Chowgule & Company Ltd. vs Assistant Director General Of Foreign Trade - (Supreme Court) (04 Nov 2022)

To grant the benefit of an incentive is a policy decision, exporter cannot claim the incentive as a matter of right

MANU/SC/1435/2022

Customs

The exporter has preferred the present appeal feeling aggrieved and dissatisfied with the impugned judgment passed by the High Court, by which the Division Bench of the High Court has dismissed the said writ petition by holding that the appellant shall not be entitled to the benefit of additional licence on the export of processed iron ore during the period April, 1990 to March, 1991.

Under the Exim Policy, the benefit of additional licence shall be available only on actual export in the previous year and that too to eligible items only. Under the circumstances, when the appellant exported the “processed iron ore”, i.e., during the period between April, 1990 to March, 1991, the “Minerals and Iron Ore” as per Appendix 12 were in the list of ineligible items, the appellant is rightly denied the benefit of additional licence. At this stage, it is required to be noted that the appellant had never challenged the new Exim Policy 1990-93. Therefore, in the absence of any challenge to the new Exim Policy 1990-93 under which on export of “Minerals and Iron Ore”, there shall not be the benefit of additional licence, the new Exim Policy 1990-93 shall be applicable.

The Appellant is claiming the benefit of additional licence under the Exim Policy 1988-91 on the ground of promissory estoppel. However, when the new Exim Policy 1990-93 is held to be applicable under which on export of ‘Minerals and Iron Ore”, there shall not be any benefit of additional licence, the appellant cannot be permitted to claim the benefit of additional licence under the old Exim Policy, which was not in existence.

The benefit of additional licence was in the form of an incentive. The DGFT/Union is free to change the Exim Policy and consider from time to time on which items there shall be an incentive and on which items there shall not be any incentive. To grant the benefit of an incentive is a policy decision which may be varied and/or even withdrawn. No exporter can claim the incentive as a matter of right. Under the circumstances, the doctrine of promissory estoppel shall not be applicable to such a policy decision with respect to incentive, more particularly when it is well within the right of DGFT/appropriate authority/Union to come out with a new Exim Policy. Under the circumstances, the submission on behalf of the appellant that as the appellant placed the order with NKK Corporation, Japan on 7.2.1990 when the Exim Policy 1988-91 was in force and therefore the appellant shall be entitled to the benefit of additional licence by applying the doctrine of promissory estoppel cannot be accepted. The policy and the incentive scheme are very clear. Incentive in the form of an additional licence is on actual export in the previous year.

Once it is held that the appellant is not entitled to the benefit of additional licence on export of “Minerals and Iron Ore”, the matter ends there and the Appellant cannot be allowed such benefit, which otherwise the appellant is held not entitled to. The High Court has rightly confirmed the order passed by the authority denying the benefit of additional licence to the appellant. Appeal dismissed.

Tags : BENEFIT ADDITIONAL LICENCE DENIAL