LPA 335/2015 & other connected matters Page 1 of 21

$~19 to 24

* IN THE HIGH COURT OF DELHI AT NEW DELHI

+ LPA 335/2015, CM APPLs. 10003/2015 & 10006/2015

UNION OF INDIA .....Appellant

Through: Mr. Piyush Beriwal, Ms

Ruchita Srivastava, Ms Neha and Mr Dev

Aaseri, Advs.

versus

M/S MALIK TANNING INDUSTRIES .....Respondent

Through: Mr. Naveen Malhotra, Mr.

Ritvik Malhotra and Mr. Nilansh Malhotra,

Advs.

+ LPA 652/2018

DIRECTORATE GENERAL OF FOREIGN TRADE

…….Appellant

Through: Mr. Ripudaman Bharadwaj

CGSC, with Mr. Amit Kumar Rana and Ms.

Ananya Yadav, Advs.

versus

M/S HIGH VALUE EXIM PVT LTD .....Respondent

Through: Dr. G.K. Sarkar, Ms. Malabika

Sarkar and Mr. Prashant Srivastav, Advs.

+ LPA 657/2018

DIRECTORATE GENERAL OF

FOREIGN TRADE .....Appellant

Through: Mr. Ripudaman Bharadwaj,

CGSC with Mr. Amit Kumar Rana and Mr.

Kushagra Kumar, Advs.

versus

M/S WELLDONE EXIM PVT LTD .....Respondent

LPA 335/2015 & other connected matters Page 2 of 21

Through: Dr. G.K. Sarkar, Ms. Malabika

Sarkar and Mr. Prashant Srivastav, Advs.

+ LPA 659/2018

DIRECTORATE GENERAL OF

FOREIGN TRADE .....Appellant

Through: Ms. Arti Bansal, CGSC with

Ms. Shruti Goel, Adv.

versus

M/S RBD INTERNATIONAL .....Respondent

Through: Dr. G.K. Sarkar, Ms. Malabika

Sarkar and Mr. Prashant Srivastav, Advs.

+ LPA 660/2018

DIRECTORATE GENERAL OF

FOREIGN TRADE .....Appellant

Through: Mr. Ripudaman Bharadwaj,

CGSC with Mr. Amit Kumar Rana and Mr.

Kushagra Kumar, Advs.

versus

M/S GOOD ONE TRADERS PVT LTD .....Respondent

Through:

+ LPA 661/2018

DIRECTORATE GENERAL OF

FOREIGN TRADE .Appellant

Through: Mr. Ripudaman Bharadwaj,

CGSC with Mr. Amit Kumar Rana and Mr.

Kushagra Kumar, Advs.

versus

M/S ATTIRE DESIGNERS PVT LTD .....Respondent

Through: Dr. G.K. Sarkar, Ms. Malabika

Sarkar and Mr. Prashant Srivastav, Advs.

LPA 335/2015 & other connected matters Page 3 of 21

CORAM:

HON'BLE MR. JUSTICE C. HARI SHANKAR

HON'BLE MR. JUSTICE OM PRAKASH SHUKLA

JUDGMENT (ORAL)

% 13.01.2026

C. HARI SHANKAR, J.

1. By judgment dated 8 December 2014 in WP (C) 6387/2012, a

learned Single Judge of this Court has upheld a challenge, by the

petitioner in the said writ petition Malik Tanning Industries, to

Circular No. 42 (RE-2010)/2009-14 dated 21 October 2011 issued by

the Directorate General of Foreign Trade

1

. That judgment forms

subject matter of challenge, at the instance of the DGFT, before us, in

LPA 335/2015.

