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of <h1>Court affirms export subsidy entitlement under Sugar Development Fund Act, 1982; rejects govt. denial.</h1> <h3>Union of India Register of Consumer Affairs Department of Food & Public Distribution, Versus M/s. Bidar Sahakara Sakkare Karkhane Ltd.</h3> Union of India Register of Consumer Affairs Department of Food & Public Distribution, Versus M/s. Bidar Sahakara Sakkare Karkhane Ltd. - TMI Issues Involved:1. Entitlement to Export Subsidy under the Sugar Development Fund Act, 1982.2. Validity of the denial of export subsidy by the Government of India.3. Interpretation of SDF Rule 20 and its application to the respondent.Issue-wise Detailed Analysis:1. Entitlement to Export Subsidy under the Sugar Development Fund Act, 1982:The appellant, Union of India, challenged the order of the learned Single Judge which allowed the writ petition filed by the respondent, Bidar Sahakara Sakkare Karkhane Limited (BSSKL), and held that BSSKL was entitled to export subsidy under the Sugar Development Fund Act, 1982. The learned Single Judge interpreted the provisions of the Act and the relevant notification dated 21.06.2002, which provided for a subsidy to domestic sugar manufacturers to cover internal transport and freight charges.2. Validity of the denial of export subsidy by the Government of India:The Government of India denied the export subsidy to BSSKL on the grounds that the sugar was sold to an exporter, M/s. Bannari Amman Sugars Limited (BASL), who imported raw sugar under the Advance Licence scheme. The appellant argued that under SDF Rule 20, export subsidy was not admissible in such cases. However, the respondent contended that the Advance Licence was issued to BASL and not to BSSKL, and that BSSKL manufactured the sugar from locally grown sugar cane and exported it through BASL under government directives.3. Interpretation of SDF Rule 20 and its application to the respondent:The court examined SDF Rule 20 and the relevant clauses of the Gazette Notification dated 21.06.2002. It found that the scheme did not exclude manufacturers who sold sugar to exporters like BASL. The purpose of the subsidy was to promote exports and reduce the cost burden on manufacturers by defraying internal transport charges. Clause 20(3) and its explanations clearly supported the respondent's case, as they allowed for reimbursement of internal transport and freight charges for sugar exported through an exporter, provided the manufacturer bore these costs.Judgment Analysis:The court concluded that the reasons provided by the Government of India for denying the export subsidy were not tenable. The scheme did not distinguish between direct exports by manufacturers and exports through other entities. The court noted that the respondent was compelled by government directives to supply sugar to BASL for export. Furthermore, the court highlighted that the appellant could not discriminate against BSSKL when another manufacturer, M/s. Mahatma Gandhi Sahakara Sakkare Kharkhane Ltd., Bhalki, had been granted the subsidy.Conclusion:The court dismissed the appeal filed by the Union of India, upholding the learned Single Judge's order. It directed the appellant to compute and release the export subsidy to the respondent within two months, emphasizing that the scheme's purpose was to support domestic sugar manufacturers by promoting exports and reducing their internal transport costs. The appeal was dismissed with no costs, and the related applications were disposed of accordingly.
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