Application rejected without jurisdiction by Foreign Trade Development Officer that too without grant of hearing.

PJ/Case Law/2016-17/3348

Case- M. Jaichandren, J. LEAAP INTERNATIONAL PVT. LTD. Versus ZONAL JOINT D.G.F.T., CHENNAI

Citation- 2016 (44) S.T.R. 375 (Mad.)

Brief Facts- Both these writ petitions have been filed, praying that this Court issues a writ ofcertiorarified mandamus, to quash the impugned orders, dated 29-10-2015, passed by the second respondent, in File Nos. 04/21/071/00051/AM16 and 04/21/071/00052/AM16, respectively, and to direct the respondents to approve the claims filed by the petitioner, under the “Served from India Scheme”, for the years 2013-14 and 2014-15, respectively. It has been stated that the petitioner is a Company incorporated under the Companies Act, 1956. It is engaged in the business of total logistics service provider, which includes activities related to Multi Model Transport Operator, Freight forwarding, Customs clearance, etc. The petitioner is registered with the Service Tax Department and it has been regularly remitting the service tax for the services rendered in India, which are taxable in terms of the Finance Act, 1994.The petitioner is also registered with the Service Export Promotion Council, as a service provider, under the heading “Supporting Services for Maritime Transport”, specified in Appendix 41 of the Handbook of Procedures. It has been further stated that the Ministry of Commerce, Government of India had notified the Foreign Trade Policy, 2009-14, in accordance with the powers conferred under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992. Paragraph 3.12 of the Foreign Trade Policy provides for the “Served from India Scheme”. The objective of the said scheme is to accelerate the growth in the export of services, so as to create a powerful and unique “Served from India” brand, which would be instantly recognized and respected the world over. Paragraph 3.12.2 of the Foreign Trade Policy stipulates the service providers, who are eligible to avail the benefit of the said scheme. As per Paragraph 3.12.2 of the Foreign Trade Policy, the Indian service providers of the services, listed in Appendix 41 of the Handbook of Procedures, who have foreign exchange earnings of at least Rs. 10 lakhs in the current financial year, are eligible for duty credit scrip. It has been further stated that in terms of the “Served from India Scheme”, notified under the Foreign Trade Policy, the petitioner had submitted an application, dated 12-2-2014, for the services rendered, during the period 2012-13. The said application filed by the petitioner had been rejected initially, vide letter, dated 17-4-2014, issued by the second respondent, quoting Paragraph 3.6.1(b) of the Handbook of Procedures. Paragraph 3.6.1(b) of the Handbook of Procedures states that the payment, for services received from EEFC account, is not entitled to be taken into consideration for the calculation of the entitlement under “Served from India Scheme”. While so, the petitioner had submitted a representation to the Directorate General of Foreign Trade (DGFT), New Delhi. The office of the DGFT, New Delhi, vide letter dated 31-3-2015, had advised the petitioner to bring the documents, submitted before it, to the notice of the second respondent, for reconsideration. Accordingly, the petitioner had made a representation to the respondents, on 13-4-2015, along with the certificates, dated 30-1-2014 and 27-1-2014, issued by the HSBC Bank and Andhra Bank, respectively, stating that the remittances received were not from EEFC accounts, and the copies of certifications of foreign inward remittances. It has been further stated that the petitioner had received a letter, dated 12-8-2015, from the second respondent, asking the petitioner to clarify as to whether it had received the foreign exchange, for the services exclusively rendered by it. The petitioner had also been informed that the objection, regarding the remittances credited in EEFC accounts, were not settled by the audit, in a similar case, pertaining to some other service provider.

Appellant’s Contention- The learned Counsel appearing on behalf of the petitioner has submitted that the second respondent had rejected the applications of the petitioner, dated 13-10-2015, by a cryptic order, without giving proper reasons, for rejecting the claim of the petitioner. He had further stated that no opportunity of hearing had been given to the petitioner before the impugned orders had been passed by the second respondent. It has been stated that the first respondent is the competent authority to consider the application submitted by the petitioner. Therefore, it has been prayed that this Court may be pleased to set aside the impugned orders of the second respondent, dated 29-10-2015, and to direct the first respondent to pass a reasoned order, considering the applications of the petitioner, dated 13-10-2015, for the years 2013-14 and 2014-15, after giving an opportunity of hearing to the petitioner.

Respondent’s Contention-The learned Counsel appearing on behalf of the respondents had no objection for this Court passing such an order.

Reasoning of Judgement- Court found it appropriate to set aside the impugned orders of the second respondent, dated 29-10-2015, and to direct the first respondent to consider the applications of the petitioner, dated 13-10-2015, for the grant of benefits, under the “Served from India Scheme”, as claimed by the petitioner, for the years 2013-14 and 2014-15, and pass reasoned orders thereon, after giving an opportunity of hearing to the petitioner, within a period of eight weeks from the date of receipt of a copy of this order. The petitioner shall furnish a copy of the applications, dated 13-10-2015, to the first respondent, along with a copy of this order.

Decision- Appeal allowed.

Comment – The gist of the case is that the claim for benefit of the schemes can’t be denied without citing proper reasons and providing an opportunity of hearing to the appellant. And therefore the appellant was directed to file the copy of the application along with the copy of the order to the authorities.

Prepared by- Alakh Bhandari

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PJ/Case Law/2016-17/3348

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