2. By a subsequent judgment dated 9 January 2018, the learned

Single Judge sustained the challenge against the aforesaid DGFT

Circular dated 21 October 2011, instituted by five other writ

petitioners in WP (C) 222/2017

2

, WP (C) 250/2017

3

, WP (C)

257/2017

4

, WP (C) 251/2017

5

and WP (C) 259/2017

6

, following his

earlier judgment dated 8 December 2014. This subsequent judgment

dated 9 January 2018 forms subject of challenge, at the instance of the

DGFT, in LPA 652/2018, LPA 657/2018, LPA 659/2018, LPA

1

“DGFT”, hereinafter

2

Good One Traders Pvt. Ltd. v. Directorate General of Foreign Trade

3

BRD International v. Directorate General of Foreign Trade

4

High Value Exim Pvt. Ltd. v. Directorate General of Foreign Trade

5

Attire Designers Pvt. Ltd. v. Directorate General of Foreign Trade

6

Welldone Exim Pvt. Ltd. v. Directorate General of Foreign Trade

LPA 335/2015 & other connected matters Page 4 of 21

660/2018 and LPA 661/2018.

3. As such, all these LPAs involved the same issue, which is the

legality of DGFT Circular dated 21 October 2011, and as to whether

the learned Single Judge was correct in striking down the said circular.

4. We have heard Mr. Piyush Beriwal, learned Counsel for the

DGFT in these appeals, Mr. Naveen Malhotra, learned Counsel for the

respondent in LPA 335/2015 and Dr. G.K. Sarkar, learned Counsel for

the respondents in the remaining LPAs.

Facts

5. The Foreign Trade Policy

7

is issued on a five yearly basis under

Section 5

8

of the Foreign Trade (Development and Regulation) Act,

1992

9

. We are concerned, in these cases, with the FTP 2009-2014,

notified vide Notification 1(RE-2012)/2009-2014 dated 5 June 2012

issued by the Department of Commerce, Government of India.

6. Paras 2.3 and 2.4 of the FTP provided thus:

“2.3 Interpretation of Policy

(a) The decision of DGFT shall be final and binding on

all matters relating to interpretation of Policy, or provision

7

“FTP”, hereinafter

8

5. Foreign Trade Policy. – The Central Government may, from time to time, formulate and

announce, by notification in the Official Gazette, the foreign trade policy and may also, in like manner,

amend that policy:

Provided that the Central Government may direct that, in respect of the Special Economic Zones,

the foreign trade policy shall apply to the goods, services and technology with such exceptions, modifications

and adaptations, as may be specified by it by notification in the Official Gazette.

9

“FTDR Act”, hereinafter

LPA 335/2015 & other connected matters Page 5 of 21

in HBP v1

10

, HBP v2

11

or classification of any item for

import/export policy in the ITC (HS).

(b) A Policy Interpretation Committee (PIC) may be

constituted to aid and advice DGFT.”

“2.4 Procedure

DGFT may, specify procedure to be followed by an

exporter or importer or by any licensing/regional authority

or by any other authority for purposes of implementing

provisions of FT (D & R) Act, the Rules and Orders made

thereunder and FTP. Such procedures, or amendments if

any, shall be published by means of a Public Notice.”

7. The Handbook of Procedures

12

was first notified, in terms of

para 2.4 of the FTP 2009-2014, vide Public Notice 1/2009-2014 dated

27 August 2009 issued by the Department of Commerce, Government

of India. It was again notified vide Public Notice 1 (RE-2010)/2009-

2014 dated 23 August 2010 and, again, vide Public Notice 1 (RE-

2012)/2009-2014 dated 5 June 2012. Apropos the interplay between

the FTP and the HBP, the Supreme Court has clarified the legal

position thus, in Union of India v. Asian Food Industries

13

:

“30. The implementation of the said policy was to be made in

terms of the procedures laid down in the Handbook. The

provisions of the 1992 Act, the Foreign Trade Policy and the

procedures laid down thereunder, thus, provide for a composite

scheme. In implementing the said provisions of the scheme, in the

event an order of prohibition, restriction or regulation is passed, the

provisions of the 1962 Act

14

mutatis mutandis would apply.”

8. Chapter 3 of the FTP dealt with “Promotional Measures”. Para

10

Handbook of Procedures Volume 1

11

Handbook of Procedures Volume 2

12

“HBP” hereinafter

13

(2006) 13 SCC 542

14

the Customs Act, 1962

LPA 335/2015 & other connected matters Page 6 of 21

3.15, thereunder, dealt with the Focus Product Scheme

15

, which was

an Export Incentive Scheme aimed at augmenting of realisation of

foreign exchange. Para 3.15.2 thereunder read thus:

“3.15.2 Entitlement – Exports of notified products (as in

Appendix 37D of HBPv1) to all countries (including SEZ units)

shall be entitled for Duty Credit script equivalent to 2% of FOB

value of exports (in free foreign exchange) for exports made from

27.08.2009 onwards.

