FTWZ export benefits under the Foreign Trade Policy were revisited where the claimant was not an FTWZ unit.

The Foreign Trade Policy 2015-20 exclusion in paragraph 3.06(vii) applies to exports made by units in a Free Trade Warehousing Zone, and the challenge turned on whether a supplier using FTWZ channels but not itself being an FTWZ unit could still claim Merchandise Exports from India Scheme benefits. The clarification relied on paragraph 3.06(i) and the SEZ framework to treat DTA supplies to FTWZ as ineligible, but did not deal with the distinct contention that the petitioner was not an FTWZ unit. The earlier rejection orders were also found unsustainable because the competent authority had not examined the proper policy interpretation. The rejection orders and clarification were set aside and the claim was remitted for fresh consideration.

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Issues: Whether exporters supplying goods through a Free Trade Warehousing Zone, while not being a unit in the FTWZ, are entitled to benefits under the Merchandise Exports from India Scheme, and whether the earlier rejection orders and later clarification could be sustained.

Analysis: The exclusion in paragraph 3.06(vii) of the Foreign Trade Policy 2015-20 applies to exports made by units in FTWZ. The impugned clarification treated supplies from DTA to FTWZ as ineligible by relying on paragraph 3.06(i) and on the nature of FTWZ under the Special Economic Zones Act, 2005, but did not address the distinct contention that the petitioner was not a FTWZ unit and had only exported goods through FTWZ. The earlier rejection orders were also set aside because the proper policy interpretation had not been examined by the competent authority.

Conclusion: The rejection orders and the clarification were set aside, and the matter was remitted for fresh consideration of the petitioner's claim under the relevant FTP provisions.

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