Court Orders Respondents to Issue License for Duty Credit Scrips

The court directed the Respondents to issue the necessary license for the balance duty credit scrips amounting to Rs. 4,22,16,175.00 for the year 2005-2006 within four weeks. The Writ Petition was allowed without any order as to costs, emphasizing the delay in granting the Petitioner the full benefit under the Target Plus Scheme.

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Issues Involved:
1. Eligibility of the Petitioner for balance/additional duty credit scrips under the Target Plus Scheme.
2. Retrospective amendment to the Target Plus Scheme and its legal implications.
3. Compliance with procedural requirements for issuance of duty credit scrips.
4. Validity and enforceability of alleged government dues.

Issue-wise Detailed Analysis:

1. Eligibility of the Petitioner for Balance/Additional Duty Credit Scrips:
The Petitioner, a partnership firm engaged in manufacturing and exporting electrical cables and equipment, sought additional duty credit scrips amounting to Rs. 4,22,16,175.73 under the Target Plus Scheme. The scheme, effective from 01.04.2004, aimed to accelerate export growth by rewarding star export houses with a minimum threshold export turnover. The Petitioner’s exports increased by 119.34% from 2004-2005 to 2005-2006, qualifying them for a 15% duty credit entitlement. Initially, the Petitioner received scrips for 5% of the incremental growth due to a retrospective amendment but sought the remaining 10% after the Supreme Court ruled the amendment could not apply retrospectively.

2. Retrospective Amendment to the Target Plus Scheme:
The Government issued Notification No.08 of 2006 on 12.06.2006, reducing the duty credit entitlement to 5% retrospectively from 01.04.2005. This amendment was challenged and ultimately, the Supreme Court in Director General of Foreign Trade Vs. Kanak Exports held that the amendment could only apply prospectively from 12.06.2006. Following this judgment, the Government issued Notification No.6/2015-2020 on 08.05.2017, making the amendment prospective and setting up Zonal Committees for claim scrutiny. The Petitioner renewed its claim for the balance 10% entitlement for the year 2005-2006.

3. Compliance with Procedural Requirements for Issuance of Duty Credit Scrips:
The Petitioner submitted all required documents, including no dues certificates, to the Respondents. Despite repeated submissions and clarifications, the Petitioner faced continuous demands for additional documents from Respondent No.3. The Zonal Committee, in its 11th meeting on 25.09.2020, conditionally approved the Petitioner’s claim subject to clearance from the customs department regarding alleged dues related to non-submission of Bank Realization Certificates (BRCs). The Petitioner contended that no government dues were pending.

4. Validity and Enforceability of Alleged Government Dues:
The Zonal Committee’s minutes noted dues reported by customs related to non-submission of BRCs. However, the Court observed that no specific demand or quantification of dues was mentioned. The Court clarified that "government dues" refers to enforceable obligations payable to the government. Since no quantified dues were established, the alleged non-submission of BRCs could not be construed as pending government dues. The Court emphasized that the Petitioner had already received partial benefit under the scheme, and there was no justifiable reason to withhold the remaining benefit.

Conclusion:
The Court directed the Respondents to issue the necessary licence for the balance duty credit scrips amounting to Rs. 4,22,16,175.00 for the year 2005-2006 within four weeks. The Writ Petition was allowed without any order as to costs, underscoring the inordinate delay in granting the Petitioner the full benefit under the Target Plus Scheme.

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