The Hindu Business Line : ‘Duty credit against exports under passbook scheme valid till Dec 99’

Chennai, Nov. 6 The policy of duty credits to exporters announced by the Directorate General of Foreign Trade, in March 1995, shall hold good till December 31, 1999, as stipulated by Government, the Madras High Court has ruled.

A Division Bench directed the Directorate to allow writ petitioner (Chennai-based IOCEE Exports Ltd) utilise duty credits endorsed in its pass book and have the set-off against the firm’s imports.

Allowing a writ appeal challenging the order of the single judge dismissing the petition at the admission stage on the view that the appellant did not utilise credit entries available before December 31, 1999, the Bench, comprising Mr Justice K. Raviraja Pandian and Mrs Justice Chitra Venkataraman, held that in the face of the circular of July 2, 1999 by the Commerce Ministry, the Bench could not find any logic in the letter dated July 6, 2000 sent to the firm rejecting their request to refund total amount of duty credit of Rs 14,58,103.

Request rejected

According to the appellant’s counsel, Mr M. Arvind Subramanian, on March 27, 1996, they urged the Designated Authority for Passbook Scheme to make necessary credit endorsement in the passbook. The appellant had to their account, accumulated credit of Rs 14,58,103 against the value of exported goods of Rs 15,66,89,068. Under the communication dated July 6, 2000, the Deputy Director General of Foreign Trade rejected the request stating that as per the policy circular dated February 17, 1999, extension beyond June 30, 1999 would not be allowed, and unutilised passbook credits would lapse.

The appellant contended that as per the amended policy circular dated July 2, 1999, permission was granted to use passbook credits up to December 31, 1999. Aggrieved by the order of single judge dismissing their petition, appellant preferred writ appeal.

The appellant submitted that when the passbook itself was returned only on November 10, 1999, authorities concerned ought to have looked into issues such as granting further time.

The Bench said that the policy was extended till December 31, 1999 to benefit exporters. Hence, the order passed on July 6, 2000 was totally unsustainable. Delay on part of the respondent (Director General of Foreign Trade) in making entries and delivering the passbook certainly entitled the appellant to have the set-off of credit entries against imports.

Consequently, the third respondent (Director General of Foreign Trade), was directed to allow the petitioner to utilise duty credits endorsed in the petitioner’s passbook.

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