Chowgule & Company Limited vs Assistant Director General of Foreign Trade & Others

HELD: 1.1 The appellant is claiming the benefit of additional licence on the export of “processed iron ore” exported during the Exim Policy 1990-93. It is an admitted position that the “processed iron ore” had been exported during April, 1990 to March, 1991. Under the Exim Policy 1990-93, “Minerals and Iron Ore” are included in the list of ineligible items. As per Exim Policy 1988-1991, only the export of “unprocessed iron ore” was ineligible to get the benefit of additional licence. However, when the new Exim Policy 1990-93 came into existence, the “Minerals and Iron Ore” are in the list of ineligible items-the appellant had actually exported “processed iron ore” during the period April, 1990 to March, 1991, which was under the regime of new Exim Policy 1990- 93 and under the new Exim Policy 1990-93, the export of “Minerals and Iron Ore” are included in the list of ineligible items, the appellant has been denied the benefit of additional licence. At this stage, it is required to be noted that under the Exim Policy, the benefit of additional licence which as such was in the form of an incentive is available on actual export in the preceding year and the benefit of such export for the purpose of additional licence to the FOB value shall be available in the next year. Under the Exim Policy, the benefit of additional licence shall be available only on actual export in the previous year and that too to eligible items only. Under the circumstances, when the appellant exported the “processed iron ore”, i.e., during the period between April, 1990 to March, 1991, the “Minerals and Iron Ore” as per Appendix 12 were in the list of ineligible items, the appellant is rightly denied the benefit of additional licence. The appellant had never challenged the new Exim Policy 199093. Therefore, in the absence of any challenge to the new Exim Policy 1990-93 under which on export of “Minerals and Iron Ore”, there shall not be the benefit of additional licence, the new Exim Policy 1990-93 shall be applicable. [Para 5][701-G-H; 702-A-E]

1.2 The appellant is claiming the benefit of additional licence under the Exim Policy 1988-91 on the ground of promissory estoppel. However, when the new Exim Policy 1990-93 is held to be applicable under which on export of ‘Minerals and Iron Ore”, there shall not be any benefit of additional licence, the appellant cannot be permitted to claim the benefitof additional licence under the old Exim Policy, which was not in existence. [Para 6][702-FG]

1.3 As regards the submission on behalf of the appellant on doctrine of promissory estoppel, it is required to be noted that the benefit of additional licence was in the form of an incentive. The DEFT/Union is free to change the Exim Policy and consider from time to time on which items there shall be an incentive and on which items there shall not be any incentive. To grant the benefit of an incentive is a policy decision which may be varied and/or even withdrawn. No exporter can claim the incentive as a matter of right. Under the circumstances, the doctrine of promissory estoppel shall not be applicable to such a policy decision with respect to incentive, more particularly when it is well within the right of DGFT/appropriate authority/Union to come out with a new Exim Policy. Under the circumstances, the submission on behalf of the appellant that as the appellant placed the order with NKK Corporation, Japan on 7.2.1990 when the Exim Policy 1988-91 was in force and therefore the appellant shall be entitled to the benefit of additional licence by applying the doctrine of promissory estoppel cannot be accepted. The policy and the incentive scheme are very clear. Incentive in the form of an additional licence is on actual export in the previous year. Therefore, the relevant date shall be the date on which the export is made. [Para 7][702-G-H; 703-A-C]

1.4 As regards the submission that in case of some other similarly situated exporters, the benefit of additional licence has been granted and therefore the appellant is entitled to the benefit of additional licence on the export made between April, 1990 to March, 1991 is concerned, merely because some others are granted the benefit wrongly, the appellant cannot be permitted to pray for the similar benefits. There cannot be any negative discrimination which may perpetuate the illegality. The appellant cannot be allowed the benefit of additional licence on the ground that some others might have been granted such benefits de hors the scheme, which otherwise the appellant is not entitled to under the scheme. At this stage, it is required to be noted that in fact in the impugned judgment and order, the High Court has directed to hold an enquiry how the others were granted the benefit. However, unfortunately no further enquiry is held. It is very unfortunate that despite the High Court’s order, no further enquiry has been conducted. Be that as it may, once it is held that the appellant is not entitled to the benefit of additional licence on export of “Minerals and Iron Ore”, the matter ends there and the appellant cannot be allowed such benefit, which otherwise the appellant is held not entitled to. In view thereof, the High Court rightly confirmed the order passed by the authority denying the benefit of additional licence to the appellant. [Para 8, 9][703D-H; 704-A]

Union of India & Others v. Chowgule & Co. Ltd. and Others, (2003) 2 SCC 641 : [2003] 1 SCR 543; Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh, (1979) 2 SCC 409 : [1979] 2 SCR 641 ; Union of India and Others v. Indo-Afghan Agencies Limited, (1968) 2 SCR 366 : AIR 1968 SC 718; Union of India & Another v. V.V.F. Limited, (2020) 20 SCC 57; and State of Uttar Pradesh & Another v. Birla Corporation Limited, (2020)

20 SCC 320 – referred to.