MUMBAI, APR 10, 2019: THE petitioner-company manufactures drugs, pharmaceutical and fine chemicals. It also produces and exports Oxyclozanide BP (Vet) using Trichloro Salicylic Acid. During the relevant period, the HBP prescribed the standard Input-Output norms used for issuing Quality Based Advance License. The final product manufactured by the petitioner is mentioned in such norms, prescribing different norms dependent upon the nature of goods used as raw material/inputs to manufacture such final products - Besides, the items listed in the Input-Output norms would also form the basis for granting benefit under DEPB scheme.

The DGFT issued a Public Notice providing 7% credit on FOB value of final product exported under DEPB scheme. It ultimately enhanced the rate of credit to 15% of the FOB value on exported final products. The petitioners then made a representation before the Additional Director General of Foreign Trade seeking fixation of credit @ 15% of FOB value of exported goods effective from 31.03.2000 to have retrospective effect w.e.f. 01.04.1997 - However, such representation was rejected.

On hearing the matter, the High Court observed that the HBP itself prescribed, in Para 7.50 that for the present policy, no retrospective effect can be given to the DEPB rates notified w.e.f. 01.04.2000. Hence it found no fault with the view taken by the order in challenge. Thereafter, the Court held that -

"17. It may be pointed out that the issue of credit rate for DEBP scheme would fall within the realm of delegated legislation. Thus, in the absence of express provision enabling a delegate to make legislation with retrospective effect, the same is beyond the competence of the delegate..."

It was further observed that -

"18. Moreover, this fixation of these rates and the date from which such fixed rates for which DEPB scheme are to be applied, would be dependent upon numerous factors involving expertise. Moreover, this decision is in the nature of a policy decision. Therefore, as held by the the Supreme Court in Balco Employees Union Vs. Union of India, 2002-TIOL-91-SC-DISINVESTMENT-LB it is not for the Courts to interfere in matters of policy..."

With such observations, the petition was dismissed.

(See 2019-TIOL-785-HC-MUM-CUS)