Bombardier Transportation INDIA PVT LTD vs. Directorate General Of Foreign Trade

Facts

The writ-applicant, Bombardier Transportation India Pvt Ltd, engaged in manufacturing and exporting metro coaches, sought to claim benefits under the Merchandise Exports from India Scheme (MEIS) for exports made between July 13, 2017, and July 24, 2018. Their logistics provider, Geodis, had filed shipping bills with the intention to claim MEIS benefits, but due to a technical error on the EDI system, the reward column was marked 'N' instead of 'Y' for certain shipping bills. Despite the shipping bills containing a declaration of intent to claim MEIS benefits and other supporting export documents clearly indicating this intention, the MEIS benefits were not granted. The Deputy Commissioner of Customs later amended the shipping bills to reflect 'MEIS SCHEME – YES' after scrutinizing the documents, but the benefits were still denied on the grounds that the reward column was not initially marked 'Yes' on the EDI system.

Held

The Court held that the writ-applicant should not be denied MEIS benefits solely due to a technical error in marking the reward column on the EDI system, especially when the intention to claim the benefits was clearly manifested through other documentary evidence, including the shipping bills themselves, commercial invoices, and checklists. The Court found that the omission to mark 'Yes' was inadvertent and that the subsequent amendment by the Customs authorities, after scrutinizing the documents, further supported the petitioner's claim. The Court reasoned that the physical verification of goods preceding export would have already established the identity of the goods, making further verification unnecessary for deciding the claim. The Court found no logic in limiting the condonation of such omissions to a specific period, as the intention was evident from the documentation. The Court cited several High Court decisions that had decided similar issues in favor of the exporters, noting that these decisions had not been appealed. The Court directed the respondents to grant the MEIS benefits to the writ-applicant within four weeks.

Key Issues

1. Whether the writ-applicant can be denied MEIS benefits solely due to a technical error in marking the reward column as 'N' instead of 'Y' on the EDI system, especially when their eligibility is undisputed and the intent to claim benefits is evident from other documentation and a subsequent amendment by the Customs authorities? (Question of law and fact, turning on the interpretation of the Foreign Trade Policy and the Customs Act, 1962, particularly Section 149). Petitioner's Arguments: - The petitioner argued that MEIS benefits should not be denied due to a technical error when eligibility is not disputed and the Commissioner's office has allowed amendment of the shipping bills. - They contended that shipping bills, invoices, and checklists clearly established their intent to claim MEIS benefits, and the incorrect marking was an unintended error. - The petitioner highlighted that they had been availing MEIS benefits for similar exports since 2014. - They also argued that the EDI system's lacunae should not prevent them from receiving benefits they are substantively entitled to, citing the principle that technical errors in electronic systems should not deny legitimate claims. Revenue's Arguments: - The revenue contended that since the 'Yes' box was not checked in the relevant column, verification of the export consignment was not done at the relevant time, and verification is not possible now. - They also pointed to a Circular from the DGFT limiting such claims to six months from the scheme's introduction.