TaxTMI 
TaxTMI 
2016 (1) TMI 957
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....mber 2014. Although the facts in each of these four Writ Petitions filed under Article 226 of the Constitution of India are somewhat different, since they raise a common issue we have taken up them together. 2. In all four Writ Petitions, Rule. Respondents waive service. By consent, Rule made returnable forthwith and the Petitions taken up for hearing and final disposal. 3. We have heard learned Counsel for both sides. We propose to refer to the facts and the documents in Writ Petition Nos. 2122 of 2015, and, where necessary those in Writ Petition No. 1750 of 2015. 4. Briefly stated, the Petitioners' case is that in order to give a fillip to exports, the Government introduced an Incremental Export Incentivisation Scheme ("IEIS") by Notification No. 27(RE- 12)/2009-2014 dated 28th December 2012 Exhibit "B", pp. 49-54 to WP No. 2122 of 2015 ("the 2012 Notification"). This Notification inserted paragraph 3.14.4 in the Foreign Trade Policy ("FTP") 2009-2014. This Notification, while prescribing a number of restrictions, all of which the Petitioners accept, including a limitation as to the eligibility period or time, allowed a duty credit of 2% on the incremental growth in export ach....
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....tive to exports, the Central Government in 2012 decided to introduce the Incremental Exports Incentivisation Scheme. On 26th December 2012, it released a Press Note to this effect. Exhibit "A", p. 48 to WP No. 2212 of 2015 It is stated that the Union Minister for Commerce, Industries and Textile had announced a decision to grant incentive on incremental exports. This was period specific: the incentive would be available in respect of incremental exports made for the quarter January to March 2013 relative to the corresponding previous quarter of January to March 2012. The actual Scheme was introduced by the 2012 Notification. Paragraph 3.14.4 was added to the Foreign Trade Policy ("FTP") 2009-2014. It reads: "3. A new paragraph is added at the end of Para 3.14.4 of FTP 2009-14 as 3.14.4: 3.14.4 Incremental Exports Incentivisation Scheme Objective (a) The objective of the Scheme is to incentivize incremental exports. Entitlement (b) An IEC holder would be entitled for a duty credit scrip @ 2% on the incremental growth (achieved by the IEC holder) during the period 01.01.2013 to 31.3.2013 compared to the period from 01.01.2012 to 31.3.2012 on the FOB value of exports. Incre....
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.... (d). This sub-clause has as many as 16 sub-clauses or exclusions. Subclause (d) disentitles an exporter who had made no exports for the past period quarter in question 1st January 2012 to 31st March 2012. The export performance was not transferable and certain exports were also specifically noted as being inadmissible for entitlement. These included, for example, export from SEZs, Service Exports, Third Party Exports, exports of Meat and Meat products, exports to Singapore, UAE and Hong Kong and so on. Sub-clause (e) contained a special provision which said that the Scheme was region-specific and only covered exports to USA, Europe and Asian countries. Sub-clause (f ) said that the duty credit scrip was freely transferable and was eligible for domestic sourcing. 9. The Petitioners do not question or challenge any of these restrictions in clauses (d) and (e) of paragraph 3.14.4 introduced by the 2012 Notification as being arbitrary and unreasonable. What the Petitioners emphasize is clauses (a) and (b). According to them, clause (b) clearly states that an IEC holder is entitled to a duty credit scrip of 2% on the incremental growth achieved by it for the quarter in question, i.e.,....
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....it Petition No. 2122 of 2015, the Petitioners made an application on 3rd February 2014. Exhibit "H", pp. 66-72 to WP No. 2122/2015 In this, it showed that it had been consistently increasing its exports and, in fact, had no domestic sales. It also demonstrated an export performance percentage growth of 200% for the relevant period. We may only note here that there were certain deficiencies that were noted in this application. These related to calls for additional documents such as bills of lading, excise returns and so on; These deficiencies were in fact rectified. There is no dispute about this. 13. The Petitioners claim that all applications for export duty credit scrip exceeding Rs. 20 lakhs were rejected by the Respondents. This was on the basis of the 2013 Notification. The 2013 Notification adds two sub-paragraphs (i) and (ii) to paragraph 3.14.4(c). Paragraph 2 of this Notification reads: "2. The following sub-paragraphs (i) and (ii) are added below paragraph 3.14.4.(c) as under: (i) Benefit of Incremental Export Incentivisation Scheme for the last quarter of 2012-13 will be limited to 25% growth or Incremental growth of Rs. 10 crores in value, whichever is less. (i....
