Export incentive interpretation: CST reimbursement under the policy extended to inter-unit purchases, and procedural appendices could not narrow entitlement.

Reimbursement of Central Sales Tax under the Foreign Trade Policy, 2009 was held to extend beyond purchases from Domestic Tariff Area units and to cover purchases from another Export Oriented Unit. The Court reasoned that Chapter 6 granted a substantive export incentive to Export Oriented Units, that goods manufactured by such units are goods manufactured in India for policy purposes, and that inter-unit supplies were not inherently excluded. It further held that a procedural appendix could prescribe implementation details but could not curtail or alter the entitlement created by the policy. The later 2015 amendment was treated as a course correction, and export incentive provisions were construed liberally to advance their object.

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Issues: Whether reimbursement of Central Sales Tax under paragraph 6.11(c)(i) of the Foreign Trade Policy, 2009 was confined to purchases from a Domestic Tariff Area unit or extended to purchases from another Export Oriented Unit, and whether paragraph 2 of Appendix 14-I-I could validly restrict that entitlement.

Analysis: Chapter 6 of the Foreign Trade Policy, 2009 was framed to grant incentives to Export Oriented Units, including reimbursement of Central Sales Tax on goods manufactured in India. The scheme of the chapter, including the permissibility of domestic sales and inter-unit supplies, showed no inherent bar on purchases from another Export Oriented Unit. The heading of paragraph 6.11 and the procedural appendix could not override the substantive entitlement conferred by the policy itself. The Development Commissioner and the DGFT were implementing authorities and could prescribe procedure, but they could not, through an appendix, curtail or alter the policy framed by the Central Government under the parent statute. The later 2015 policy amendment was treated as a course correction and supported the view that the earlier policy did not exclude reimbursement on purchases from other Export Oriented Units. The Court also held that goods manufactured by an Export Oriented Unit are goods manufactured in India for the purpose of the policy and that export incentive provisions must be construed liberally to advance their object.

Conclusion: The reimbursement entitlement was not confined to Domestic Tariff Area purchases, and the procedural appendix could not take away the substantive benefit under the policy.

Final Conclusion: The writ appeals failed because the respondent was entitled to reimbursement of Central Sales Tax even on purchases made from another Export Oriented Unit.

Ratio Decidendi: A substantive export incentive granted by the policy cannot be narrowed or defeated by a procedural appendix issued by a delegate, and such incentive provisions must be construed liberally to advance the policy objective.

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