Procedural Error in Shipping Bills Cannot Defeat MEIS Entitlement: Karnataka HC Directs DGFT to Reconsider Petitioner’s Claim [Read Order]

In a recent case, the Karnataka High Court has granted relief to the petitioner in the claim of benefit from the Merchandise Exports from India Scheme (MEIS), holding that a procedural error in the shipping bill cannot defeat the petitioner of his entitlement. The court has given directions to the Directorate General of Foreign Trade (DGFT) and other respondents to reconsider the company’s representation and process its claim for MEIS rewards.

Konkan Speciality Polyproducts, the petitioner in the present case is a Mangalore‑based exporter who had filed an application dated 25 April 2022 seeking MEIS benefits for multiple shipping bills.

Supporting documents were submitted, which included a No Objection Certificate from Chennai Customs,the DGFT rejected the claim via an email dated 22 January 2022.

Aggrieved, the company approached the High Court, relying on authoritative precedents that distinguish between procedural lapses and substantive rights under the Foreign Trade Policy (FTP).

The Court observed that cases cited by the petitioner, like the Supreme Court in Shah Nanji Nagsi Exports Pvt. Ltd. v. Union of India (2025). had held that inadvertent errors in shipping bills, once corrected under Section 149 of the Customs Act, cannot defeat an exporter’s claim.

Similarly, the Division Bench of the Karnataka High Court in Principal Commissioner of Customs v. Suretex Prophylactics (India) Pvt. Ltd. had highlighted that exporters should not be denied MEIS rewards due to clerical errors in electronic declarations.

The Bench observed that, “It would be difficult to believe that the petitioner, even if entitled for MEIS benefit, would have chosen to give up the benefit unless it was for inadvertent error. These must also be relevant factors in assessing whether there is a bona fide and inadvertent error in making the choice.”

Justice Krishna Kumar had noted that the Supreme Court in the case of Shah Nanji Nagsi Exports Pvt. Ltd. v. Union of India (2025) had also quoted the Bombay High Court’s rulings in Portescap India Pvt. Ltd. v. Union of India (2021) and Technocraft Industries (India) Ltd. v. Union of India, which held that once shipping bills are corrected under Section 149, exporters’ entitlements must be honoured.

In the same case, Larsen & Toubro Ltd. v. Union of India, was also quoted in which the Bombay High Court went further, imposing costs on DGFT for rejecting claims despite rectified shipping bills.

Applying these principles, the Karnataka High Court directed respondents to reconsider the petitioner’s application afresh. The order compels DGFT and Customs authorities to examine the documents submitted, including shipping bills, NOC, RCMC, and bank realisation certificates, and to pass appropriate orders within six weeks.

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