2026-VIL-935-GUJ-CU
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CUSTOMS High Court Cases

Customs/DGFT - Retrospective withdrawal of Service Exports from India Scheme benefits - Vested rights and retrospective amendments - Petitioner engaged in providing maritime support services including towing covered under Foreign Trade Policy derived benefits under Service Exports from India Scheme under Public Notice 3/2015-20 - Petitioner made exports and earned foreign exchange during financial year 2019-20 believing scheme would continue - By Notification dated 31.03.2020 FTP 2015-20 was extended till 31.03.2021 with service categories and reward rates for FY 2019-20 to be notified in Appendix 3X - By Notification dated 23.09.2021 issued after one and half years Appendix 3X was notified with reduced rates and denial of benefits under Appendix 3E for FY 2019-20 - Whether impugned Notifications dated 31.03.2020 and 23.09.2021 can be given retrospective effect to deny or withdraw SEIS benefits already accrued for financial year 2019-20 when services were rendered and foreign exchange earned prior to notifications - HELD - Although Government has power to withdraw scheme under Section 5 of Foreign Trade Development and Regulation Act question is whether same could have been done retrospectively – The Section 5 of Act does not empower Government to make amendments with retrospective effect thereby taking away rights already accrued in favour of exporters under scheme. Once scheme remained in operation and was amended from time to time giving rise to claims of beneficiary vested rights cannot be taken away retrospectively - Where vested right has accrued in favour of beneficiaries who achieved target stipulated in scheme and thereby became eligible for grant of duty credit entitlement that cannot be snatched from such persons by making amendment retrospectively – Where all exports were made during FY 2019-20 and foreign exchange was earned during same period beneficiary has vested right to claim accrued benefits under scheme as it existed at time of export. Petitioner prevented from filing applications for SEIS benefits for FY 2019-20 because department applied Notification dated 23.09.2021 retrospectively. Insertion of Para 3.08 and 3.08(c) in Appendix 3E resulted in retrospective denial of accrued SEIS benefits for services rendered during FY 2019-2020 - The impugned Notifications dated 23.09.2021 and 31.03.2020 shall become effective from date they were issued and their retrospective effect is quashed. Respondents directed to process applications filed for SEIS benefits and pay all benefits accruing till issuance of impugned notifications – The petition is allowed
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