Jeena & Company Vs Union of India (Madras High Court)
Summary: The Madras High Court ruled that the Customs Department lacks jurisdiction to issue a show cause notice regarding the misclassification of SEIS (Service Exports from India Scheme) scrips without prior cancellation by the Director General of Foreign Trade (DGFT). The petitioner, Jeena & Company, challenged a 2020 notice from Customs under Section 28AAA of the Customs Act, alleging misrepresentation in obtaining SEIS benefits. The DGFT had previously issued multiple show cause notices but withdrew them entirely in 2021. The petitioner argued that Customs could only recover duties after DGFT formally canceled the scrips, as per Circular No.334/1/2012-TRU. The court agreed, citing Supreme Court precedents, and held that DGFT retains exclusive authority over SEIS scrip eligibility and cancellation. Since DGFT had not canceled the petitioner’s license, the Customs action was deemed without jurisdiction. Consequently, the court set aside the show cause notice and ruled in favor of the petitioner.
Facts of the Case
1. The Director General of Foreign Trade (DGFT) issued the petitioner a Service Exports from India Scheme (SEIS) license under Section 9 of the Foreign Trade Development and Regulation (FTDR) Act, 1992.
2. The SEIS scrips could be used for payment of import duty or sold to third parties for the same purpose.
