MEIS scrip validity protects imports made during currency; later cancellation or benefit reduction cannot retrospectively deny concession.

A validly issued MEIS scrip remained effective for imports made during its currency, so a later reduction of the benefit from 3% to 2% or subsequent cancellation could not retrospectively deprive the importer of the concession already availed. The Tribunal applied the principle that a licence or scrip obtained by fraud is voidable, not void ab initio, and that later cancellation does not affect imports completed on the strength of a valid scrip. It further held that use by the original holder or a transferee made no difference, and the alleged misclassification was not relevant to the appeal. The duty demand, interest and penalty were unsustainable.

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Issues: Whether reduction of the MEIS customs duty benefit from 3% to 2% by subsequent cancellation or modification of the scrips could be applied to imports made by the appellant during the period when the scrips were valid.

Analysis: The Tribunal applied the settled principle that a licence or scrip obtained by fraud is not void ab initio but only voidable, and that cancellation made after import does not affect imports already completed on the strength of a valid scrip. Once the DGFT had issued the MEIS scrips and they were presented and utilized during their validity, the benefit available at that time could not be denied merely because the scrips were later reduced from 3% to 2% or cancelled thereafter. The Tribunal also held that it made no difference whether the scrip was used by the original holder or a transferee, and the allegation of deliberate misclassification was not relevant to the issue in appeal.

Conclusion: The subsequent reduction of MEIS benefit could not be applied retrospectively to the appellant's imports, and the duty demand, interest, and penalty were unsustainable.

Ratio Decidendi: A validly issued scrip or licence remains effective for imports made during its currency, and later cancellation or reduction does not retrospectively extinguish the benefit already availed.

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