Inadvertent Shipping-Bill Error Does Not Defeat MEIS Entitlement
A bench of Justices Aravind Kumar and N.V. Anjaria of the Supreme Court heard an appeal challenging the Bombay High Court’s dismissal of a writ petition by an exporter who alleged denial of Merchandise Exports from India Scheme (MEIS) benefits due to a clerical omission in electronically filed shipping bills. The issue was whether an inadvertent “No” entry in the customs filing, later corrected under Section 149 of the Customs Act, could extinguish a substantive entitlement to incentive benefits under the Foreign Trade Policy.
The Court allowed the appeal, set aside the High Court order and quashed the Policy Relaxation Committee’s rejection, directing authorities to process the claimant’s MEIS application on the basis of the amended shipping bills within twelve weeks. The Court held that the FTP scheme was beneficial and that procedural lapses, once rectified under statutory authority, could not be permitted to defeat substantive rights. The Court, in its reasoning, observed: The Court directed the Directorate General of Foreign Trade and the Central Board of Indirect Taxes and Customs to take systemic measures to prevent recurrence of such disputes.
Background The appellant, a private company engaged in export of corn starch, filed 54 shipping bills between 22 July 2017 and 5 October 2017 under Appendix 3B of the FTP 2015–20 and sought MEIS reward. Shipping bills were filed electronically on ICEGATE through the company’s customs broker. In the column requiring a declaration of intent to claim reward the default entry “No” was not changed to “Yes” by the broker; that omission prevented transmission of the bills to the DGFT repository and thereby blocked electronic processing of the MEIS claim.
On discovering the omission the exporter sought corrective orders. The Deputy Commissioner of Customs at Mundra allowed amendment of all shipping bills under Section 149 of the Customs Act by order dated 8 June 2018. Despite this statutory correction, DGFT maintained that the system did not permit manual intervention and refused to process claims not originally transmitted with “Yes”. The appellant applied to the Policy Relaxation Committee on 5 December 2018; the PRC rejected the claim by email dated 15 March 2019 stating that "no merit or hardship was made out," without assigning reasons or affording a hearing.
The appellant challenged the PRC rejection before the Nagpur Bench of the Bombay High Court, which dismissed the writ petition on 2 August 2021, holding that the error was attributable to the customs broker and that the exporter should pursue remedies against the broker. The Supreme Court noted that earlier Bombay High Court decisions — Portescap India Pvt. Ltd., Technocraft Industries (India) Ltd., and Larsen & Toubro Ltd. — had reached the opposite conclusion, treating such mistakes as procedural and remediable where corrected under Section 149. Applying that line of authority, the Supreme Court found the PRC decision arbitrary and violative of natural justice, held that the statutory entitlement accrued to the exporter, and directed reprocessing of the claim. The appeal was allowed and there was no order as to costs.
Case Details: Case No.: Special Leave Petition (C) No. 14919 of 2021 (Civil Appeal in 2025) Case Title: M/s Shah Nanji Nagsi Exports Pvt. Ltd. v. Union of India & Ors. Appearances: For the Petitioner(s): Mr. Gagan Sanghi, Adv.; Mrs. Farah Hashmi, Adv.; Mr. Rameshwar Prasad Goyal, AOR For the Respondent(s): Mr. Raj Bahadur Yadav, AOR; Mr. S. Dwarakanath, Additional Solicitor General; Mr. Gurmeet Singh Makker, AOR; Mr. Rohit Khare, Adv.; Mr. Digvijay Dam, Adv.; Mr. Navanjay Mahapatra, Adv.; Mr. Ishaan Sharma, Adv.; Mr. Raghav Sharma, Adv.; Mr. Rajat Vaishnaw, Adv.; Mr. Abhyudey Kabra, Adv.