The Supreme Court in the case Chowgule & Company Limited vs Assistant Director General of Foreign Trade observed and has stated that the Director General of Foreign Trade is free to change the Export Import (Exim) Policy and considering them from time to time on which items there shall be an incentive.
In the present case, it was observed that under the Indian Foreign Trade Policy 1988 to 1991, there was a provision of ‘additional licence’ and a trading house would be eligible for the ‘additional licence’ on the basis of the admissible exports in the preceding licensing year. Therefore, the Chowgule and Company Limited was engaged in the export of processed iron ore and being a recognised trading house. The Bombay High Court (at Goa), while dismissing the writ petition held that it was not entitled to the benefit of additional licence on the export of processed iron ore during the period April, 1990 to the month of March, 1991.
Before the High Court, it was contended by the appellant that while relying upon the original Exim Policy, 1988-1991 and being acting upon the said policy and it had entered into a contract with one NKK Corporation, Japan. It was contended that while agreeing and negotiating for price with the importer, it factored in the price component, the incentive of additional licence which was in force at the time under the prevalent policy. However, the appellant in the matter relied on the doctrine of promissory estoppel in this regard. The Centre contended that being a policy decision, it has always been open to the Department/DGFT to come out with a modified, new, fresh Exim Policy. Therefore, it is submitted that the principle of promissory estoppel shall not be applicable at all.
The bench comprising of Justice MR Shah and Justice Krishna Murari observed that the Union or DGFT is free to change the Exim Policy and consider from time to time on which items there shall be an incentive and on which items there shall not be any kind of incentive. For granting the benefit of an incentive is a policy decision which may be varied an can even be withdran. As a matter of right, no incentive can be claimed by the exporter. Under such circumstances, the doctrine of promissory estoppel shall not be applicable to such a policy decision with respect to incentive, more particularly when it is well within the right of DGFT, the appropriate authority or the Union to come out with a new Exim Policy.
While dismissing the appeal, it was also observed by the court that the appellant cannot be allowed for getting any benefit of additional licence on the ground that some others might have been granted with such benefits de hors the scheme. Adding to it, the bench observed that there cannot be any negative discrimination which may perpetuate the illegality.