However Special Focus Product(s)/sector(s), covered Appendix

37D shall be granted Duty Credit equivalent to 5% of FOB value

of exports (in free foreign exchange) for exports made from

27.08.2009 onwards.”

9. Chapter 3 of the HBP deals with the FPS, and paras 3.9, 3.9.1,

3.9.2 thereof read as under:

“3.9 Policy pertaining to FPS is given in Chapter 3 of FTP.

Notified Products are listed in Appendix 37D.

3.9.1

(a) An application for exports made from 27.8.2009

onwards shall be filed, with RA concerned in ANF3C along

with documents prescribed therein.

(b) Eligibility of Focus Product (as in Appendix 37D)

shall be determined from date of export as per Para 9.12 of

HBP vl.

3.9.2 The procedure for filing applications against export of

Market Linked Focus Products under FPS (Para 3.15.3 of FTP)

will be the same as laid down for Focus Product Scheme in Para

3.9.1 above. In case of applications for grant of benefit under

Market Linked Focus Product scheme for proof of landing of

export consignment in specified market, Para 3.8.2 for HBPVol.1

shall apply.”

10. Para 3.9.1 of the HBP, therefore, provides that eligibility of

15

“FPS”, hereinafter

LPA 335/2015 & other connected matters Page 7 of 21

products, whose exports would entitle the exporter to the benefit of the

FPS, is to be determined according to Appendix 37D to the HBP. The

products which are entitled to the benefit of the FPS are set out in

Appendix 37D in tabular form, depending on various categories of

products. The products are tabulated on the basis of their entries in the

ITC (HS) Classification of products. Serial No. 33 of Table 4 in

Appendix 37D entitles “Technical Textiles – Woven Fabrics of

Synthetic Filament Yarn”, classifiable under ITC (HS) 5407, to the

benefit of the FPS.

11. Heading 5407 of the ITC (HS) covers “Woven fabrics of

synthetic filament yarn, including woven fabrics obtained from

materials of heading 5404”. All woven fabrics of synthetic filament

yarn are, therefore, encompassed in Heading 5407.

12. Reproducing, in extenso, the several sub-entries under Heading

5407 would needlessly burden this judgement. Suffice it, therefore to

note that Heading 5407 has, under it,

(i) Sub-Heading

16

540710 covering “Woven fabrics obtained

from high tenacity yarn of nylon or other polyamides or of

polyesters”, with sub-headings 54071011 to 54071099,

(ii) SH 540720 covering “Woven fabrics obtained from strip

or the like”, with further SHs 54072010 to 54072090,

(iii) SH 540730 covering “Fabrics specified in Note 9 to

Section XI” with further SHs 54073010 to 54073090,

(iv) “Other woven fabrics, containing 85% or more by weight

16

“SH” hereinafter

LPA 335/2015 & other connected matters Page 8 of 21

of filaments of nylon or other polyamides” are covered under

SHs 54074111 to 54074490,

(v) SH 540751 covers “Other woven fabrics, containing 85%

or more by weight of textured polyester filaments: Unbleached

or bleached” with further SHs 54075111 to 54075490,

(vi) SH 540761 covers “Other woven fabrics, containing 85%

or more by weight of polyester filaments: Containing 85% or

more by weight of non-textured polyester filaments” with

further SHs 54076110 to 54076900,

(vii) SH 540771 covers “Other woven fabrics, containing 85%

or more by weight of synthetic filaments: Unbleached or

bleached”, with further SHs 54077110 to 54077400,

(viii) SH 540781 covers “Other woven fabrics, containing less

than 85% by weight of synthetic filaments, mixed mainly or

solely with cotton: Unbleached or bleached” with further SHs

54078111 to 54078490 and

(ix) SH 540791 covers “Other woven fabrics” with further

SHs 54079110 to 54979400.

