Legal principle

The scope of a broad entry in the Handbook of Procedures conferring export incentive benefits cannot be curtailed by a clarificatory DGFT circular; restriction is permissible only by amendment of the HBP, which cannot operate retrospectively so as to take away vested or accrued rights.

Court decision

The Division Bench (C. Hari Shankar and Om Prakash Shukla, JJ.) dismissed all the appeals, without costs, expressing 'entire and complete concurrence' with the learned Single Judge. It held that woven fabrics of synthetic filament yarn falling within ITC (HS) 5407 are fully entitled to FPS benefit under S. No. 33 of Table 4 in Appendix 37D, that the respondents' exports were ipso facto entitled to the benefit, and that the DGFT Circular dated 21 October 2011 could not sustain.

Facts

The respondents, export firms led by Malik Tanning Industries, exported woven fabrics of synthetic filament yarn falling under ITC (HS) heading 5407 and claimed Duty Credit Scrips at 2% of FOB value under the Focus Product Scheme (FTP 2009-14 para 3.15.2 read with S. No. 33 of Table 4, Appendix 37D of HBP v1). The DGFT issued Circular No. 42 (RE-2010)/2009-14 dated 21 October 2011, which restricted the number of items entitled to FPS benefit by confining the entry to 'technical textiles'. The writ petitioners challenged this circular before the Delhi High Court, and a learned Single Judge struck it down by judgments dated 8 December 2014 and 9 January 2018. The DGFT/Union of India appealed against those judgments in a batch of LPAs before the Division Bench.

Key provisions

• Section 5, The Foreign Trade (Development and Regulation) Act, 1992 — Foreign Trade Policy.