The Bombay High Court has clarified that where sugar exports were permitted under Notification No. 10/2015-20 dated 24 May 2022 through specific permission/quota granted by the Directorate of Sugar, such exports could not be treated as totally restricted or prohibited exports for the purpose of denying Remission of Duties and Taxes on Export Products Scheme (RoDTEP) benefits, and denial of such benefit would be arbitrary.
The Court held that exporters who exported sugar with specific permission under the conditions prescribed by the Directorate of Sugar were entitled to rebate under the RoDTEP Scheme, and where benefits had already been withdrawn or recovered, the amounts were liable to be refunded with interest at 6% per annum, with no coercive recovery to continue.
The Division Bench comprising Justice G. S. Kulkarni and Justice Aarti Sathe observed that the respondents’ position that sugar had become a blanketly restricted item and therefore wholly ineligible for RoDTEP was not correct when the policy conditions in Notification dated 24 May 2022 were properly read. The notification itself permitted export with specific permission from the Directorate of Sugar, and therefore sugar at the relevant time could not be treated as a totally restricted or prohibited export item so as to deprive the petitioners of RoDTEP benefits.
The Bench found that once exports were specifically permitted by the competent authority under the notified quota and procedure, and the petitioners had acted upon the scheme, it would be arbitrary to deny them the benefit of RoDTEP. The Bench noted that regulation of sugar exports for domestic needs did not mean that permitted exports lost eligibility under the scheme.
The Bench further observed that the issue stood concluded in view of the Gujarat High Court decisions in Satyendra Packaging Ltd. vs. Union of India [2023-VIL-851-GUJ-CU], and emphasized the principle of uniformity in interpretation of all-India statutes. Referring to Commissioner of Income Tax, Bombay City-II vs. Jayantilal Ramanlal & Co. [(1982) 137 ITR 257], the Bench observed that when the department has accepted a judgment of another High Court on an identical issue under a central statute, it ought not to continue agitating the same issue before other High Courts, except where the earlier judgment is per incuriam.
Briefly, the batch of petitions concerned the claim of exporters of white refined/white crystal sugar bearing ITC(HS) Code 17011490 for rebate under the Remission of Duties and Taxes on Export Products Scheme (RoDTEP) Scheme for different export periods. The petitioners contended that they had been exporting sugar and availing RoDTEP benefits in terms of the Foreign Trade Policy and the customs notifications governing the manner of issuance, utilization and transfer of duty credit.
On 24 May 2022, by Notification No. 10/2015-20, the export policy for sugar was revised from “free” to “restricted”, with effect from 1 June 2022, permitting export only with specific permission from the Directorate of Sugar, Department of Food and Public Distribution, subject to the notified procedure. The Government thereafter issued export release orders and quota allocations, and the petitioners figured in the list of permitted exporters and undertook exports accordingly.
The grievance of the petitioners was that, after such exports were undertaken pursuant to specific permissions, the RoDTEP benefit was denied, or in some cases recovery was initiated, on the ground that sugar had become a “restricted” export item and was therefore ineligible under paragraph 4.55(iv) of Chapter 4 of the Foreign Trade Policy read with Notification No. 76/2021-Customs (N.T.), which treated goods restricted or prohibited for export under Schedule 2 of the Export Policy as ineligible.
Appearances:
Senior Advocate Darius Shroff, along with Advocates Abhishek Rastogi, Pooja M. Rastogi, Meenal Songire, Aarya More, Chayank Bohra, Janay Jain, Sansha Garud, Dhwani Parekh, and Rahul P. Jain, for the Petitioner
Advocates Jaymal Ostwal, Jitendra B. Mishra, Ashutosh Mishra, Rupesh Dubey, Vikas Salgia, Shehnaz V. Bharucha, Dhanesh Shah, Yogendra Mishra, Jaimala Ostwal, Ruju Thakkar, and Sangeeta Yadav, for the Respondents
