Retrospective withdrawal of export incentive held impermissible where delegated policy narrowed accrued scheme benefits prospectively only.

Retrospective curtailment of Focus Product Scheme eligibility by a DGFT circular was beyond authority because the Foreign Trade Policy was framed by the Central Government, while DGFT's role was limited to advising and implementing it. The circular did not merely clarify the scheme; it narrowed eligible products and changed the scope of the incentive from a broader tariff classification to 33 items. As delegated policy or subordinate legislation, that change could operate only prospectively, and there was no statutory power to withdraw an accrued fiscal benefit retrospectively. The resulting recovery demands were therefore unsustainable, and the vested benefit already availed could not be recalled.

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Issues: Whether the Director General of Foreign Trade could retrospectively curtail eligibility under the Focus Product Scheme and issue demand letters for recovery of benefits already availed.

Analysis: The Foreign Trade Policy was framed by the Central Government under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, while the DGFT's role under Section 6 was limited to advising on policy and implementing it. The relevant policy provisions and the Handbook of Procedures showed that exports of notified products in Appendix 37D were entitled to FPS benefits, and the entry covering technical textiles was found to be unambiguous. The circular did not merely clarify an existing doubt but restricted the eligible products from the broader tariff classification to 33 items and thereby changed the scope of the scheme. As delegated legislation or policy amendment, such a change could operate only prospectively, because neither Section 5 nor Section 6(3) authorized retrospective withdrawal of an accrued incentive. The retrospective curtailment also amounted to recall of a vested benefit already utilized, offending Article 300A.

Conclusion: The retrospective restriction imposed by the impugned circular was without authority and the recovery demands based on it were unsustainable; the issue was decided in favour of the petitioners.

Ratio Decidendi: In the absence of express statutory authority, delegated policy or subordinate legislation cannot retrospectively withdraw or curtail an accrued fiscal benefit.

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