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....oners in Writ Petition No. 2122 of 2015 wrote to the Additional DGFT stating that it had made an application for entitlement of an export duty credit scrip in the amount of Rs. 8.75 crores, but had been granted only an export scrip in the amount of Rs. 20 lakhs. Exhibit "Q", pp. 87-89 to WP No. 2122/2015 The Petitioners set out their submissions in this regard and requested that the application at the rate of 2% on the entire incremental growth be considered. The Assistant DGFT replied by his letter dated 11th February 2015. Exhibit "R", p. 90 to WP No. 2122/2015 This is one of the documents impugned in Writ Petition No. 2122 of 2015. The Assistant DGFT stated that the value claimed of the IEIS scrip was limited to 25% growth in exports or incremental growth of Rs. 10 crores in value whichever is less, in terms of Notification No. 44 dated 25th September 2013 and, hence, the maximum value of the IEIS scrip that could be claimed was restricted to Rs. 20 lakhs. 17. Mr. Nankani submits that the basis of this communication is actually to be found in the 2014 Clarification dated 23rd September 2014. Exhibit "S", pp. 91-92 Paragraphs 2, 3 and 4 of this Clarification read. "2. DGFT had....
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....pported by learned Counsel for the Petitioners in the other Writ Petitions, are straightforward. They say that the 2012 Notification contained no such restriction as is now sought to be imposed. There were indeed restrictions in 2012 when the Incentive Policy was first announced. These are to be found in the Eligibility Criteria, clause (d), and in the special provisions, clause (e), of the 2012 Notification. The Petitioners have no quarrel with these restrictions, such as they are. They also accept the additional condition that the only relevant period is the quarter 1st January 2013 to 31st March 2013 and that this has to be compared to the corresponding previous quarter of 1st January 2012 to 31st March 2012. Indeed, they also accept that where there is exceptionally high incremental export for the period under consideration, additional scrutiny may indeed be required. But neither the 2012 Notification nor the 2013 Notification in any way restrict or cap the total entitlement of Rs. 20 lakhs. Mr. Nankani's submission is that if such a cap was intended, then, clause (ii) of the 2013 Notification was unnecessary: "(ii) Claims in excess of this value will be subjected to greater ....
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....r an IEIS scrip of over Rs. 20 lakhs. This does not mean, in his submission, that there is no cap or limit on the total value of the IEIS scrip. 24. Relying on the Supreme Court decision in M/s New India Sugar Works v State of Uttar Pradesh & Ors., (1981) 2 SCC 293 which in turn cited with approval the earlier decision of the Supreme Court in Trimbak Damodar Raipurkar v Assaram Hiraman Patil & Ors., AIR 1966 SC 1758 : 1962 Supp (1) SCR 700 Mr. Rana submitted that there is a difference between an existing right and a vested right. Where a statute operates in future, it is not 'retrospective' because it includes within its sweep all existing rights. This, he submits, is precisely the situation here: there can be no retrospectivity, because the 2013 Notification came into effect not from some previous date, or from the date of the 2012 Notification, but only 'with immediate effect', i.e., from the date of the 2013 Notification. It would, therefore, operate as against all applications for IEIS scrips made after that. 25. This is, of course, well-settled. But Mr. Nankani's submission is slightly different: all that he says is that this kind of 'clarification' or 'amendment' is not one....
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....dly essential and the Department quite wisely has chosen the course of specifying a greater scrutiny for high value claims. There is nothing objectionable about any of this. Indeed, the Petitioners do not object to this. But this a far cry from an insistence that irrespective of the value of the incremental exports, those incentives must be restricted to a paltry Rs. 20 lakhs. There is no such restriction to be found in the 2012 Notification or in the 2013 Notification. We certainly cannot read it into 2013 Notification. To do so would be to render, as Mr. Nankani says, clause (ii) entirely redundant. If the cap was Rs. 20 lakhs, no exporter, no matter what is his incremental exports for the period in question, would ever submit an application or make a claim in excess of Rs. 20 lakhs. There would then be no question of "greater scrutiny" by the Regional Authority. That clause would be entirely meaningless. Evidently, therefore, what clause (ii) says is that while claims up to the value of Rs. 20 lakhs will require one degree of scrutiny, those in cases of more than that amount will require much greater study, examination and scrutiny. 29. We are mindful of the principles of inter....