Case Note & Summary
The petitioner, Ajanta Industries, a proprietorship concern engaged in manufacturing and exporting cashew kernels, sought to avail the benefit of the Merchandise Export from India Scheme (MEIS) under the foreign trade policy. Under the policy, exporters are entitled to a reward of 3% of the net export value in the form of Duty Credit Scrips, which was increased to 5% with effect from 01.11.2017. The petitioner exported cashew kernels to various countries and filed shipping bills for the same. However, the respondents, the Assistant Commissioner of Customs and the Director General of Foreign Trade, denied the enhanced 5% benefit on the ground that the shipping bills were filed prior to 01.11.2017, even though the actual exports (as evidenced by the bills of lading) took place after that date. The petitioner argued that the date of export should be the date of the bill of lading, not the date of filing of the shipping bill. The court examined the relevant provisions of the foreign trade policy, particularly paragraph 3.04 and 3.14, and noted that the entitlement under MEIS is based on exports of notified goods to notified markets, and the basis of calculation is the realized FOB value as given in the shipping bills. The court held that the date of export is the date when the goods are actually shipped, i.e., the date of the bill of lading, and not the date of filing of the shipping bill. Since the exports in question were made after 01.11.2017, the petitioner was entitled to the enhanced rate of 5%. The court allowed the writ petition and directed the respondents to grant the MEIS benefit at the rate of 5% to the petitioner for the exports made after 01.11.2017.
Headnote
A) Customs and Foreign Trade - MEIS Entitlement - Date of Export - The dispute pertains to the rate of MEIS reward applicable to exports of cashew kernels. The court held that the date of export is the date of the bill of lading, not the date of filing of the shipping bill. Therefore, exports made after 01.11.2017 are entitled to the enhanced rate of 5% even if shipping bills were filed earlier. (Paras 2-6) B) Foreign Trade Policy - Interpretation - Beneficial Construction - The court applied the principle of beneficial construction to interpret the foreign trade policy in favor of the exporter. The policy should be construed liberally to promote exports. (Para 6)
Issue of Consideration
Whether the petitioner is entitled to MEIS benefit at the rate of 5% for exports made after 01.11.2017, even though the shipping bills were filed prior to that date.
Final Decision
The court allowed the writ petition and directed the respondents to grant the MEIS benefit at the rate of 5% to the petitioner for the exports made after 01.11.2017.
Law Points
- MEIS entitlement
- date of export
- shipping bill filing date
- foreign trade policy interpretation
- beneficial construction
