Foreign trade policy amendments upheld, but export incentive claims had to be decided afresh by a reasoned order.

Amendments to the Foreign Trade Policy limiting duty credit entitlement were treated as clarificatory and not retrospective, and the policy concession could be modified or withdrawn in public interest without infringing any vested right or Articles 14 and 19(1)(g). The challenge to the notifications therefore failed. However, the amended clause requiring greater scrutiny of claims above the prescribed value obliged the Regional Authority to apply its mind and give reasons. A bare rejection without a speaking order was inconsistent with the amended scheme, so the pending claims had to be reconsidered afresh by a reasoned decision.

---

---

Issues: (i) Whether the notifications amending the Foreign Trade Policy and limiting the duty credit entitlement were unconstitutional or in retrospective operation; (ii) whether the rejection of the petitioner's claims without reasons was sustainable in view of the requirement of greater scrutiny by the Regional Authority.

Analysis: The amendments introduced to the policy were held to be clarificatory and not retrospective. The grant of an export incentive is a policy concession and may be modified or withdrawn in accordance with public interest, so the notifications did not infringe any enforceable vested right or violate Articles 14 and 19(1)(g) of the Constitution of India. However, the inserted clause providing that claims in excess of the prescribed value would be subjected to greater scrutiny required application of mind and a reasoned disposal by the Regional Authority. A bare rejection without reasons was therefore inconsistent with the scheme as amended.

Conclusion: The challenge to the validity of the notifications failed, but the petitioner was entitled to reconsideration of its claims by a speaking order under the amended policy.

Final Conclusion: The policy amendments were upheld, yet the authorities were directed to decide the petitioner's pending claims afresh by a reasoned order within the stipulated time.

Ratio Decidendi: A policy amendment limiting export incentives is valid if it is clarificatory or otherwise justified in public interest, but where the governing clause requires claims to undergo greater scrutiny, the authority must record reasons and cannot reject them summarily.

---