Impugned Communication on Excess SEIS Duty Credit Only Preliminary Letter: Madras HC Disposes Writ Petition [Read Order]
It was explained that the letter was intended to enable the petitioner to submit its reply, and only thereafter would the authorities decide whether to issue a formal show cause notice under the relevant provisions of law.
The Madras High Court, in a recent ruling, has clarified that a communication issued by the Directorate General of Foreign Trade (DGFT) alleging excess Service Exports from India Scheme (SEIS) duty credit availed by the petitioner was only a preliminary letter and not a formal show-cause notice.
The petitioner, CorroHealth Infotech Private Limited, contended that the impugned communication constituted a show-cause notice, alleging that the company had availed itself of excess duty credit under the Service Exports from India Scheme (SEIS) for the years 2015 to 2020.
The petitioner argued that its services were duly classified under Sl.No.I(A)(b) of Appendix 3D of the Foreign Trade Policy, which covered accounting, auditing, and bookkeeping services under CPC Code 862. On this basis, the company had claimed SEIS benefits calculated at 5% or 7% of net foreign exchange earned. The grievance raised before the Court was that the impugned order did not disclose the statutory provision under which it was issued, thereby rendering it invalid.
Appearing for the respondent, the Senior Panel Counsel submitted that the communication in question was not a show cause notice but merely a preliminary letter. It was explained that the letter was intended to enable the petitioner to submit its reply, and only thereafter would the authorities decide whether to issue a formal show cause notice under the relevant provisions of law.
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The bench of Justice M. Dhandapani accepted this submission and held that the writ petition was premature. Accordingly, the Court directed CorroHealth Infotech to file its reply within two weeks from receipt of the order. If such a reply is filed and the respondent is satisfied with the same, the respondent is directed to either close the letter or re-open the case by issuing a show cause notice, mentioning the relevant provision of law and proceed with the adjudication in the manner known to law. The writ petition was thus disposed of without costs, and the connected miscellaneous petition was closed.
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