13. On 5 May 2010, the Joint DGFT wrote to the DGFT as under:

“File No. Jt.DG/SRT/Policy/2010-770 Date: 05.05.2010

To

Director General of

Foreign Trade,

Udyog Bhawan, Maulana Azaad Road

New Delhi 110011.

Kind Attn.:- Shri Tapan Mazumder, Jt. DG (Policy).

Sub.:- Focus Product Scheme clarification for

LPA 335/2015 & other connected matters Page 9 of 21

eligibility regarding.

Sir,

Exporters from Surat are engaged in the main business of

exporting "Dyed or Printed fabrics, made from 100% Polyester

Filament Yarn fabrics, made-ups, sarees etc. All these tems under

ITC (HS) code series 5407 appearing at different Sr. Nos. of rate

list are eligible for DEPB benefits.

Your kind attention is invited to Sr.No.33 FPS code 33

under heading Technical Textiles Products at page 297 of Hand

Book Procedures Vol.-1 (Appendices and Aayat Niryat Forms)

2009-2014 according to which the item technical textile-Woven

fabrics of synthetics filaments yarn against ITC (HS) code 5407 is

eligible for benefits under FPS. Many exporters have approached

this office contending that all the export products under ITC (HS)

code 5407 against which they have obtained DEPB under different

Sr. Nos of DEPR rate are also eligible for benefits under FPS. With

this contention majority of the exporters who Have already

obtained DEPB are queuing up for claims under FPS.

You are requested to kindly advise this office urgently as to

whether all the items appearing at different DEPB rate Sr. Nos

under ITC (HS) code 5407 series are eligible for benefits of FPS

under the heading Technical Textiles-Woven fabrics of synthetics

filament Yarn under ITC (HS) code 5407. We shall be obliged for

your immediate advice/clarification and number of firms have

applied for FPS benefits, which have, however, been kept pending

for your decision.

Yours faithfully

Sd/-

(BEG RAJ SINGH)

JT. DIRECTOR GENERAL OF FOREIGN TRADE”

14. A similar query was addressed by the Joint DGFT to the DGFT

on 22 December 2010:

“OFFICE OF THE ZONAL JT. DIRECTOR GENERAL OF

FOREIGN TRADE NEW C.G.O. BLDG. NEW MARINE LINES,

CHURCHGATE, MUMBAI – 20.

LPA 335/2015 & other connected matters Page 10 of 21

File No. 03/91/087/131/AM11/DES-XII/395

Date: 22

nd

December, 2010

To

The Director General of

Foreign Trade

Udyog Bhavan, M.A. Road

NEW DELHI-110 011.

Kind Attn: Shri A.K. Singh, JDG, Policy - 3

Sub: Request for clarification regarding

description covered Under Appendix 37D,

Table4 FP Code (33) ITC(HS) Code 5407

Sir,

This office had issued FPS (Focus Product Scheme)

Licence to M/s. Riddhi Textiles, Mumbai for the items covered

under ITC(HS) Code 5407 i.e. "Technical Textile Woven Fabrics

of Synthetic Filament Yarn".

The Asstt. Commissioner of Customs, Moradabad while

perusing the duplicate copies of the shipping bills from Customs

record; observed that the party has actually exported "Dyed/Printed

Fabrics made from 100% Polyester Filament/Texturised yarn with

or without embroidery and/or without metallised yarn" and

therefore, vide his letter no. C. No. VIII(30) Cust/

ICD/FPS/907/10/4136 dated 22/10/2010 requested this office to

inform them whether the goods exported by the party are eligible

for benefit of FPS under ITC (HS) code 5407 or not. A copy of

letter received from Customs is enclosed herewith for your perusal.

However, since ITC (HS) Code No. 54023910 shows the

specific entry of Dyed & Printed Fabrics and Appendix 37D i.e. list

of notified products under FPS do not show specific entry for

textile product & do not show itemwise classification as per

Chapter 54 of ITC (HS), this office considered the case and issued

licence as per Sr. No.33 of Technical Textile Products. This was

also confirmed by Chartered Engineer.

