Court says genuine exporters cannot be denied incentive due to inadvertent “N” entry in EDI system; orders amendment to “Y” and transmission to DGFT within fixed timeline.
The Calcutta High Court has ruled that a genuine exporter cannot be deprived of Merchandise Exports from India Scheme (MEIS) benefits merely because the “Reward” column in 17 EDI shipping bills was mistakenly marked “N” instead of “Y”.
Justice Smita Das De passed the order in a writ petition filed by S/s Sharma Export, which had sought correction of the shipping bills so that it could claim export incentive benefits under the Foreign Trade Policy, 2015-2020.
The petitioner told the court that the error was purely inadvertent and that it had already applied for amendment. It was also argued that the Policy Relaxation Committee had indicated that conversion from “N” to “Y” and reflection of the change in the automated system was not possible, making any further approach futile. The petitioner relied heavily on the Supreme Court’s recent ruling in M/s Shah Nanji Nagsi Exports Pvt. Ltd. v. Union of India, which held that procedural mistakes should not defeat substantive rights under a beneficial export scheme.
The Customs authorities informed the court that the shipping bills had already been manually amended from “N” to “Y” after the petitioner’s request. However, the DGFT authorities opposed relief, contending that the shipping bills had not been uploaded and transmitted to its portal, and that MEIS processing is entirely online. They also argued that the petitioner should have approached the Policy Relaxation Committee instead of filing the writ petition, and that the Customs public notice dated 11 April 2023 had no binding effect.
After hearing all sides, the High Court held that a prima facie case was made out in favour of the petitioner. The court noted that the issue was inter-ministerial between Customs and DGFT and that administrative technology must aid, not obstruct, the implementation of law. Relying on the Supreme Court’s decision in Shah Nanji Nagsi Exports and the Customs Public Notice No. 30/2023 dated 11 April 2023, the court directed that the amendments be carried out in terms of clauses 5 to 7 of the public notice.
The court ordered the Customs and DGFT authorities to allow amendment of the shipping bills by substituting “N” with “Y” in the “Reward” column within four weeks from communication of the order. It further directed Customs to transmit the corrected shipping bills to DGFT within four weeks thereafter. The entire exercise is to be completed by 31 December 2026.
The court also directed that since manual amendments had already been made, the same corrections must be reflected in the EDI mode as well.
Bottom Line :
Foreign Trade Policy/MEIS - Genuine exporter cannot be denied MEIS benefit merely because in EDI shipping bills the "Reward" column was inadvertently marked "N" instead of "Y" - Where Customs had already manually amended shipping bills and issue was inter-ministerial between Customs and DGFT, Court directed amendment in EDI system and transmission to DGFT in terms of Public Notice dated 11.04.2023 - Administrative technology must aid and not obstruct implementation of law.
Statutory provision(s): Article 226 of the Constitution of India, 1950, Section 149 of the Customs Act, 1962, Foreign Trade Policy, 2015-2020 (Chapter 3 – Merchandise Exports from India Scheme/MEIS)
S/s Sharma Export v. Union of India, (Calcutta) : Law Finder Doc id # 2983993
