2025 (5) TMI 425 - HC - Customs

Govt Directed to Complete Pending MEIS Export Scrip Applications, Review Delayed Cases by May 2025

Axiom Cordages Ltd. Versus The Union of India & Ors.

The SC directed Respondents to process 111 MEIS export scrip applications for the Petitioner, with 70 already processed. For two delayed applications, the ... Grant of scrips under the Merchandise Exports from India Scheme (MEIS) for the period June 2017 to August 2020 at the prescribed rate of 5% of FOB value - delay in filing two specific MEIS applications, allegedly caused by delayed uploading of Bank Realization Certificates - HELD THAT:- The Respondents are directed to forthwith allow 39 applications and issue the MEIS scrips in respect thereof to the Petitioner at the earliest and in any case not later than 7 days from today. The Petitioner is directed to attend the office of Respondent No. 3 on Friday, 02.05.2025 with all the documents pertaining to the said 2 applications referred to in paragraph 5 above and substantiate their claim before Respondent No. 3 - List for compliance on 07th May 2025. 1. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered by the Court were:Whether the Respondents were obligated to allow the Petitioner's 111 applications for grant of scrips under the Merchandise Exports from India Scheme (MEIS) for the period June 2017 to August 2020 at the prescribed rate of 5% of FOB value;Whether the delay in filing two specific MEIS applications, allegedly caused by delayed uploading of Bank Realization Certificates (e-BRCs) by the Petitioner's bankers on the DGFT portal, could be condoned despite the prescribed limitation period;Whether the Policy Relaxation Committee's (PRC) decision allowing MEIS benefits for shipping bills with realization within three years from export date, despite delayed e-BRC uploads, applied to the Petitioner's delayed applications;The applicability of the late cut penalty as per Para 9.02 of the Handbook of Procedures and whether applications filed beyond two years from the prescribed time limit become time barred;The procedural and substantive obligations of the Respondents in processing and issuing MEIS scrips, including compliance with prior Court orders and timelines for disposal of pending applications.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Obligation to Allow MEIS Applications for June 2017 to August 2020Legal Framework and Precedents: The MEIS scheme provides exporters with scrips equivalent to a percentage of FOB value to incentivize exports. The DGFT Handbook of Procedures governs the scheme, including application procedures and timelines. Earlier Court orders had set aside the impugned order denying the Petitioner's applications and directed the Respondents to allow 111 applications within 8 weeks.Court's Interpretation and Reasoning: The Court observed that 70 applications had already been processed and scrips issued, indicating partial compliance. The Respondents acknowledged their obligation to process the remaining 41 applications. The Court emphasized the necessity of compliance with the prior order dated 21st January 2025 and directed immediate processing of the pending applications.Key Evidence and Findings: Respondents' admission that 70 applications were allowed and undertaking to process 39 more applications within 7 days. The Court relied on the prior order and the Respondents' statements as evidence of the obligation to grant scrips.Application of Law to Facts: The Court applied the principle of compliance with statutory schemes and prior judicial directions, holding that the Respondents must allow all eligible applications under MEIS without undue delay.Treatment of Competing Arguments: No significant opposition was raised to the processing of these 39 applications; the Respondents agreed to process them.Conclusion: The Court directed the Respondents to forthwith allow and issue scrips for the 39 pending applications within 7 days.Issue 2: Delay in Filing Two Specific Applications and Limitation BarLegal Framework and Precedents: The MEIS scheme and DGFT Handbook prescribe timelines for filing applications. Para 9.02 of the Handbook mandates a late cut penalty for delayed applications and specifies that applications filed beyond two years from the time limit become time barred. The Policy Relaxation Committee (PRC) has the authority to grant condonation for delays caused by reasons beyond the exporter's control.Court's Interpretation and Reasoning: The Petitioner contended that delay in uploading e-BRCs by their bankers was beyond their control, justifying condonation. The PRC's meeting dated 01.10.2018, whose minutes were uploaded on 18.10.2018, had allowed MEIS benefits for shipping bills with realization within three years, even if e-BRCs were uploaded late. The Court noted the Respondent No. 2's clarification that late cut penalties apply and that applications filed after two years are time barred. However, the Court did not decide the limitation issue outright but directed the Petitioner to substantiate their claim with documentary evidence before Respondent No. 3.Key Evidence and Findings: Minutes of the PRC meeting allowing relaxation, email dated 24th April 2025 from the Assistant Development Commissioner clarifying late cut application and limitation bar, and the Petitioner's explanation of delay due to e-BRC upload issues.Application of Law to Facts: The Court balanced the statutory limitation and penalty provisions with the PRC's relaxation policy, recognizing the exceptional circumstances claimed by the Petitioner. It entrusted the Respondent No. 3 with the responsibility to decide the two delayed applications after hearing the Petitioner and examining the documents.Treatment of Competing Arguments: The Respondents argued for strict application of limitation and late cut penalty as per the Handbook. The Petitioner argued for condonation based on PRC's relaxation and delay beyond their control. The Court avoided a final ruling on limitation, instead ordering further proceedings.Conclusion: The Court directed the Petitioner to present documents on 02.05.2025 and Respondent No. 3 to decide the two applications by 06.05.2025.Issue 3: Compliance with Prior Orders and TimelinesLegal Framework and Precedents: The Court's prior order dated 21st January 2025 mandated the Respondents to allow the Petitioner's MEIS applications within eight weeks. Procedural fairness and judicial compliance principles require timely execution of Court orders.Court's Interpretation and Reasoning: The Court observed partial compliance and extended time for completing the process. It reiterated the need for expeditious disposal and compliance, emphasizing the Respondents' undertaking and setting strict deadlines.Key Evidence and Findings: Respondents' processing of 70 applications, undertaking to process 39 applications within 7 days, and requests for extension of time.Application of Law to Facts: The Court enforced its supervisory jurisdiction to ensure compliance with its orders and statutory schemes, balancing procedural fairness and administrative feasibility.Treatment of Competing Arguments: The Respondents sought extensions citing administrative reasons; the Court granted extensions but imposed firm deadlines.Conclusion: The Court scheduled compliance hearings and required digital signatures for order authenticity to facilitate prompt action.3. SIGNIFICANT HOLDINGSThe Court held:'The Respondents