GMR Hotels and Resorts Ltd is 100 % subsidiary holding company of GMR Hyderabad International Airport Limited (for short referred to as GHIAL). Petitioner is one of the group companies of GHIAL. In recognition of exports carried out by the petitioner, competent authority issued Duty Credit scrips dated 4.7.2013 in all thirteen in number worth Rs.1,25,56,045/-, which can be encashed while importing goods specified in the Served From India Scheme. These scrips are transferable within the group company. Therefore, petitioner requested the Director General of Foreign Trade to permit utilisation of scrips by GHIAL. But he refused- Generally Duty Credit Scrips are not transferable but within the group companies, the said scrips can be transferred. While granting relaxation of conditions of non-transferability of Duty Credit Scrip within group companies, it has not put any further restrictions. Para 9.28 only deals with definition of term Group Company. On reading of this definition, it would mean that to qualify to be a group company, an enterprise must have minimum of 26% or more voting rights or in a position to appoint more than 50% of Board of Directors in another company. It does not envisage that the company which earned Duty Credit Scrips alone should hold 26 % or more voting rights or has power to appoint more than 50 % of Board of Directors in the other company. On a plain reading, neither the provision in para 3.12.7 nor definition in para 9.28 seeks to restrict transfer of Duty Credit Scrip from a group company to another company based on holding capacity as understood by the Director General of Foreign Trade. Chapter 3 and more particularly para 3.12 deals with incentive scheme for export of services and is a beneficial scheme. Such beneficial scheme must receive liberal construction. The petitioner company availed the SFIS and earned Duty Credit Scrips. When relevant provision does not impose any restriction on transferability of Duty Credit Scrips by invoking power of interpretation, Director General of Foreign Trade cannot introduce something which is not envisaged and impose an additional restriction. The Director General of Foreign Trade has only power to interpret the existing clauses but cannot seek to amend or alter the Foreign Trade Policy terms. The impugned decision amounts to altering the terms of Served From India Scheme and is in excess of power and jurisdiction vested in him. For the foregoing reasons, the impugned proceedings dated 22.7.2014 is set aside and second respondent is directed to receive served from India Duty Credit scrip No.09100566123 dated 4.7.2013 and transfer the same in favour of GMR Hyderabad International Airport Limited in terms of Foreign Trade Policy 2009-2014, if necessary by extending the period of validity for a further period of six months from 3.1.2015. -2015 A.P.(2014)MSKLAWREPORTS

  GMR Hotels and Resorts Ltd is 100 % subsidiary holding company of GMR Hyderabad
International Airport Limited (for short referred to as GHIAL).  
Petitioner is one  of the group companies of GHIAL.
 In recognition of exports carried out by the petitioner, competent authority issued Duty Credit scrips dated 4.7.2013 in all thirteen in number worth Rs.1,25,56,045/-, which can be encashed while importing goods specified in the Served From India Scheme.  
These scrips are transferable within the group company.  
Therefore, petitioner requested the
Director General of Foreign Trade to permit utilisation of scrips by GHIAL. But he refused-

Generally Duty Credit Scrips are not transferable but within the group companies, the said scrips can be transferred.
While granting relaxation of conditions of non-transferability of Duty Credit Scrip within group companies, it has not put any further restrictions.
Para 9.28 only deals with definition of term Group Company.
On  reading of this definition, it would  mean that to qualify to be a group company, an enterprise must have minimum  of 26% or more voting rights or in a position to appoint more than 50% of Board of Directors in another company.
It does not envisage that the company which earned Duty Credit Scrips alone should hold 26 % or more voting rights or has power to appoint more than 50 % of Board of Directors in the other company.
On a plain reading, neither the provision in para 3.12.7 nor definition in para 9.28 seeks to restrict transfer of Duty Credit Scrip from a group company to another company based on holding capacity as understood by the Director  General of Foreign Trade.  
Chapter 3 and more particularly para 3.12 deals with incentive scheme for export of services and is a beneficial scheme.
Such beneficial scheme must receive liberal construction.
The petitioner company availed the SFIS  and earned Duty Credit Scrips.
When relevant provision does not impose any restriction on transferability of Duty Credit Scrips by invoking power of interpretation,   Director General of Foreign Trade cannot introduce something which is not envisaged and impose an additional restriction.  
The Director General of Foreign Trade has only power to interpret the existing clauses but cannot seek to amend or alter the Foreign Trade Policy terms.   The impugned decision amounts to altering the terms of Served From India Scheme and is in excess of power and jurisdiction vested in him.        
For the foregoing reasons, the impugned proceedings dated 22.7.2014 is set aside and second respondent is directed to receive served from India Duty Credit scrip No.09100566123 dated 4.7.2013 and transfer the same in favour of GMR Hyderabad International Airport Limited in terms of Foreign Trade Policy 2009-2014, if necessary by extending the period of validity for a further period of six months from 3.1.2015. -2015 A.P.(2014)MSKLAWREPORTS

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