You are requested to kindly clarify as to whether the goods

exported by the party i.e. "Dyed/Printed Fabrics made from 100%

Polyester Filament / Texturised yarn with or without embroidery

and/or without metallised yarn" are eligible for benefit of FPS

LPA 335/2015 & other connected matters Page 11 of 21

under ITC(HS) Code 5407 or not, so that further necessary action

can be taken in the matter.

Yours faithfully

Sd/-

(U.K. SOLANKI)

JT. DIRECTOR GENERAL OF FOREIGN TRADE ”

15. In response to these queries, the DGFT issued the Policy

Circular dated 21 October 2021, which stands struck down by the

learned Single Judge in the judgment under challenge. The circular

read as under:

“Government of India

Ministry of Commerce and Industry

Department of Commerce

Directorate General of Foreign Trade

Udyog Bhawan, New Delhi – 110011

Policy Circular No. 42 (RE-2010)/2009-14

Dated: 21 October, 2011

To

All Regional Authorities

Subject:- Eligibility of export product "Technical

Textiles" listed at FPS Product Code 33,

Table-4, Appendix 37D of HBPv1 - reg.

Sr. No. 33, Table-4, Appendix 37D of HBPv1 allows FPS

benefit to products covered under ITC HS Code 5407 with

description "Technical Textiles – Woven Fabrics of Synthetic

Filament Yarn". References have been received from the Regional

Authorities seeking clarification on coverage of products classified

under ITC HS Code 5407 for FPS benefit.

2. The matter has been examined. It is decided that a technical

textile is a textile product manufactured for non-aesthetic purposes,

where function is the primary criterion. Technical textiles include

textiles for automotive applications, medical textiles, geotextiles,

agrotextiles and protective clothing like heat and radiation

LPA 335/2015 & other connected matters Page 12 of 21

protection for fire fighter clothing, molten metal protection for

welders, stab protection and bulletproof vests and spacesuits etc.

Accordingly, only 33 items as listed in the Annexure are covered

under technical textiles.

3. It has, therefore, been decided to allow FPS benefits to

export products listed in the Annexure to this Policy Circular under

category of "Technical Textiles". This list is applicable for exports

made w.e.f. 1.4.2011 and any FPS benefit granted to products other

than those listed in Annexure to this Circular for exports made

w.e.f. 1.4.2011 would need to be recovered from the exporters.

4. All RAs are advised to consider claims accordingly.

5. This issues with approval of DGFT.

Effect of this Policy Circular:

Only 33 items are eligible to get FPS benefit under heading

"Technical Textiles" as per Sr.No.33, of Table 4, Appendix 37D of

HBPv1. The list of 33 items, so eligible, is in the Annexure to this

Policy Circular and this list is applicable for export made with

effect from 01.04.2011.

(Hardeep Singh)

Joint Director General of Foreign Trade

hardeep.singh@nic.in

(Issued from F. No.01/91/180/547/AM11/PC-3)

Annexure to Policy Circular No.42 (RE-2010)/2009-14

dated 21 October, 2011.

ITC HS

Codes

Woven fabrics obtained from high tenacity yarn of

nylon or other polyamides of polysters:

Unbleached:

5407 10 11 Parachute fabric

5407 10 12 Tent fabrics

5407 10 13 Nylon furnishing fabrics

5407 10 14 Umbrella cloth panel fabrics

5407 10 15 Other nylon and polyamide fabrics (filament)

Bleached:

5407 10 21 Parachute fabric

5407 10 22 Tent fabrics

5407 10 23 Nylon furnishing fabrics

LPA 335/2015 & other connected matters Page 13 of 21

5407 10 24 Umbrella cloth panel fabrics

5407 10 25 Other nylon and polyamide fabrics of filament

yarn

Dyed:

5407 10 31 Parachute Fabrics

5407 10 32 Tent fabrics

5407 10 33 Nylon furnishing fabrics

5407 10 34 Umbrella cloth panel fabrics

5407 10 35 Other nylon and polyamide fabrics (filament)

