Case Law Details
Gupta Hair Products (P) Ltd Vs Deputy Director General of Foreign Trade (Madras High Court)
Exporters cannot be denied the MEIS benefit due to technical error in the electronic system
The Hon’ble Madras High Court in M/s Gupta Hair Products (P) Ltd. V the Additional Director General of Foreign Trade [W.P.No.25860 of 2021 dated July 7, 2022] held that, due to technical error or lacunae in the electronic system, exporters cannot be deprived of the benefit or incentive given under the Merchandise Export from India Scheme (MEIS).
Facts:
M/s Gupta Hair Products (P) Ltd. (Petitioner) is an exporter of human hair. During the export of the goods, while submitting the shipping bills online, the Petitioner has stated “No” for whether the petitioner intends to claim rewards or not, which is a default option. However, the same has been amended subsequently by the certificate issued by the Deputy Commissioner, Office of the Principal Commissioner of Customs dated July 31, 2019, and it has been amended to “Yes”.
Further, the assessing authority (Respondents), did not allow the Petitioner’s application for MEIS benefit on the ground that in the shipping bill, they have declared “No” concerning their intention to claim the benefit under MEIS, and further, the amendment dated July 31, 2019, having been done manually and not in electronic form.
Therefore, this writ petition has been filed for a mandamus seeking direction from the Respondent to sanction the benefits under MEIS.
Issue:
Whether the petitioner can be denied MEIS benefit on account of technical error or lacunae in the electronic system?
Held:
The Hon’ble Madras High Court in W.P.No.25860 of 2021 dated July 7, 2022 held as under:
- Observed that due to technical error or lacunae in the electronic system, the Petitioner cannot be deprived of its benefit or incentive under MEIS. Further, the Petitioner cannot be deprived of its rights to avail the benefits under MEIS only on the ground that the subsequent amendment ratifying the earlier inadvertent mistake was done manually and not electronically.
- Furthermore, the Court directed the respondents to consider the Petitioner’s representation, seeking to get the benefit under MEIS for the shipping bill and pass orders in favor of the Petitioner as observed by the Court within a period of six weeks from the date of receipt of a copy of this order.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This writ petition has been filed for a mandamus seeking for a direction to the second respondent to sanction the benefits under the Merchandise Export from India Scheme (MEIS) in terms of Chapter 3 of the Foreign Trade Policy 2015-2020 within a time bound manner.
2. The petitioner is an exporter of human hair and they are entitled to the benefits of the export incentive scheme called Merchandise Export from India Scheme (MEIS). In the shipping bill, for the subject exports, where incentive sought for by the petitioner, has not been considered by the respondents, the petitioner has made a categorical stand that they intend to claim rewards under merchandise exports from India scheme (MEIS).
3. By inadvertence, in the shipping bills submitted through on-line for the subject export, the petitioner has stated “ No “ which is the default option with regard to whether the petitioner intends to claim rewards and merchandise exports from India scheme or not. However, the same has been amended subsequently by the certificate issued by the Deputy Commissioner, Office of the Principal Commissioner of Customs on 31.07.2019 and it has been amended to “Yes” .
4. The respondents have not processed the petitioner’s application for Merchandise Export from India Scheme (MEIS) on the ground that in the shipping bill, they have declared as “No” with regard to their intention to claim the benefit under Merchandise Exports from India Scheme and further, the amendment dated 31.07.2019 having been done manually and not in electronic form, the respondents have refused to consider the petitioner’s request for entitlement under Merchandise Exporters from India Scheme.
5. A counter affidavit has been filed by the respondents reiterating the contentions of the respondents as seen from the communications which have been filed along with the writ petition. The relevant portion of their contentions is found in paragraph Nos.11 and 12 of the counter affidavit, which is extracted hereunder:-
“ 11. The Hon’ble Court is requested to make the office of the Principal Commissioner of Customs, Vishakhapatnam as the respondents, since the Customs office has manually amended the Shipping bill as is evident by their certificate dated 31.07.2019, thereby changing the declaration under Scheme from “No” to “Yes”, however, Customs has not transmitted the Shipping bill to the DGFT server. It is submitted that once the electronic data of the shipping bill is received from Customs server, only then can the application of the firm would be materially present before the respondents to examine and pass suitable orders.
12. I humbly submit that in the absence of electronic data of the impugned shipping bill from Customs, the request of the petitioner for issuance of MEIS benefits cannot be processed and considered by the respondents.”
6. The issue raised in this writ petition has been considered by the following decisions:-
(a) Bombardier Transportation India Pvt Ltd vs Directorate General of Foreign Trade reported in 2021 (377) E.L.T 489 (Guj.)
b) Portescap India Pvt Ltd vs Union of India reported in 2021 (376) E.L.T.161 (Bom.)
c) Pasha International vs Commissioner of Customs, Tuticorin reported in 2019(365) E.L.T 669 (Mad.)
7. In all the aforesaid decisions, the respective High Courts have consistently held that the benefit which otherwise a person is entitled to once the substantive conditions are satisfied cannot be denied due to a technical error or lacunae in the electronic system. In the case on hand also, a clear intention was revealed in the shipping bill submitted by the petitioner they then intend to claim the benefits/incentive under Merchandise Export from India Scheme (MEIS) and further, the petitioner having got the inadvertent mistake made in the shipping bill, amended by an order dated 31.07.2019 passed by the Deputy Commissioner, Office of the Principal Commissioner of Customs, the respondents ought to have processed the petitioner’s shipping bill and ought to have granted the benefits to the petitioner under Merchandise Export from India Scheme (MEIS) .
8. The decisions referred to supra squarely applies to the facts of the instant case also as the request for the benefits/incentives under Merchandise Export from India Scheme (MEIS) has not been considered by the respondents only due to the fact that subsequent amendment dated 31.07.2019 has been done manually and not electronically.
9. This Court is of the considered view that the petitioner cannot be deprived of its rights to avail the benefits under Merchandise Export from India Scheme only on the ground that subsequent amendment ratifying the earlier inadvertent mistake was done manually and not electronically.
10. Due to technical error or lacunae in the electronic system, the petitioner cannot be deprived of its benefit/incentive under the Merchandise Export from India Scheme (MEIS).
11. Therefore, after recording the aforesaid observations, this Court directs the respondents to consider the petitioner’s representation dated 17.08.2019 seeking to get the benefit under the Merchandise Export from India Scheme (MEIS) for the subject shipping bill (No.5918049) and pass orders in the light of the above observations made by this Court within a period of six weeks from the date of receipt of a copy of this order.
With the above direction, the writ petition is disposed of. No costs.
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