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2022-TIOL-225-HC-MUM-CUS
Essar Shipping Ltd Vs UoI
Cus - Petitioner seeks to challenge Policy Circular No. 25 of 2007 dated 1st January, 2008 issued by the Director General of Foreign Trade – Petitioner submits that in the garb of purported clarification, the DGFT has curtailed benefits available to service providers, such as the petitioner, under the Served from India Scheme and consequently vide demand notice dated 28 th January 2010 post-facto and retrospectively directed the petitioner to pay customs duty and interest on the basis of the benefits already availed and utilized by the petitioner on account of its entitlement under the SFI Scheme, in a sum of Rs.27,40,35,827/- - Petitioner seeks relief in this regard.
Held:
++ Suppression of a material fact, undoubtedly, is a valid ground for refusing exercise of discretionary writ jurisdiction - Law seems to be well-settled that a party is disentitled to the extra-ordinary remedy of writ if material facts, which would have materially affected the merits of the reliefs claimed (either interim or final), are not disclosed in the writ petition - Once the benefit was granted under SFI Scheme and such benefit is not sought to be taken away by reason of any disqualification evident from the Application and/or the Declaration/Undertaking but in pursuance of the said Circular based whereon the demand notice and the reminder have been issued and such circular and notice/reminder are under challenge, it is too far-fetched for Counsel for Revenue to argue that the petitioner has been guilty of suppression of a material fact - issue is, thus, answered against the respondents [para 30, 32, 34]
++ Conclusion seems to be inescapable that though the DGFT by issuing the said Circular sought to clarify the terms of the SFI Scheme but such Circular was intended to be implemented to decide claims for grant of benefits under the SFI Scheme which were not finalized as on date the said Circular was issued - Had the DGFT intended to reopen claims which had already been finalized, Bench is inclined to the view that paragraph 3 of the said Circular, if not also paragraph 2 thereof, would have been differently worded to carry forward such an intention - The words "while finalizing the claims" definitely would pertain to claims which have not yet been finalized on the date the said Circular was issued and could not have been stretched to take within its coverage settled and/or closed claims. [para 47]
++ Said Circular No. 25 of 2007 dated 1st January, 2008, though it is clarificatory in nature, it does not have retrospective operation - As such, it was not open for the third respondent to issue the demand notice and the reminder to recover Rs.27,40,35,827/- from the petitioner acting on the minutes of the meeting of the Port Officers dated 25th November, 2008 - If a benefit has been erroneously extended by the respondents, they can recover such benefit only if law authorizes them to do so but not otherwise. [para 49, 50]
++ Since the said Circular does not take away the benefits that have accrued on the basis of the SFI Scheme prior to the contents thereof being clarified by the said Circular, Bench sees no reason to hold such circular to be ultra vires Articles 14 and 19(1)(g) of the Constitution of India as well as section 5 of the FTDR Act and paragraph 3.6.4 of the FTP 2004-2009. However, the demand notice dated 28th January 2010 and the reminder dated 31st May 2010 being unauthorized, are invalid in law and inoperative; hence, the same deserve to be set aside. [para 52]
++ Writ petition stands allowed. [para 57]
++ Prayer for stay of the order is considered and refused. [para 58]
- Petition allowed: BOMBAY HIGH COURT |
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