Court orders reissuance of duty free scrips to foreign entity subsidiaries under FTP, clarifies SFIS eligibility criteria

The court ruled in favor of the petitioners, directing the reissuance of duty free scrips within a specified timeframe. It held that subsidiaries of foreign entities were entitled to benefits under FTP 04-09 and rejected the argument that they were excluded under FTP 09-14. The court emphasized the importance of complying with its decisions and clarified the eligibility criteria for SFIS benefits under different Foreign Trade Policies.

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Issues:
1. Interpretation of eligibility criteria under the Served From India Scheme (SFIS) for duty free licences.
2. Dispute regarding eligibility of subsidiaries of foreign entities as Indian Service Providers under different Foreign Trade Policies.
3. Non-compliance by the respondents with the court's decision to provide benefits under the SFIS Scheme.
4. Pending appeal related to the provisions of the SFIS Scheme under different Foreign Trade Policies.

Issue 1: Interpretation of eligibility criteria under the SFIS:
The petitioners were issued duty free licences under the SFIS, which were recalled by the respondents on the grounds that one petitioner was a subsidiary of a Foreign Entity and thus ineligible for benefits. The court noted that under the FTP 04-09, "All Service Providers" were entitled to SFIS benefits, and subsidiaries of foreign entities were not excluded. The court held the decision to deny benefits under FTP 04-09 to be unsustainable and directed the reissuance of transferable duty free scrips equivalent to those recalled.

Issue 2: Dispute over eligibility of subsidiaries under different FTPs:
The court highlighted the difference between FTP 04-09 and FTP 09-14 regarding the eligibility for SFIS benefits. While FTP 04-09 applied to "all service providers," FTP 09-14 limited benefits to "Indian Service Providers." The principal controversy was whether subsidiaries of foreign entities could be considered Indian Service Providers. The court rejected the contention that subsidiaries were excluded under FTP 09-14 and emphasized that the petitioners were entitled to benefits under FTP 04-09.

Issue 3: Non-compliance with court's decision:
Despite the court's decision granting benefits under the SFIS Scheme, the respondents did not provide the benefits to the petitioners. The court noted the lack of compliance by the respondents and directed the issuance of transferable duty free scrips within a specified timeframe.

Issue 4: Pending appeal related to SFIS provisions under different FTPs:
The judgment mentioned a pending appeal before the Division Bench regarding the SFIS Scheme under FTP 09-14. The court clarified that the appeal related to FTP 09-14 provisions and not FTP 04-09, which was the focus of the present petition.

In conclusion, the court allowed the petition, directing the reissuance of duty free scrips within a specified timeframe and emphasizing the entitlement of the petitioners to benefits under the SFIS Scheme. The judgment highlighted the importance of complying with court decisions and clarified the applicability of different Foreign Trade Policies to the eligibility criteria for SFIS benefits.

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