Printed:

5407 10 41 Parachute fabric

5407 10 42 Tent fabrics

5407 10 43 Nylon furnishing fabrics

5407 10 44 Umbrella cloth panel fabrics

5407 10 45 Other nylon and polyamide fabrics (filament)

Other:

5407 10 91 Parachute fabrics

5407 10 92 Tent fabrics

5407 10 93 Nylon furnishing fabrics

5407 10 94 Umbrella cloth panel fabrics

Woven fabrics obtained from strip or the like:

5407 20 10 Unbleached

5407 20 20 Bleached

5407 20 30 Dyed

5407 20 40 Printed

5407 20 90 Other

Fabrics specified in Note 9 to Section XI:( of man-

made fabrics, impregnated, coated, covered or

laminated with plastics)

5407 30 10 Unbleached

5407 30 20 Bleached

5407 30 30 Dyed

5407 30 40 Printed

Sd/-

[Hardeep Singh]

Joint Director General of Foreign Trade”

16. The respondents in these appeals exported goods which were

described in the export documents as “polyester printed-dyed

texturized fabrics”. Mr. Beriwal, to a query from the Court

acknowledges the fact that there was no error in the description of the

LPA 335/2015 & other connected matters Page 14 of 21

exported goods as polyester printed-dyed texturized fabrics, and

further acknowledges that the fabric exported by the respondents

would fall within the description “woven fabrics of synthetics filament

yarn”.

17. Mr. Beriwal submits that the case of the DGFT is, however, that

the fabric does not qualify as “technical textiles”, as the expression

stands clarified in para 2 of the DGFT Policy Circular dated 21

October 2011. He points out that the goods exported by the respondent

do not figure in the list of 33 items in the Table annexed to the Policy

Circular dated 21 October 2011.

18. The restriction of FPS benefits to exports of 33 items which

were enlisted in the table annexed to the Policy Circular dated 21

October 2011 hurt the respondents as, the fabric exported by them

does not, admittedly, fall within the said entries. The respondents

contended that their product fell within the description of “woven

fabrics of synthetics filament yarn”, which were entitled to FPS

benefits, as per S. No. 33 of Table 4 in Appendix 37D to the HBP.

That benefit, according to the respondents, could not have been

restricted by the Policy Circular dated 21 October 2011 issued by the

DGFT.

19. Moreover, submitted the respondents, the DGFT, in any case,

did not have the power to make the circular retrospectively applicable

from 1 April 2011, thereby disentitling the exporters who, on the basis

of S. No. 33 in Table 4 in Appendix 37D to the HBP, had exported

LPA 335/2015 & other connected matters Page 15 of 21

fabrics which fell within the description of “woven fabrics of synthetic

filament yarn”, in the expectation that they would be entitled to export

incentives under the FPS.

The impugned judgment

20. The learned Single Judge has, in the impugned judgment,

upheld the challenge set up by the respondents, and has struck down

the DGFT Policy Circular dated 21 October 2011. In doing so, the

learned Single Judge has reasoned as under:

(i) The power to frame the FTP, under the FTDR Act, vested

with the Central Government. The role of the DGFT was to

specify the procedure to be followed by importers and exporters

for implementing the FTP and to clarify doubts in interpreting

any provisions of the FTP, classification of items under the ITC

(HS) Code or the HBP.

(ii) The HBP had been framed by the DGFT in exercise of

powers conferred by para 2.4 of the FTP. Para 3.15.2 of the FTP

clearly referred to export of products notified in Appendix 37D

to the HBP. The DGFT was empowered with the power to

specify and update the eligible products in Appendix 37D.

(iii) The fabric exported by the respondents clearly fell within

the omnibus description of “woven fabrics of synthetics

filament yarn”. There was also no dispute about the fact that the

LPA 335/2015 & other connected matters Page 16 of 21

fabric exported by the respondents fell within ITC (HS) Code

5407. That position, we may note, has not been disputed before

us, either, by Mr. Beriwal.

