Foreign Trade Policy exit request cannot be refused for mere report defaults where no scheme benefit was availed.

A request to exit a Foreign Trade Policy scheme cannot be ed merely for failure to file periodic performance reports where no capital goods were imported or procured and no monetary benefit was taken under the scheme. The exit clause is directed at protecting the revenue where duty-related benefits have been enjoyed, and a purely procedural default does not itself create any duty liability or financial detriment. On the facts recorded, the unit had submitted a project progress report, and the rejection on the basis of non-submission of periodic reports was unsustainable. Permission to exit from the scheme was therefore due.

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Issues: Whether the petitioner's request to exit from the scheme could be rejected merely for non-furnishing of periodic performance reports when no capital goods had been imported or procured and no monetary benefit under the scheme had been availed.

Analysis: The exit clause in the Foreign Trade Policy was intended to ensure that a unit which had derived duty-related benefits could not leave the scheme without making good the liabilities arising from such benefits. The record showed that the petitioner had not imported or procured any capital goods for the project. The authority itself recorded that the petitioner had furnished an IT park progress report and that the grievance essentially rested on non-submission of periodic reports. That default was procedural in nature and did not create any duty liability or monetary detriment to the scheme. The plea based on availability of an appellate remedy was declined in view of the long pendency of the writ petition.

Conclusion: The rejection of the petitioner's request to exit from the scheme was unsustainable and the petitioner was entitled to permission to exit.

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