UNION OF INDIA Vs. INDIAN EXPORTERS GRIEVANCE FORUM

JUDGEMENT

(1.) This intra-appeal filed by the Union of India impugns the judgment dated 05.8.2010 rendered by the learned Single Judge of this Court in Writ Petition (Civil) No.2497 of 2008 filed by the respondents herein. By means of the said decision, the writ petition of the respondents has been allowed to a limited extent holding that the duties and entitlement of the respondent society will be computed on the basis stated in the judgment and the corresponding duty credit will be given to them by the appellants within a period of 12 weeks from the date of judgment. The dispute arose on the nature of entitlement, viz., the duty credit that may be used by the exporters earned by way of export incentive under the scheme called the Target Plus Scheme (TPS). Under the aforesaid TPS which was aimed at boosting the exports, it was decided to reward those exporters who achieved quantum growth in exports as per the target mentioned in the said scheme and were described as Star Export Houses. Certain percentage of incremental growth of FOB values of the exports were fixed as duty entitlement. The scheme further provided that these duty credits could be used for import of "any inputs, used capital goods including spares, office equipment, professional equipment and office furniture provided the same is freely importable under ITC (HS) Classification of Export and Import items, for their own use and that of supporting manufacturers .." It is the nature of these imports for which duty credit may be used has become the subject matter of contention. The learned Single Judge in the impugned judgment has given the detailed background of the scheme and the amendments made from time to time. It may not be necessary to restate all those in details. However, the relevant facts which touch upon the controversy that arises in the matter is the TPS was first introduced in the Foreign Trade Policy, 2004 announced in 01.9.2004. As per the said scheme:

(2.) Import entitlement regarding growth products was also stipulated as follows:

(3.) From the aforesaid, it becomes clear that the duty credit under the TPS was available for inputs that had a broad nexus with the goods exported. To this extent, there is no quarrel.