TaxTMI 
TaxTMI 
2010 (9) TMI 34
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....y Respondent No. 3 by way of a clarification to "Vishesh Krushi Upaj Yojana" scheme (hereinafter referred to "VKUY scheme). Petitioner in W.P. No. 1665 of 2006 also challenge the rejection letter issued to them rejecting their application for the benefit of the said scheme. In so far as the said Writ Petition No. 1665 of 2006 is concerned, the rejection letter is dated 27.3.2006 whereas in Writ Petition No. 2221 of 2007, the petitioners have claimed that their 19 applications for issue of duty free credit entitlement script should be allowed. In so far as Writ Petition No. 1175 of 2007 is concerned, apart from the challenge to the said circular dated 28.2.2006 the Petitioners have in the said writ petition challenged the show cause notices ....
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....vensis) between the period April, 2004 and March, 2005. The said product Mentha Avrvensis is listed in the Appendix 37A. It is the case of the Petitioners that the Mentha Arvensis is the plant and is never exported as a plant and is exported in the form of Oil. The oil is extracted by the farmers according to Petitioners, is not commercially viable to export. Such oil is purchased by the Petitioners and subjected to steam distillation followed by partial removal of menthol by refrigeration and fractional distillation resulting in (i) menthol crystals which contain a higher concentration of menthol and (ii) mentha oil in a refined form, for which an export market exists. 6. The Respondents vide circular dated 28th February, 2006 wh....
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....sed." 8. As can be seen from the said order, the application of the petitioners was solely rejected on the ground of the said policy circular dated 28.2.2006 as according to respondents, the item covered under Appendix 37A under minor forest produce is Menthol BP/USP. 9. On behalf of Respondents, an affidavit in reply has been filed by one Mr. Vijay N. Shewale, Joint Director General of Foreign Trade dealing with the claims and contentions raised in the Petition. Though the order as extracted above, in a very cryptic manner mentions the reasons for rejection of the Petitioners' application. By the said affidavit the respondents have now sought to justify the action by mentioning elaborate reasons for the said rejection. ....
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....ld also defeat the very object of the scheme. The learned senior counsel further submitted that the circular cannot have an effect of amending the policy which can be amended only as per the procedure prescribed under Section 5 of the Foreign Trade Development and Regulation Act, 1992. The learned senior counsel further submitted that the circular is only an administrative instruction or guideline and being contrary to the parent scheme cannot prevail over the parent scheme. The learned senior counsel lastly submitted that the order dated 27.3.2006 is passed in breach of principles of natural justice in as much as the Petitioners have not been heard in the matter which was necessary as the Petitioners have acted upon the said scheme. In sup....
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....pondents fairly concedes to the said position. 13. Another aspect to be considered is that the Petitioners have on the basis of the representation made under the scheme, have acted pursuant to it and when the Petitioners sought to seek benefit of the said scheme, the applications of the Petitioners have been rejected on the basis of circular dated 28.2.2006. Though we find merit in the submission advanced on behalf of the Petitioners that the scheme cannot be modified by circular issued by the respondents, it is not necessary for us to go into the said aspect as we are required to set aside the order dated 27.3.2006 on the ground of violation of principles of natural justice in view of the fact that the Petitioners were not heard ....
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....e outcome of the hearing before the Director General of Foreign Trade in respect of the applicability of the said Circular dated 28.2.2006. 15. We accordingly set aside the impugned orders passed in Writ Petition No. 1665 of 2006 and Writ Petition No. 2221 of 2007 and issue the following directions in all the petitions : (1) The Director General of Foreign Trade shall hear the Petitioners in all the above petitions on the applicability of the circular dated 28.2.2006. (2) The Director General of Foreign Trade would also hear the Petitioners on the applications of the Petitioner made for the benefit of VKUY scheme and especially the entitlement for duty credit scrip. The Petitioners shall appear before the Direc....