2025 (1) TMI 1385 - HC - Customs

Petitioner wins MEIS scrips for 50 shipping bills despite scheme expiration, administrative delays cannot negate accrued benefits

Jindal Drugs Pvt. Ltd. Versus The Union of India & Ors.

Jindal Drugs Pvt. Ltd. Versus The Union of India & Ors. - 2025:BHC - OS:1281 ISSUES PRESENTED and CONSIDEREDThe core legal issues considered in this judgment are:1. Whether the Petitioner is entitled to the benefits under the Merchandise Exports from India Scheme (MEIS) despite the expiration of the scheme.2. Whether the delay caused by the Customs Department in amending the shipping bills can be used as a justification to deny the Petitioner the MEIS benefits.3. Whether the Respondents can deny the MEIS benefits based on the technicality that the scheme had expired by the time the Petitioner sought to claim the benefits.ISSUE-WISE DETAILED ANALYSIS1. Entitlement to MEIS Benefits Post-ExpirationRelevant legal framework and precedents: The MEIS was introduced to promote the export of notified goods and provide exporters with rewards to offset infrastructural inefficiencies. The scheme was initially set to expire on 28th February 2022. The Court referred to previous decisions in Technocraft Industries (India) Limited and Larsen and Toubro Limited, where reliefs were granted under similar circumstances.Court's interpretation and reasoning: The Court found that the expiration of the MEIS does not preclude the Petitioner from claiming benefits that had accrued during the scheme's validity. The delay in processing the amendment of shipping bills was attributed to the Customs Department's inaction, not the Petitioner.Key evidence and findings: The Petitioner had applied for amendment of the shipping bills on 27th April 2018, well within the scheme's active period. The CESTAT had allowed the amendment, which should relate back to the original application date.Application of law to facts: The Court applied the principle that benefits accrued during the life of the scheme should not be denied due to administrative delays. The CESTAT's order allowed the amendments, reinforcing the Petitioner's entitlement.Treatment of competing arguments: The DGFT's argument that the scheme's expiration barred the processing of applications was dismissed as meritless. The Court emphasized that government departments cannot rely on their own delays to deny benefits.Conclusions: The Petitioner is entitled to the MEIS benefits, and the expiration of the scheme does not negate this entitlement.2. Delay by Customs DepartmentRelevant legal framework and precedents: Section 149 of the Customs Act, 1962, allows for the amendment of shipping bills. The Court referred to the CESTAT's decision, which permitted the amendment.Court's interpretation and reasoning: The Court held that the delay by the Customs Department in amending the shipping bills was unjustified and should not prejudice the Petitioner's rights.Key evidence and findings: The Petitioner had consistently sought amendments since 2018, but the Customs Department failed to act promptly, leading to the current dispute.Application of law to facts: The Court found that the Customs Department's inaction was the primary cause of delay, and the Petitioner should not be penalized for this.Treatment of competing arguments: The Customs Department's appeal against the CESTAT's order was withdrawn, indicating a lack of substantial grounds to oppose the amendment.Conclusions: The delay caused by the Customs Department cannot be a ground to deny the MEIS benefits to the Petitioner.SIGNIFICANT HOLDINGSPreserve verbatim quotes of crucial legal reasoning: 'One arm of the Government cannot rely upon the wrong-doing of another arm and thereby deny the benefit to the Petitioner.'Core principles established: The expiration of a scheme does not negate accrued benefits if administrative delays are responsible for the inability to claim those benefits timely. Government departments must act in a timely manner to avoid prejudicing the rights of individuals.Final determinations on each issue: The Court directed Respondent Nos. 2 to 4 to process the Petitioner's applications for MEIS scrips and release them if eligible, within 15 days. The Respondents were instructed not to deny eligibility based on technical or systemic issues.