LexDIRECTOR GENERAL OF FOREIGN TRADE AND ANR. versus M/S. KANAK EXPORTS AND ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2015] 15 S.C.R. 287
DIRECTOR GENERAL OF FOREIGN TRADEANDANR.
A
v.
M/S. KANAKEXPORTSANDANR.
(Civil Appeal No. 554 of 2006)
OCTOBER 27, 2015
[A. K. SIKRI AND ROHINTON FALi NARIMAN, JJ.]
B
Export I Import - Export Import (EXIM) Policy- EXIM
Policy 2002-2007 - Incentive scheme for exporters- Misuse C
of- Notifications issued amending the provisions of the EXIM
policy - Some amendments made vide Notification No. 28
dated January ~8, 2004 - On the same day, a Public Notice
also issued in exercise of powers conferred under the
provisions of Para 2. 4 of the said Policy, which was followed D
by Notification No. 38 dated April 21, 2004 and Notification
No. 40 dated April 23, 2004 -
Whether the impugned
Notifications were issued in public interest -
Held: The
scheme in question intended to concentrate on the growth of
certain kinds of products treating the same as "thrust sectors" E
- Six sectors including Gem and jewellery were mentioned
as thrust sectors - Immediately after the introduction of the
scheme, there was unprecedented sharp rise in the export in
Gem and Jewellery articles - It raised certain suspicion in
the mind of the authorities as to whether these were genuine F
exports - The matter was investigated and intelligence was
gathered- It was learnt that there was rampant misuse of the
scheme by certain status holders - In the counter affidavit
filed by the Union of India, details of the modus operandi
used by these exporters were given - A note on misuse of G
the Scheme was also annexed with the counter affidavit -
The Government, thus, demonstrated that based on the
aforesaid exercise undertaken, Notification dated January
28, 2004 as well as Public Noti<;e of the even date were issued
H
287
288
SUPREME COURT REPORTS
[2015] 15 S.C.R.
A - Notwithstanding strenuous efforts made by the writ
petitioners to show that the exports by them were genuine
and there was no misuse, it is clear that the purport behind
the Notifications was bona fide which was actuated with the
conditions of public interest in mind -
Foreign Trade
B (Development and Regulation) Act, 1992 - s. 5.
Export I Import - Export Import (EXIM) Policy- EXIM
Policy 2002-2007 - Notifications issued amending the
provisions of the EXIM policy - Nature of - Clarificatory or
c amounting to amendment - Whether Notification No. 28
dated January 28, 2004 vide which Notes 1 to 5 to para 3. 7. 2. 1
were inserted in the EXIM Policy 2002-2007 was only
c/arificatory in nature or it amounted to a•mendment of the
provisions of para 3. 7. 2. 1 of the EX/M Policy- Held: On facts,
D the Notification dated January 28, 2004 was clarificatory in
nature and its validity stands upheld - Foreign Trade
(Development and Regulation) Act, 1992- s.5.
E
Export I Import - Export Import (EXIM) Policy- EXIM
Policy 2002-2007 - Incentive scheme for exporters -
f.{otifications issued amending the provisions of the EXIM
policy -
Effect of the Notifications, prospective or
retrospective - Whether Notification dated April 21, 2004,
read with Notification dated April 28, 2004, seeking to exclude
F the export performance related to class of goods covered by
para 2 of the Public Notice dated April 28, 2004, by way of
Notes 6 to para 3. 7.2. 1 of the EXIM Policy, would relate back
to the date of Public Notice dated January 28, 2004 or is to
be given prospective effect from the date of issuance of
G Notifications on April 21and23, 2004- Held: A delegated or
subordinate legislation can only be prospective and not
retrospective, unless rule making authority has been vested
with power under a statute to make rules with retrospective
effect- In the present case,.s. 5 of the Act does not give any
H
DIRECTOR GENERAL OF FOREIGN TRADEANDANR. v.
289
MIS. KANAK EXPORTSANDANR.
such power specifically to the Central Government to make A
rules retrospective - No doubt, this Section confer powers
upon the Central Government to 'amend' the policy which
has been framed under the aforesaid provisions- However,
that by itself would not mean that such a provision empowers
the Government to do so retrospectively - On facts, if the B
Status Holders had achieved 25% incremental growth in
exports, they acquired the right to receive the benefit under
the Scheme, which could not be taken away- The question
is as to whether, in the cases of the exporters in question, the
exports shown by them can be treated as actual exports C
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