(iv) The entry at S. No. 33 in Table 4 in Appendix 37D had to

be read by understanding the reference to “woven fabrics of

synthetics filament yarn” as explaining the expression

“technical textiles”. In any event, polyester dyed fabrics were

covered under ITC (HS) Code 5407. The DGFT was

empowered by para 2.3 of the FTP only to provide clarifications

in the event of any doubt. The entry at S. No. 33 in Table 4 in

Appendix 37D to the HBP being unambiguous, no doubt

existed, as would justify any clarification by the DGFT.

(v) Further, the DGFT Policy Circular dated 21 October

2011 was, in effect, not clarificatory in nature, but restricted the

number of products which would be entitled to the benefit of

the FPS in terms of Appendix 37D to the HBP. 124 items,

which were enlisted in the ITC (HS) Code and fell within the

broad description in S. No. 33 of Table 4 in Appendix 37D were

entitled to the benefit of the FPS on their export. The Policy

Circular dated 21 October 2011 curtailed this benefit to 33

items alone. The DGFT was not empowered, in the garb of

providing a clarification, to curtail the number of products

which, as per the provision of the FTP read with the HBP, were

entitled to export incentive benefits.

LPA 335/2015 & other connected matters Page 17 of 21

(vi) This was also apparent form the fact that the Policy

Circular dated 21 October 2011 was made effective from 1

April 2011. In other words, the products exported by the

respondent, had they been exported prior to 1 April 2011,

would, in any case, be entitled to the benefit of the FPS. This

also indicated that the Policy Circular dated 21 October 2011

effectively brought about a change in the products, which would

be entitled to FPS benefits, with effect from 1 April 2011,

rendering many of them ineligible.

(vii) Sections 5 and 6

17

of the FTDR Act did not empower

even the Central Government to frame a policy with

retrospective effect. This position also stood clarified in para 48

of the judgment of the Supreme Court in Asian Food

Industries, which read thus:

“48. The Delhi High Court, however, in our view

correctly opined that the Notification dated 4-7-2006 could

not have been taken into consideration on the basis of the

purported publicity made in the proposed change in the

export policy in electronic or print media. Prohibition

promulgated by a statutory order in terms of Section 5 read

with the relevant provisions of the policy decision in the

light of sub-section (2) of Section 3 of the 1992 Act can

only have a prospective effect. By reason of a policy, a

vested or accrued right cannot be taken away. Such a right,

therefore, cannot a fortiori be taken away by an amendment

thereof.”

17

6. Appointment of Director General and his functions. –

(1) The Central Government may appoint any person to be the Director General of Foreign

Trade for the purposes of this Act.

(2) The Director General shall advise the Central Government in the formulation of

the foreign trade policy and shall be responsible for carrying out that policy.

(3) The Central Government may, by Order published in the Official Gazette, direct that any

power exercisable by it under this Act (other than the powers under Sections 3, 5, 15, 16 and 19)

may also be exercised, in such cases and subject to such conditions, by the Director General or such

other officer subordinate to the Director General, as may be specified in the Order.

LPA 335/2015 & other connected matters Page 18 of 21

(viii) Where the Central Government itself did not have the

power to amend the provisions of the FTP with retrospective

effect, no such power, needless to say, could be conceded to the

DGFT. It was only entrusted with the task of implementing the

FTP. The position that retrospective or retro-active legislation

was not permissible in the absence of any power in that regard

conferred by the Statute also stood recognized by the judgments

of the Supreme Court in Mahabir Vegetable Oil (P) Ltd. v.

State of Haryana

18

, Vice Chancellor, MD University, Rohtak

v. Jahan Singh

19

and judgment of the Division Bench of the

High Court of Bombay in Nobel Resources and Trading India

Pvt. Ltd. v. UOI

20

. In fact, Noble Resources and Trading India

Pvt. Ltd. dealt with a similar challenge to withdrawal of benefits

under the Duty Entitlement Passbook Scheme

21

retrospectively.

The High Court of Bombay held that this was not permissible.

Analysis

21. The impugned judgment of the learned Single Judge has

analyzed every aspect of the matter. We can hardly do better than to

express our entire and complete concurrence with the view expressed

by the learned Single Judge.

