Oswal Alloys Pvt Ltd Vs Union of India (Karnataka High Court)
The Karnataka High Court considered whether continued delay in deciding an exporter’s claim for Duty Credit Scrip exceeding ₹1 crore under the Incremental Export Incentivisation Scheme was justified. The petitioner had sought a Duty Credit Scrip of ₹1,43,89,742.12 for the year 2013–14. In earlier proceedings, the Court had directed the concerned authority to consider the claim within three months. However, the Regional Authority rejected the portion exceeding ₹1 crore by an order dated 30.03.2023, citing pending proceedings before the Supreme Court.
The Scheme, as amended by a DGFT Notification dated 25.09.2013, capped the benefit at ₹1 crore per IEC for 2013–14 but expressly provided that claims beyond ₹1 crore would be subject to “greater scrutiny” by the Regional Authority. During the hearing, both sides acknowledged that the Supreme Court proceedings referred to in the impugned order had been decided against the respondents and that the related review petition had been dismissed as withdrawn. It was thus undisputed that exporters could claim Duty Credit Scrip beyond ₹1 crore, subject to enhanced verification.
The parties also agreed that “greater scrutiny” would involve calling for and examining evidence of manufacture or purchase of export goods—such as excise returns, sales tax returns, and export data of suppliers—to verify export growth and entitlement. In these circumstances, the Court held that the Regional Authority was required to reconsider the claim beyond ₹1 crore after granting an opportunity to produce evidence, and that the impugned order could not be sustained. Given that the representation had been pending for over 12 years, the Court quashed the order dated 30.03.2023, restored the application, and directed expeditious reconsideration within a fixed timeline, ensuring careful examination without undue haste.
