New Delhi: The Centre has moved the Supreme Court seeking to implement a Directorate General of Foreign Trade (DGFT) circular to revoke the benefit granted to telecom companies under the Served From India Scheme (SFIS).
A bench headed by Justice DK Jain adjourned the matter till November 18 after Additional Solicitor General Vivek Tanka sought some time.
The ministries of law, justice and company affairs have challenged the Bombay High Court’s judgement that quashed the
DGFT circular which allegedly took away the benefits granted to telecom companies, including Vodafone Essar, retrospectively. The circular, according to the government, was based on the minutes of a meeting of the Policy Interpretation Committee (PIC) on July 5, 2010.
According to the Centre, the directions in the circular did not amount to retrospective change in eligibility criteria, but reading the directions in correct perspective would mean that recoveries are to be effected in cases where unintended benefits have been claimed.
The high court had failed to appreciate that framing of a particular policy, its amendment and recession is a subject matter which is solely the prerogative of the executive, Tankha argued.
Prior to the circular, the scheme formulated under the Foreign Trade Policy for 2004-09 issued a duty credit scrip for the import of capital goods including spares, office and professional equipment, office furniture and consumables that are otherwise freely importable.
While the imports were required to relate to any service sector business, the scheme was no longer available to the telecom sector in respect of foreign exchange earned with effect from April 1, 2009.
Following the PIC meeting, the DGFT in July last year issued a circular mandating that all regional authorities would review the previously scantioned telecom sector SFIS cases and reopen and recomputed the entitlements.
The regional authorities were asked to verify if any excess benefit was granted.
This was contested by Vodafone in the High Court, which held that the direction in the July 15 circular that related to the implementation of the decision taken in the PIC meeting is ultra vires the Foreign Trade Policy of 2004-09.
Source : financialexpress.com