Madras HC grants benefit of SHIS to Thermoplastic High-Pressure Hoses [Read Order]

The Madras High Court granted benefit of Status Holder Incentive Scrip (SHIS) in accordance with the Foreign Trade Policy (FTP) to Thermoplastic High-Pressure Hoses.

The Petitioner, M/s. Polyhose India Private Limited is an exporter of Thermoplastic High-Pressure Hoses to various countries and the same is a sector which is eligible for the benefits of availing SHIS. The Petitioner have not availed the benefit of any Export Promotion Capital Goods Scheme (EPCG)) under the FTP during the year 2011-12.

Being eligible for the incentive in the form of SHIS, the petitioner had applied for a SHIS at 1% of the FOB value of exports for the year 2011-under Chapter 3.16 of the FTP. The application was submitted before the office of the respondent who is the designated authority to grant the said licence. The Respondent rejected the SHIS application citing the reason that the Petitioner is operating as a 100% EOU.

The Counsel for the petitioner, N.V. Balaji contended that the rejection has been made without reference to any provision in the law on FTP, though the Petitioner is eligible for SHIS under the FTP. The petitioner also stated that the order by the respondent was passed without application of mind and totally in contravention of the law particularly the FTP and has been passed without giving any opportunity to the Petitioner and is violative of principles of natural justice.

The Counsel also stated that the rejection is made without considering the provisions under FTP. The FTP expressly permits 100% EOU to avails the SHIS licence and restriction is placed on the availment of such benefit by 100% EOU.

A Single Bench consisting of Justice N Sathish Kumar observed that “The Respondent cannot take advantage of the Authentication Rules to contend that amending the very policy itself is authenticated by the Central Government. As the product is not disputed and export is also not disputed, when the foreign policy clearly covers the Plastics, the Petitioner is certainly entitled to incentives as per policy.”

To Read the full text of the Order CLICK HERE

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