22. While any reiteration thereof would amount to an exercise in

18

(2006) 3 SCC 620

19

(2007) 5 SCC 77

20

2012 (276) ELT 3 (Bom)

21

“DEPB Scheme”, hereinafter

LPA 335/2015 & other connected matters Page 19 of 21

repetition, we may only note that the DGFT in the garb of a

clarification could not have restricted the number of items, which were

entitled to FPS benefit as per Appendix 37 D to the HBP v1, and that

no occasion arose for any clarification from the DGFT, as Serial No.

33 in Table 4 in Appendix 37D was clear and categorical.

23. Mr. Beriwal sought to submit that the products exported by the

respondents were not “technical textiles” and that they were not,

therefore, entitled to FPS benefit.

24. There are two reasons why we cannot accept this argument.

25. Firstly, we are in agreement with the learned Single Judge that

S. No. 33 in Table 4 in Appendix 37D to the HBP has to be read as an

entire entry and not merely as “technical textiles”. This, in fact,

appears to be the primary error into which the DGFT has fallen while

issuing the Circular dated 21 October 2011. A bare reading of the

Policy Circular makes it clear that it adverts only to the words

“technical textiles” and entirely overlooks the word “woven fabrics of

synthetics filament yarn”.

26. Even on this ground, the Policy Circular dated 21 October 2011,

inasmuch as it proceeds on a misreading of S. No. 33 in Table 4 in

Appendix 37D to the HBP, cannot sustain.

27. The second reason why we cannot accept Mr Beriwal’s

submission is that there is no definition, in the FTP, the HOP, or the

LPA 335/2015 & other connected matters Page 20 of 21

ITC (HS), of the expression “technical textiles”. The restrictive

interpretation that the Policy Circular dated 21 October 2011 accords,

to the expression “technical textiles”, would have to find place in

Appendix 37D to the HOP itself, for it to apply. The scope of a broad

entry provided in the HOP, with respect to the products covered by an

export incentive scheme, cannot be reduced by way of a clarificatory

circular.

28. Though the learned Single Judge has, in para 17, has interpreted

the dash (–) between the words “technical textiles” and “woven

fabrics of synthetics filament yarn”, we do not think it is necessary to

enter into any such syntactical exercise. It is clear to us that the use of

the words “woven fabrics of synthetics filament yarn” is deliberate. In

fact, the manner in which the DGFT Policy Circular dated 21 October

2011, as well as Mr. Beriwal before us, seeks to interpret S. No. 33 in

Table 4 in Appendix 37D to the HBP, would render the words “woven

fabrics of synthetics filament yarn” entirely redundant and would

result in re-writing the entry as reading “technical textiles” alone. This

is not an exercise that DGFT, or for that matter, even this Court can

undertake.

29. It is perfectly clear to us that “woven fabrics of synthetics

filament yarn” which fall within ITC (HS) Classification 5407 are

fully entitled to the benefit of the FPS in terms of S. No. 33 in Table 4

in Appendix 37D to the HBP.

30. There is no dispute about the fact that the fabrics exported by

LPA 335/2015 & other connected matters Page 21 of 21

the respondents fell within the broad description “woven fabrics of

synthetics filament yarn”. To our mind, the matter should have ended

there, and this has been an entirely unnecessary exercise. Once the

respondents’ export products fell within the description of “woven

fabrics of synthetics filament yarn”, they were entitled ipso facto to

the benefit of the FPS in terms of S. No. 33 in Table 4 in Appendix

37D to the HBP.

31. Restriction of the items, the export of which would entitle the

exporter to incentive, is certainly permissible. That, however, has to

be by amendment of the HOP, and not by way of a clarificatory Policy

Circular. Further, any such amendment could not be permitted to

operate retrospectively, in view of para 48 of Asian Food Industries,

on which the learned Single Judge has rightly placed reliance.

Conclusion

32. For the aforesaid reasons, we find no case to interfere with the

impugned judgment of the learned Single Judge.

33. The appeals are accordingly dismissed, albeit without costs.

C. HARI SHANKAR, J.

OM PRAKASH SHUKLA, J.

JANUARY 13, 2026

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