Pre-amendment DFIA benefits survive later restrictive changes, with revalidation and basic customs duty relief allowed.

A DFIA issued under the policy in force on the date of issue cannot be deprived of vested benefits by later restrictive DGFT amendments absent express retrospective authority, particularly where the new conditions are impossible for post-export licences to satisfy. Pre-01.08.2013 DFIAs remained governed by the earlier policy framework, including the relevant DFIA and SION norms, whether held by the original licensee or a transferee. On that basis, revalidation of the licences was directed and exemption from basic customs duty on Soda Ash was allowed. Relief for anti-dumping duty exemption was declined because the challenge did not extend to the relevant customs notifications.

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Issues: (i) Whether the restrictive amendments introduced by Notification No. 31 (RE-2013)/2009-14, the related Circular and Public Notice, and Notification No. 90 (RE-2013)/2009-14 could be applied to DFIAs issued before 01.08.2013, including to transferees; (ii) whether the petitioner was entitled to revalidation of the DFIAs and to exemption from basic customs duty on the import of Soda Ash under the pre-existing DFIA scheme and SION norms; (iii) whether exemption from anti-dumping duty could be granted.

Issue (i): Whether the restrictive amendments introduced by Notification No. 31 (RE-2013)/2009-14, the related Circular and Public Notice, and Notification No. 90 (RE-2013)/2009-14 could be applied to DFIAs issued before 01.08.2013, including to transferees.

Analysis: The DFIA licences were issued on a post-export basis and export obligation had already been fulfilled before the impugned changes. The amended requirement of endorsement in shipping bills and the insistence that only inputs actually used in the exported product could be imported was held impossible of compliance for such licences. The Court held that neither Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 nor Para 1.2 of the Foreign Trade Policy, 2009-14 authorised retrospective divestment of rights already attached to existing DFIAs. The pre-existing policy framework, including Para 4.2.3, Para 4.2.6 and the contemporaneous DGFT circular, governed the licences throughout their life.

Conclusion: The impugned restrictive provisions were held inapplicable to DFIAs issued prior to 01.08.2013, whether held by the original licensee or a transferee.

Issue (ii): Whether the petitioner was entitled to revalidation of the DFIAs and to exemption from basic customs duty on the import of Soda Ash under the pre-existing DFIA scheme and SION norms.

Analysis: The Court found that Soda Ash was a permissible input under the relevant SION and under the DFIAs as originally issued. Since the impugned restrictions could not be applied retrospectively, the petitioner retained the entitlement available on the date of issue of the licences. The licences had expired without being utilisable because of the challenged restrictions, and revalidation was justified. The Court also held that the customs authorities had to allow the benefit of the DFIA to the extent of basic customs duty.

Conclusion: Revalidation of the two DFIAs was directed and exemption from basic customs duty on Soda Ash was allowed.

Issue (iii): Whether exemption from anti-dumping duty could be granted.

Analysis: The challenge did not extend to the customs notifications governing anti-dumping duty exemption, and the Court declined to grant relief on that aspect.

Conclusion: Relief for anti-dumping duty exemption was refused.

Final Conclusion: The writ petition succeeded in part: the retrospective application of the impugned DGFT measures to pre-01.08.2013 DFIAs was disapproved, revalidation and basic customs duty relief were granted, but anti-dumping duty relief was denied.

Ratio Decidendi: A DFIA issued under the policy in force on the date of issue cannot be deprived of its vested benefits by subsequent restrictive amendments lacking express retrospective authority, especially where compliance with the new conditions is impossible for post-export licences.

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