Summary
The Supreme Court upheld exclusion of export-oriented units from incentives under the 2006–07 agricultural export scheme, including exports routed through a purchaser acting as merchant exporter. The 2009 circular clarified the existing exclusion rather than amending the notified policy. The Court also upheld the policy change itself, accepting the distinction between export-oriented units already enjoying special benefits and domestic tariff area units.
Issues
- Whether the 2009 circular impermissibly amended the notified policy by excluding exports routed through purchasers from export-oriented units.
- Whether withdrawal of scheme benefits from export-oriented units was invalid or discriminatory.
Provisions considered
- Section 5, Foreign Trade (Development and Regulation) Act, 1992Gazette notification is required to formulate or amend policy; a clarification removing ambiguity in the existing scheme was distinguished from amendment. (¶¶ 6, 12)
Held
- The circular did not amend the 2006–07 scheme. It clarified that an excluded export-oriented unit could not obtain indirectly, through purchasers exporting its goods, an incentive unavailable directly. The Government had also reserved the scheme’s specified public-interest power. (¶¶ 12, 13, 14)
- Differences in wording between this scheme and the contemporaneous Focus Market Scheme did not permit the purchaser to circumvent the intended exclusion of export-oriented units. (¶ 14)
- An appellant which itself was a hundred-percent export-oriented unit fell directly within the express exclusion. (¶ 16)
- The policy change was upheld: export-oriented and special-economic-zone units enjoyed distinct tax and sourcing benefits and were not situated like domestic tariff area units for the incentive in question. (¶¶ 17, 18)
Result
All four appeals dismissed: Civil Appeals 10636 and 10637 of 2010 and Civil Appeals 7233 and 7257 of 2009.