Case: Ram Ratna International Vs. The Union of India Through The Secretary, Ministry of Commerce and Industry and Others

office had reported that there are dues pertaining to non-submission of BRC. It is in the above context that the Zonal Committee agreed to grant conditional approval to the claim of Rs.4,22,16,175.00 of the Petitioner subject to clearance of the customs department 23. From the above, it is evident that Petitioner has submitted the no dues certificate as prescribed. The quantum of claim of the Petitioner to the extent of Rs.4,22,16,175.00 is also admitted by the Zonal Committee, Mumbai. However, according to the customs representative dues relating to non-submission of BRC are pending. 24. On a query by the Court, it was explained by learned counsel for the parties that BRC stands for Bank Realization Certificate. It is submitted that such a certificate is issued by the concerned bank after receipt of foreign remittance in connection with the export. 25. At this stage, we may advert to Trade Notice No.06 of 2018 dated 08.05.2017 issued by the Joint Director General of Foreign Trade. Clause VIII thereof reads thus :- VIII. Pending dues to Government: In order to ensure that existing government dues, if any, are recovered from the eligible entities for which claims are now being settled based on the judgment of the Honble Supreme Court, a certificate from these entities must be taken that no dues are pending to government / departments including DGFT. If any due is there, then it must be paid before release of the claim under TPS. In case of large claims, this certificate may be sent to the concerned Departments / Ministries for time-bound comments. In case of DGFT, any dues towards recoveries on account of any of DGFTs Schemes including DFCE shall have to be adjusted first before issue of TPS scrips For the purpose of submitting the certificate under this sub-paragraph, if the firm is a Limited Company, the Certificate shall be signed by the Managing Director or two Directors of the Company, along with the seal of the Company. Alternatively the Certificate shall be signed by a senior executive of the Company of the rank of General Manager and one of the Directors of the Company who have been authorized by the board of Directors for this purpose, along with the seal of the Company. In such cases, Certificate shall be countersigned by the Company Secretary. In case of a Partnership / Proprietorship firm, the Certificate shall be signed by all the Partners / Proprietor respectively. In all cases, the certificate shall be countersigned by the statutory auditor of the company / firm. 26. From the above, it is evident that what is required to be submitted is a certificate certifying that no dues are pending against the government including its departments. In the two orders dated 26.11.2019 and 04.02.2020 passed in the case of Reliance Industries Ltd. (supra), Supreme Court has clarified that clause VIII of the Notification and Trade Notice dated 08.05.2017 refers to pending dues to government only and that government dues means dues which are payable and still subsisting. 27. Without entering into details, we can safely say that the word dues means something which is payable. Shorn of semantics, the word dues means something which a person has an obligation to pay e.g., a debt or a tax; something which is enforceable. Juxtaposing the word dues with the word government, the expression government dues would mean something which is payable to and enforceable by the government on account of a legal obligation or a contract. Therefore, the amount due has to be first quantified by following the due process and as explained by the Supreme Court in the context of the scheme it should be payable to the government and subsisting i.e., not paid. 28. Reverting back to the minutes of the meeting held on 25.09.2020, it is seen that no amount of dues stated to be pending against the government has been mentioned. There is no reference to any demand or demand notice or quantification of any government dues. Alleged nonsubmission of Bank Realization Certificate after receipt of foreign currency/ remittance on successful completion of an export cannot be construed to be a due, not to speak of any pending government due. 29. In any case, Respondents have already granted to the Petitioner partial benefit under the Target Plus Scheme vide licence dated 14.02.2007 i.e., scrips to the extent of 5% of the incremental export growth for the year 2005-2006. Present claim pertains to remaining 10% on the said export growth for the same period. When the Respondents had already issued the licence and had granted partial benefit to the Petitioner under the Target Plus Scheme on 14.02.2007, there cannot be any valid and justifiable reason for non-release of the balance amount of benefit which has now become due to the Petitioner. Withholding of the same is not at all justified. 30. The Target Plus Scheme is a beneficial provision with the objective to accelerate growth in exports by giving incentives to those export houses whose exports show an annual upward trend. Initially the benefits were graded i.e., 5%, 10% and 15% depending upon the percentage of incremental growth in exports. Petitioner fell within the 15% category for the year 2005-2006. Thereafter, by an amendment on 12.06.2006, the percentage of incentives was made uniform i.e., 5% which was given retrospective effect from 01.04.2005. On intervention of the Supreme Court, the retrospectivity was removed and the amendment was given effect prospectively from 12.06.2006. Petitioner was granted the 5% benefit for the year 2005-2006. After the Supreme Court intervention, Petitioner is entitled to the balance 10% benefit for the same period for which the 5% benefit was granted being within the 15% category. When one part of the benefit for a year was given, question of withholding of the remaining benefit for the same year does not arise. Exports are of the year 2005-2006. We are now in 2020. 