Restricted goods exported under specific government permission remain eligible for RoDTEP scheme benefits.

In brief

The question

1. Whether the export of sugar, categorized as "restricted" but permitted via specific permissions from the DFPD, is ineligible for duty credit under the RoDTEP Scheme

The court held

The court allowed the petitions, holding that the petitioners are entitled to RoDTEP benefits for sugar exported under specific permissions

It also directed

The Respondents were directed to grant the rebate to the petitioners and, in cases where benefits were previously withdrawn/recovered, refund the amounts within four weeks along with interest at 6% p.a.

The court further restrained the Respondents from taking any coercive action for recovery in cases where benefits had already been granted

01Facts

The petitioners are exporters of "white refined sugar" under ITC(HS) Code 1701 1490

p. 2 · ¶ 4

They sought rebates under the Remission of Duties and Taxes on Export Products (RoDTEP) Scheme, which was introduced to remit duties on exported products

p. 2 · ¶ 4

Via Notification No. 10/2015-20 dated 24 May 2022, the Central Government amended the export policy for sugar from "free" to "restricted," requiring specific permission from the Directorate of Sugar, Department of Food and Public Distribution (DFPD)

p. 5 · ¶ 9

The petitioners exported sugar after obtaining the requisite specific permissions

p. 6 · ¶ 10

However, the Respondents denied RoDTEP benefits (and in some cases initiated recovery of benefits already granted), contending that "restricted" items are ineligible for the scheme under Paragraph 4.55(iv) of the Foreign Trade Policy and Notification No. 76/2021-Customs

p. 4 · ¶ 8 · p. 13 · ¶ 19

02Issues

i.1. Whether the export of sugar, categorized as "restricted" but permitted via specific permissions from the DFPD, is ineligible for duty credit under the RoDTEP Scheme

p. 4 · ¶ 8

ii.2. Whether the Revenue can take a contrary stand on the eligibility of sugar for RoDTEP benefits when the issue has attained finality through previous High Court judgments affirmed by the Supreme Court

p. 11 · ¶ 18 · p. 15 · ¶ 24

03Law Applied

The court interpreted Notification No. 10/2015-20 (Export Policy of Sugar) alongside the RoDTEP Scheme guidelines under Notification No. 19/2015-20 and Notification No. 76/2021-Customs (N.T.)

pp. 4-5

It applied the principle of judicial discipline and uniformity in the interpretation of all-India statutes, as established in Maneklal Chunilal & Sons Ltd. v. CIT and CIT v. Jayantilal Ramanlal & Co.

p. 15 · ¶ 24

These precedents mandate that for the sake of uniformity in Central Legislations/tax matters, the view taken by one High Court should be followed by another unless the previous judgment is per incuriam

p. 16 · ¶ 25

Provisions in the judgment · 4 · Linked ones open on LawLens

Customs Act,1962 Section 28 Section 51

Foreign Trade (Development and Regulation) Act, 1992 Section 3 Section 5

04Reasoning

The court reasoned that the restriction on sugar export was not absolute but regulatory, as the policy explicitly permitted exports subject to specific permissions and quotas granted by the DFPD

p. 14 · ¶ 22

Since the petitioners complied with these regulatory requirements, their exports could not be categorized as "prohibited" so as to deprive them of RoDTEP benefits

p. 14 · ¶ 22

Furthermore, the court noted that the Gujarat High Court had already decided this identical issue in Shree Renuka Sugars Ltd. and M/s Satyendra Packaging Ltd., ruling in favor of the exporters

pp. 7-8 · ¶ 12-13

The Revenue’s Special Leave Petition against those orders was dismissed by the Supreme Court, and the Department had subsequently issued internal communications admitting that the matter had attained finality

pp. 10-11 · ¶ 14-15

The court emphasized that the Department cannot agitate the same issue before different High Courts once an authoritative pronouncement exists, as doing so leads to "judicial chaos"

p. 16 · ¶ 25