Prospective application of EPCG procedure: revised third-party export rules cannot curtail benefits under earlier authorisations.

Third-party exports under the EPCG scheme were recognised under the earlier Foreign Trade Policy and procedure, under which the full realised value of the shipping bill counted toward export obligation. A revised procedure from 05.12.2017 required actual realisation through the normal banking channel from the third-party exporter's account to the authorisation holder's account, but that procedural change could not be used to alter the substantive effect of EPCG authorisations already issued under the prior regime. The policy circular and amended handbook were therefore treated as prospective only and could not be applied to pre-existing authorisations, as delegated procedure cannot retrospectively curtail accrued benefits.

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Issues: Whether the policy circular and the amended procedure governing third-party exports under the EPCG scheme could be applied to EPCG authorisations issued before 05.12.2017.

Analysis: The Foreign Trade Policy permitted third-party exports, and the original procedure counted the full realised value of the shipping bill towards export obligation. The revised procedure introduced from 05.12.2017 required actual realisation through the normal banking channel from the third-party exporter's account to the authorisation holder's account. The power under the Foreign Trade (Development and Regulation) Act, 1992 and the Foreign Trade Policy enabled the procedural framework to be amended, but not so as to alter the substantive effect of authorisations already issued under the earlier regime. The policy circular did not distinguish between authorisations issued before and after 05.12.2017 and, in effect, changed the manner of computation of export obligation for pre-existing authorisations. Such application was held to be beyond the authority of the respondents and contrary to the settled principle that delegated procedure cannot retrospectively curtail accrued benefits.

Conclusion: The amendment in paragraph 5.10(c) of the revised Handbook of Procedures and the policy circular were held to be prospective only, and they could not be applied to EPCG authorisations issued prior to 05.12.2017.

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