14 years have lapsed in between. Such inordinate delay can only frustrate the very objective of the scheme.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]20. We have noticed the salient features of the Target Plus Scheme which was made effective from 01.04.2004. Petitioner had made net exports of Rs.42,21,61,757.21 in the year 2004-2005. This increased to Rs.91,45,81,389.72 in the year 2005-2006, percentage of increase being 119.34 percent. Thus in terms of the scheme, Petitioner became eligible to the benefit of 15% of duty credit entitlement. However, vide Notification No.08 of 2006 dated 12.06.2006 benefit of entitlement was curtailed to 5% with retrospective effect from 01.04.2005. When petitioner lodged claim under the scheme for duty credit entitlement, it was issued duty credit scrips to the extent of 5% of the incremental percentage of exports vide licence dated 14.02.2007 for an amount of Rs.2,11,08,087.85. Supreme Court in Kanak Exports (supra) while upholding the validity of the Notification No.08 of 2006 however held that the said notification could not be applied retrospectively; it could only be applied prospectively. In tune with the Supreme Court judgment, Respondent No.2 issued Notification No.6/ 2015-2020 dated 08.05.2017, besides issuing trade notice on the same date setting up Zonal Committees for scrutiny of claims. It was thereafter that Petitioner renewed its claim for realization of the balance/additional duty credit scrips under the scheme for the balance amount of Rs.4,22,16,175.73 (Rs.4,22,16,175.15) covering the period from 01.04.2005 to 31.03.2006 which was earlier denied on account of retrospectivity. Following a series of correspondence, Petitioner has submitted all the required documents including no dues certificate and revised no dues certificate.21. It is seen that 11th meeting of the Zonal Committee, Mumbai with regard to issue of balance claims under the Target Plus Scheme was held on 25.09.2020. Agenda item No.4(1) dealt with the claim of the Petitioner.23. From the above, it is evident that Petitioner has submitted the no dues certificate as prescribed. The quantum of claim of the Petitioner to the extent of Rs.4,22,16,175.00 is also admitted by the Zonal Committee, Mumbai. However, according to the customs representative dues relating to non-submission of BRC are pending.24. On a query by the Court, it was explained by learned counsel for the parties that BRC stands for Bank Realization Certificate. It is submitted that such a certificate is issued by the concerned bank after receipt of foreign remittance in connection with the export.26. From the above, it is evident that what is required to be submitted is a certificate certifying that no dues are pending against the government including its departments. In the two orders dated 26.11.2019 and 04.02.2020 passed in the case of Reliance Industries Ltd. (supra), Supreme Court has clarified that clause VIII of the Notification and Trade Notice dated 08.05.2017 refers to pending dues to government only and that government dues means dues which are payable and still subsisting.27. Without entering into details, we can safely say that the word dues means something which is payable. Shorn of semantics, the word dues means something which a person has an obligation to pay e.g., a debt or a tax; something which is enforceable. Juxtaposing the word dues with the word government, the expression government dues would mean something which is payable to and enforceable by the government on account of a legal obligation or a contract. Therefore, the amount due has to be first quantified by following the due process and as explained by the Supreme Court in the context of the scheme it should be payable to the government and subsisting i.e., not paid.28. Reverting back to the minutes of the meeting held on 25.09.2020, it is seen that no amount of dues stated to be pending against the government has been mentioned. There is no reference to any demand or demand notice or quantification of any government dues. Alleged nonsubmission of Bank Realization Certificate after receipt of foreign currency/ remittance on successful completion of an export cannot be construed to be a due, not to speak of any pending government due.29. In any case, Respondents have already granted to the Petitioner partial benefit under the Target Plus Scheme vide licence dated 14.02.2007 i.e., scrips to the extent of 5% of the incremental export growth for the year 2005-2006. Present claim pertains to remaining 10% on the said export growth for the same period. When the Respondents had already issued the licence and had granted partial benefit to the Petitioner under the Target Plus Scheme on 14.02.2007, there cannot be any valid and justifiable reason for non-release of the balance amount of benefit which has now become due to the Petitioner. Withholding of the same is not at all justified.30. The Target Plus Scheme is a beneficial provision with the objective to accelerate growth in exports by giving incentives to those export houses whose exports show an annual upward trend. Initially the benefits were graded i.e., 5%, 10% and 15% depending upon the percentage of incremental growth in exports. Petitioner fell within the 15% category for the year 2005-2006. Thereafter, by an amendment on 12.06.2006, the percentage of incentives was made uniform i.e., 5% which was given retrospective effect from 01.04.2005. On intervention of the Supreme Court, the retrospectivity was removed and the amendment was given effect prospectively from 12.06.2006. Petitioner was granted the 5% benefit for the year 2005-2006. After the Supreme Court intervention, Petitioner is entitled to the balance 10% benefit for the same period for which the 5% benefit was granted being within the 15% category. When one part of the benefit for a year was given, question of withholding of the remaining benefit for the same year does not arise. Exports are of the year 2005-2006. We are now in 2020. 14 years have lapsed in between. Such inordinate delay can only frustrate the very objective of the scheme.