inputs used in the exported product.

Analysis: The scheme permitted duty credit for import of inputs, capital goods and allied items, and the original understanding of "broad nexus" linked imports to the product group of exported goods. The later circulars and public notices went further and imposed a substantive restriction by requiring the imported item to be an input used in the manufacture of the exported product. That restriction was not expressed in the policy and materially narrowed the entitlement.

Conclusion: The impugned circulars and public notices were ultra vires and could not stand.

Issue (iii): whether such changes could validly be made without amendment under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992.

Analysis: A substantive change in the export-import policy could be made only by amendment under the statutory power reserved to the Central Government. The DGFT could issue clarification, but not introduce a new condition inconsistent with the policy or retrospectively take away an accrued benefit.

Conclusion: The changes required statutory amendment and were invalid when made only by circulars and public notices.

Final Conclusion: The appeal failed, and the judgment striking down the impugned circulars, public notice and related amendment was upheld.

Ratio Decidendi: An administrative circular or public notice cannot impose a substantive restriction on a foreign trade policy benefit where the policy itself does not contain that condition, and any such policy change must be made by the authority empowered by statute to amend the policy.

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