EOU & SEZs not eligible for Vishesh Krishi Upaj Yojna benefit- Apex Court
IN THE SUPREME COURT OF INDIA
JUDGMENT
The Relevant Text of Judgment are as follows :-
10. It is argued that 100% export-oriented units have been specifically excluded from benefit of the Scheme when it was notified on 7th April, 2006. The appellant is purchaser from the said 100% export- oriented unit and claiming benefit of the Scheme in respect of exports made by it. It is contended that since the 100% export- oriented units are not entitled to the benefit under the Scheme, therefore, the purchasers from such export-oriented units will also not be entitled to the benefit of the Scheme. It is contended that what cannot be done directly cannot be done indirectly. Since there was ambiguity in the Scheme, the same was clarified.
11. We have heard learned counsel for the parties and find no merit in the present appeal.
12. Section 5 of the Act empowers the Central Government to formulate and announce by notification in the official gazette the Foreign Trade Policy and may also, in the like manner, amend that policy from time to time. The Circular dated 21st January, 2009 does not modify or amend the Scheme notified for the year 2006-07. It only clarifies that 100% export-oriented units which are not entitled to seek exemption cannot avail benefit indirectly through the purchasers from them. It is modification or amendment of the Scheme which is required to be carried out by publication in the official gazette but not the clarifications to remove ambiguity in the existing Scheme. In terms of Clause 3.8.5 of the Scheme, the Government has reserved the right to specify from time to time the export products which shall not be eligible for calculation of entitlement. Since the Government has reserved right in public interest in terms of the Scheme notified under the Act, therefore, the Circular dated 21st January, 2009 cannot be
said to be illegal in any manner.
13. We do not find any merit in the argument that exports made through an Export Oriented Unit would be entitled to incentives. The purpose of the Scheme is that 100% Export Oriented Units or units situated in Special Economic Zone are not to be granted incentives. The purpose and object of the Scheme notified cannot be defeated by granting incentives to units which exports though 100% Export Oriented Units.
14. We do not find any merit in the argument that exports made through an Export Oriented Unit would be entitled to incentives. The purpose of the Scheme is that 100% Export Oriented Units or units situated in Special Economic Zone are not to be granted incentives. The purpose and object of the Scheme notified cannot be defeated by granting incentives to units which exports through 100% Export Oriented Units.
15. We do not find any merit in the argument that the Scheme excludes the benefit of exports by units in DTA in a Scheme pertaining to FMS notified along with Yojna in April 2006 for the reason that FMS has an explicit clause whereas the DTA was not excluded from claiming exemption under clause 3.8.2.2 related to Yojna. Since the appellant is a purchaser from 100% export- oriented unit, therefore, the medium of the appellant cannot be used to avoid the intended purport of the policy for the year 2006-07. We find that the export-oriented units cannot use the appellant for export under the Scheme and to claim benefit of export when it is not permissible for them directly.
16. Consequently, we do not find any merit in the present appeal. The same is dismissed.
Civil Appeal No. 10637 of 2010
17. The appellant is 100% export-oriented unit. Such export-oriented unit stands specifically excluded from the Scheme in Para 3.8.2.2, therefore, we do not find any merit in the present appeal. The same is dismissed.
Civil Appeal Nos. 7233 of 2009 and 7257 of 2009
18. The appellant challenged the change in the Policy “Vishesh Krishi Upaj Yojna” wherein 100% export units were denied the benefit of exemption on the ground that the policy binds the respondents for a period of five years and that such policy is discriminatory as direct tariff areas were excluded. The High Court held as under:
“After hearing the counsel for the petitioners, we do not find any illegality in the impugned Notification dated 7.4.2006 (Annexure P-7) as by the said Notification the Government has taken a policy decision to withdraw the aforesaid benefit as the Export Oriented Units enjoy special status for tax exemptions and permission to source various requirements including the one in agricultural sector, duty free. They also enjoy income tax benefits and have been set up primarily for exports, therefore, they cannot be treated at par with DTA Units which do not enjoy all these benefits. Therefore, the benefit under the said Policy has not been extended to Special Economic Zone Units and Export Oriented Units.”
19. We do not find any error in the findings recorded. Accordingly, the appeals are dismissed.
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