Grant Of Incentives By Government Under EXIM Policy Is Not A 'Service' Within The Meaning Of Consumer Protection Act: SC [Read Judgment]

The Supreme Court has observed that, while granting incentives to an exporter in terms of the import and export policy [EXIM], no 'service' is rendered by the Union government within the meaning of Consumer Protection Act so as to make it a 'service provider' amenable to jurisdiction of Consumer Forums.

In Secretary, Ministry of Commerce vs. M/s Vinod and Company, the bench comprising Justice Dhananjaya Y. Chandrachud and Justice MR Shah considered the issue whether a person who has made a claim under an REP licence issued in terms of the import and export policy is a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986? The National Consumer Disputes Redressal Commission had rejected the contention that the consumer fora had no jurisdiction to entertain a consumer complaint on the ground that no service is rendered by the Union government when it provides incentives under the Exim policy.

Referring to the provisions of the Consumer Protection Act, the bench said:

The objects of the policy are essentially to stimulate industrial growth by providing easy access to imported capital goods, raw materials and components, to substitute imports and promote self-reliance and to provide an impetus to exports by improving the quality of incentives. The Exim policy is an incident of the fiscal policy of the State and of its overall control over foreign trade. As an incident of its policy, the State may provide a regime of incentives. The provision of those incentives does not render the State a service provider or the person who avails of the incentives as a potential user of any service. The State, in exercise of its authority to utilise and collect revenue, puts in place diverse regulatory regimes under the law. The regime may provide for modalities for compliance, penalties for breach and incentives to achieve the purpose of the policy. The grant of these incentives does not constitute the State as a service provider.

The bench also referred to a Supreme Court judgment which, in a similar context, held that, Bihar School Examination Board is not a service provider and a student who takes an examination is not a consumer.

Setting aside the Commission's order, the bench said that there was an absence of jurisdiction in the District Forum to entertain a complaint under the Act in regard to a claim arising out of and founded on an REP licence governed by the Exim policy. 

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