Benefit Of MEIS Scheme Can't Be Availed If Not Opted In Shipping Bill At The Time Of Export: Madhya Pradesh High Court

The petitioner/assessee, a private limited company, is in the business of manufacturing automobile parts. The petitioner has sought the declaration for relaxation/condonation of the procedure lapse of non-mentioning of MEIS scheme in the shipping bills at the time of export. The petitioner sought the direction that the MEIS be awarded to the petitioner on exports of their products via Shipping Bills issued in 2017-18 and 2018-19.

The government introduced the Merchandise Export from India Scheme (MEIS) as a Foreign Trade Policy 2015-20, which has now been discontinued for export w.e.f. 1.1.2021. Under the scheme, incentives were given to Indian exporters in the form of duty credit scrips and 7% of the FOB value of realised exports made during the validity period. The process of availing the benefit was provided under the scheme itself, according to which, at the time of filing of shipping bills, if the HS Code of the exported product is in the eligible code list, then the exporter was required to mark "Yes" by clicking "Y" in the rewards column of the shipping bill.

All such "Yes"-marked shipping bills were transferred from the Customs Database to the DGFT database electronically. Once the payment for these shipments was realised, the exporter requested the concerned bank to generate and upload an electronic Bank Realisation Certificate (eBRC) on the DGFT server. After this, for every IEC (exporter), the DGFT database has details of goods exported and the consequent realisation amount. Thereafter, the exporter was required to lodge the portal where his electronic data was available to him in the DGFT online repository and tag the individual shipping bills in the online application with e-BRC, and the application was submitted. Under the provisions of the scheme, without electronic data of shipping bills being transmitted from the Customs server, such shipping bills are not present in the DGFT repository and a claim under MEIS cannot be applied by the exporter for the shipping bills.

The petitioner contended that during 2015-20 the petitioner was entitled to avail the benefit of MEIS but could not avail of such benefit as it had not declared the intention by ticking or marking "Y" (for Yes) in the shipping bills. As a result, in order to promote Indian exports, the DGFT issued a Trade Notice on 21.2.2018, requesting that exporters submit their applications in the proper format.The petitioner has also submitted the representation, followed by a reminder and the legal notice. When no response was received, the petitioner filed the petition.

The petitioner argued that the object of the scheme was to provide rewards to the exporters in order to get more and more imports into India. The petitioners could not avail the benefit of MEIS due to the clerical error of the concerned staff, and the system automatically treated the shipping bills as "N" (for "No") in the reward column.

The department has contended that the Foreign Trade Policy provides the remedy of appeal to the Grievance Redressal Committee. The petitioner has not made an application for correction of shipping bills before the appropriate officer of the Customs Authority. Therefore, as of today, the bills in the "non-MEIS" category have not been transmitted to the DGFT in order to claim the benefit. No legal right is available to the petitioners to claim by way of a writ petition under Article 226 of the Constitution of India.

The court, while dismissing the writ petition, held that the petitioners ought to have approached the Customs Department for correction of the shipping bills, and after the correction in the shipping bills, the DGFT got jurisdiction or authority to examine the matter.

However, the court stated that the petitioner is free to approach the department online and request rectification or correction of shipping bills.Thereafter, the department is directed to consider the claims of the petitioners by an appropriate committee as per law and the scheme.

Case Title: Adroit Industries (India) Ltd. Vs Union of India

Case Number: Writ Petition No. 2614 of 2021

Dated: 08.04.2022

Counsel For Petitioner: Advocate Rabi Sankar Roy Choudhury

Counsel For Respondent: Assistant Solicitor General Himanshu Joshi