| Headnote |
Export / Import — Export Import (EXIM) Policy — EXIM Policy 2002-2007 — Incentive scheme for exporters ~ Misuse of— Notifications issued amending the provisions of the EXIM policy - Some amendments made vide Notification No. 28 dated January 28, 2004 — On the same day, a Public Notice also issued in exercise of powers conferred under the provisions of Para 2.4 of the said Policy, which was followed by Notification No. 38 dated April 21, 2004 and Notification No. 40 dated April 23, 2004 — Whether the impugned Notifications were issued in public interest — Held: The scheme in question intended to concentrate on the growth of certain kinds of products treating the same as “thrust sectors” — Six sectors including Gem and jewellery were mentioned as thrust sectors — Immediately after the introduction of the scheme, there was unprecedented sharp rise in the export in Gem and Jewellery articles — It raised certain suspicion in the mind of the authorities as to whether these were genuine exports — The matter was investigated and intelligence was gathered — It was learnt that there was rampant misuse of the scheme by certain status holders — In the counter affidavit filed by the Union of India, details of the modus operandi used by these exporters were given — A note on misuse of the Scheme was also annexed with the counter affidavit — The Government, thus, demonstrated that based on the aforesaid exercise undertaken, Notification dated January 28, 2004 as well as Public Notice of the even date were issued — Notwithstanding strenuous efforts made by the writ petitioners to show that the exports by them were genuine and there was no misuse, it is clear that the purport behind the Notifications was bona fide which was actuated with the conditions of public interest in mind — Foreign Trade (Development and Regulation) Act, 1992 —- s.5. Export / import — Export Import (EXIM) Policy - EXIM Policy 2002-2007 — Notifications issued amending the provisions of the EXIM policy — Nature of — Clarificatory or amounting to amendment — Whether Notification No.28 dated January 28, 2004 vide which Notes 1 to 5 to para 3.7.2.1 were inserted in the EXIM Policy 2002-2007 was only clarificatory in nature or it amounted to amendment of the provisions of para 3.7.2.1 of the EXIM Policy — Held: On facts, the Notification dated January 28, 2004 was clarificatory in nature and its validity stands upheld — Foreign Trade (Development and Regulation) Act, 1992 — s.5. Export / Import — Export Import (EXIM) Policy — EXIM Policy 2002-2007 — Incentive scheme for exporters — Notifications issued amending the provisions of the EXIM policy — Effect of the Notifications, prospective or retrospective — Whether Notification dated April 21, 2004, read with Notification dated April 28, 2004, seeking to exclude the export performance related to class of goods covered by para 2 of the Public Notice dated April 28, 2004, by way of Notes 6 to para 3.7.2.1 of the EXIM Policy, would relate back to the date of Public Notice dated January 28, 2004 or is to be given prospective effect from the date of issuance of Notifications on April 21 and 23, 2004 — Held: A delegated or subordinate legislation can only be prospective and not retrospective, unless rule making authority has been vested with power under a statute to make rules with retrospective effect — In the present case,.s.5 of the Act does not give any such power specifically to the Central Government to make rules retrospective - No doubt, this Section confer powers upon the Central Government to ‘amend’ the policy which has been framed under the aforesaid provisions — However, that by itself would not mean that such a provision empowers the Government to do so retrospectively — On facts, if the Status Holders had achieved 25% incremental growth in exports, they acquired the right to receive the benefit under the Scheme, which could not be taken away— The question is as to whether, in the cases of the exporters in question, the exports shown by them can be treated as actual exports entitling them to avail the benefit of the Scheme — An astute and penetrative examination of the record, with reference to the results of the investigation, prompted the Central Government to issue the Notifications — The so-called targets achieved were only on paper through fraudulent means and, therefore, it cannot be said that any vested right accrued in favour of the exporters in question— The impugned decision reflected in the notifications dated April 21 and 23, 2004, did not take away any vested right of these exporters and amendments were necessitated by over-whelming public interest / considerations to prevent the misuse of the Scheme — Therefore, even when impugned Notification issued u/s.5 could not be retrospective in nature, such retrospectivity have not deprived the writ petitioners/ exporters of their right inasmuch as no right had accrued in favour of such persons under the Scheme — Supreme Court, or for that matter the High Court in exercise of its writ jurisdiction, cannot come to the aid of such petitioners/exporters who, without making actual exports, play with the provisions of the Scheme and try to take undue advantage thereof — To this extent, direction of the High Court granting these exporters benefit of the Scheme for the past period is set aside — Legislation — Delegated / Subordinate Legislation — Foreign Trade (Development and Regulation) Act, 1992 - s.5. Export / import - Export Import (EXIM) Policy —- EXIM Policy 2002-2007 ~ Incentive scheme for exporters— Powers of DGFT fo issue a Public Notice — Vide Public Notice dated January 28, 2004, the Government announced exclusion of export performance in relation to four classes of goods mentioned in para 2 thereof from computation of the entitlement under the Scheme — Whether Public Notice dated January 28, 2004, issued by the DGFT was without jurisdiction — Held: The Public Notice dated January 28, 2004 was published in the Gazette of India in accordance with the requirement of law — The question, however, is as to whether by this Public Notice, DGFT was only carrying out the EXIM Policy or this Public Notice amounted to change in the said EXIM Policy — it is crystal clear.that the Public Notice alters the provisions of EXIM Policy — It would, therefore, amount to amending the EXIM Policy, whether clarificatory or otherwise — There may be a valid justification and rationale for exciusion of four items contained therein, as pleaded by the Union — However, it had to be done in accordance with law — When the DGFT had no power in this behalf, he could not have excluded such items from the purview of EXIM Policy by means of Public Notice — The power of DGFT is only to be exercised for procedural purposes and para 3.2.6 inserted by public notice in the Handbook of Procedures goes beyond the procedural conditions — In fact, the Government itself realised the same, namely, the DGFT had no such power - It is for this reason that what was sought to be achieved by the said Public Notice, was formalised by the Central Government by issuing Notifications dated April 21 and 23, 2004 in exercise of powers conferred on the Central Government by s.5 of the Act and the same four items were excluded — Therefore, the public notice dated January 28, 2004 issued by DGFT, so far it excludes the aforesaid four items, was ultra vires ~ Foreign Trade (Development and — Regulation) Act, 1992—s.5. Export / Import — Export Import (EXIM) Policy — EXIM Policy 2004-2009 — Target Plus Scheme (TPS) — Constitutional validity of Notification No. 48/2005 dated February 20, 2006 and Notification No. 8/2006 dated June 12, 2006 by which certain amendments were made in the EXIM Policy — Held: TPS introduced in EXIM Policy 2004- 2009 on August 31, 2004, adopted some of the features of the earlier Schemes in the EXIM Policy 2002-2007 and | introduced the concept of Muiti-Entitlement Rates, thus, allowing higher entitlement rates for higher growth — If the Government realised afterwards that export of certain items should not have been given the benefit of TPS and extending the benefit to now excluded items was an ill-considered move, _ though the Central Government was free to withdraw it in respect of such items but it could do so only prospectively, but was not entitled to do so with effect from the back date, Le. April 01, 2005, by taking away the vested right that had already accrued in favour of exporters of these items — Accordingly, on facts, Notification No. 48/2005 dated February 20, 2006 and Notification No. 8/2006 dated June _ 12, 2006 cannot be applied retrospectively and they would be effective only from the dates they were issued ~ Foreign Trade (Development and Regulation) Act, 1992 — s.5. Export / Import — Export Import (EXIM) Policy — Incentive scheme — Held: It is for the Government to take the decision to grant such a privilege or not — Also such exemptions, concessions or incentives can be withdrawn any time - All these matters are in the domain of policy decisions of the Government — When there is withdrawal of a incentive and it is also shown that the same was done in public interest, the Court would not tinker with these policy decisions — administrative Law — Administrative policy — Foreign Trade Jevelopment and Regulation) Act, 1992. Administrative Law — Executive action relating to economic activities — Validity of - Held: In complex economic atters every decision is necessarily empiric and it is based n experimentation or what one may call trial and error 1ethod and therefore its validity cannot be tested on any gid prior considerations or on the application of any straight-jacket formula. |
