Export incentive scheme limits cannot be expanded by clarification; duty credit scrip claims required scrutiny, not an absolute cap.

Duty credit scrip benefits under the export incentive scheme were held not to be subject to an absolute Rs. 20 lakh cap. The 2012 scheme provided 2% of incremental exports and did not fix any monetary ceiling, while the 2013 notification only required claims beyond the stated value to face greater scrutiny by the Regional Authority. Read harmoniously and purposively, the clarification could not add a restriction absent from the policy, because that would undermine the export-incentive object and create arbitrariness. The impugned clarification was therefore invalid and liable to be quashed.

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Issues: Whether Notification No. 44(RE-2013)/2009-2014 and the impugned clarification could be construed as imposing an absolute cap of Rs. 20 lakhs on IEIS duty credit scrips, and whether the clarification was valid.

Analysis: The 2012 scheme granted a duty credit scrip at 2% of incremental exports, subject to specified eligibility exclusions, but did not prescribe any monetary ceiling. The 2013 notification added that benefits for the last quarter of 2012-13 would be limited to 25% growth or incremental growth of Rs. 10 crores, whichever was less, and that claims in excess of this value would be subjected to greater scrutiny by the Regional Authority. Read harmoniously and purposively, the second clause could not be treated as redundant; it necessarily contemplated claims above Rs. 20 lakhs and only required closer scrutiny. A contrary construction would introduce a restriction not found in the policy, defeat its export-incentive object, and create arbitrariness.

Conclusion: The notifications did not impose an absolute cap of Rs. 20 lakhs, and the impugned clarification was invalid and liable to be quashed.

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