Foreign trade policy clarifications cannot retrospectively withdraw incentives or block independent export benefit claims.

A trade notice issued under the foreign trade policy cannot be used as a mere clarification if it changes the substantive scope of an incentive entry or retrospectively divests benefits already granted. Here, the notice was treated as exceeding the power to clarify doubts because it sought to narrow a broad goods description and support recovery of duty credit scrips. An independent MEIS claim could not be stalled merely because a separate FPS recovery dispute was pending; any recovery had to follow the prescribed procedure and not by obstructing a fresh benefit application. The notice was therefore set aside and the MEIS applications required processing in accordance with law.

---

---

Issues: (i) whether the impugned trade notice could be treated as a mere clarification so as to deny FPS benefits already granted and authorise recovery of duty credit scrips; (ii) whether the respondents could withhold processing of the petitioners' MEIS applications on the basis of the disputed FPS recoveries.

Issue (i): whether the impugned trade notice could be treated as a mere clarification so as to deny FPS benefits already granted and authorise recovery of duty credit scrips.

Analysis: The policy and the relevant entry were found to contain a wide description of goods, and the body of the entry could not be controlled by the heading so as to confine it only to bicycle parts. The trade notice was held to go beyond clarification and to alter the substantive content of the entry itself. Clause 2.3 of the Foreign Trade Policy 2009-14 enabled clarification of doubts, but not an amendment of the scheme or a retrospective divestment of benefits already granted.

Conclusion: The trade notice could not retrospectively withdraw FPS benefits already granted, and the proposed recovery of such benefits was not sustainable.

Issue (ii): whether the respondents could withhold processing of the petitioners' MEIS applications on the basis of the disputed FPS recoveries.

Analysis: The MEIS claim stood on a separate footing from the earlier FPS benefits. Even assuming a recovery dispute under FPS, that could not justify stalling consideration of applications under a fresh scheme. Recovery, if permissible, had to follow the procedure prescribed for that purpose and could not be enforced by obstructing an independent benefit claim.

Conclusion: Withholding processing of the MEIS applications was impermissible.

Final Conclusion: The impugned trade notice was set aside, no recovery could be pursued on the basis of that notice, and the respondents were required to process the MEIS applications in accordance with law.

Ratio Decidendi: A clarification under the foreign trade policy cannot be used to amend a scheme entry or to retrospectively divest benefits already granted, and an independent export incentive claim cannot be blocked to compel disputed recovery under an earlier scheme.

---