M/S. NOLA RAM DULICHAND DAL MILLS & ANR. versus UNION OF INDIA & ORS.

Citation: [2020] 2 S.C.R. 870 · Decided: 14-02-2020 · Supreme Court of India · Bench: DEEPAK GUPTA · Disposal: Dismissed

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Judgment (excerpt)

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870
SUPREME COURT REPORTS
[2020] 2 S.C.R.
M/S. NOLA RAM DULICHAND DAL MILLS & ANR.
v.
UNION OF INDIA & ORS.
(Civil Appeal No. 10636 of 2010)
FEBRUARY 14, 2020
[DEEPAK GUPTA AND HEMANT GUPTA, JJ.]
Export-Import Policy: Foreign Trade Policy 2004-2009 –
Scheme notified for 2006-2007 provided that exports made by
export-oriented units (EOUs) shall not be taken into account for
Duty Credit Entitlement under the scheme – Circular dated
21.01.2009 was issued to clarify that for the period 1.4.2006 to
31.3.2007, exports made by EOUs are not eligible for benefits under
various schemes – Appellant was engaged in the manufacturing/
trading and selling of Guar Gum, Guar Chri and Korma and was
purchasing Guar Gum Powder from a 100% EOU – Appellant filed
writ petition before High Court challenging the circular on the
ground that it was contrary to the Foreign Trade Policy 2004-2009
– High Court dismissed writ petition – Held:  Circular dated
21.01.2009 did not modify or amend the Scheme notified for the
year 2006-07 – It only clarified that 100% EOUs who are not
entitled to seek exemption cannot avail benefit indirectly through
the purchasers from them – It is modification or amendment of the
Scheme which is required to be carried out by publication in the
official gazette but not the clarifications to remove ambiguity in the
existing Scheme – The purpose of the Scheme is that 100% EOU or
units situated in Special Economic Zone are not to be granted
incentives – The purpose and object of the Scheme notified cannot
be defeated by granting incentives to units which exports though
100% Export Oriented Units – In terms of Clause 3.8.5 of the
Scheme, the Government has reserved the right to specify from time
to time the export products which shall not be eligible for calculation
of entitlement – Therefore, Circular dated 21.01.2009 cannot be
said to be illegal in any manner – Since the appellant is a purchaser
from 100% EOUs, therefore, the medium of the appellant cannot be
used to avoid the intended purport of the policy for the year 2006-
07 – Foreign Trade (Development and Regulation) Act, 1992 – s.5.
 [2020] 2 S.C.R. 870
870
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Dismissing the appeals, the Court
HELD: 1.1 Section 5 of the Foreign Trade (Development
and Regulation) Act, 1992 empowers the Central Government
to formulate and announce by notification in the official gazette
the Foreign Trade Policy and may also, in the like manner, amend
that policy from time to time. The Circular dated 21st January,
2009 does not modify or amend the Scheme notified for the year
2006-07. It only clarifies that 100% export-oriented units which
are not entitled to seek exemption cannot avail benefit indirectly
through the purchasers from them. In terms of Clause 3.8.5 of
the Scheme, the Government has reserved the right to specify
from time to time the export products which shall not be eligible
for calculation of entitlement. Since the Government has reserved
right in public interest in terms of the Scheme notified under the
Act, therefore, the Circular dated 21st January, 2009 cannot be
said to be illegal in any manner. [Para 12][877-E-G]
1.2 There is no merit in the argument that the Scheme
excludes the benefit of exports by units in DTA in a Scheme
pertaining to FMS notified along with Yojna in April 2006 for the
reason that FMS has an explicit clause whereas the DTA was not
excluded from claiming exemption under clause 3.8.2.2 related
to Yojna. Since the appellant is a purchaser from 100% export-
oriented unit, therefore, the medium of the appellant cannot be
used to avoid the intended purport of the policy for the year 2006-
07. The export-oriented units cannot use the appellant for export
under the Scheme and to claim benefit of export when it is not
permissible for them directly. [Para 15][878-B-C]
Director General of Foreign Trade & Anr. v. Kanak
Exports & Anr. (2016) 2 SCC 226 : [2015] 15 SCR
287 – referred to.
Case Law Reference
[2015] 15 SCR 287
referred to
Para 9
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10636
of 2010.
M/S. NOLA RAM DULICHAND DAL MILLS & ANR. v.
UNION OF INDIA & ORS.
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SUPREME COURT REPORTS
[2020] 2 S.C.R.
From the Judgment and Order dated 18.10.2010 of the High Court
of  Rajasthan at Jaipur in D.B. Civil Writ Petition No. 13519 of 2009.
 With
Civil Appeal Nos. 7257 of 2009, 10637 of 2010 and 7233 of 2009.
Arijit Prasad, Sr. Adv., Vivek Sharma, Abhishek Anand, Ishaan
Saran, M. P. Devanath, Ms. Rashmi Mal

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