The petitioner had applied for the issuance of a duty credit scrip under the Merchandise Export from India Scheme (MEIS) for goods exported to the UAE. However, the goods were warehoused in the Free Trade and Warehousing Zone (FTWZ) in Andhra Pradesh, based on the instructions of the overseas buyer. This application was made for the period between January 2016 and March 2016.

The application was initially rejected by the JDGFT on 3 June 2020, leading the petitioner to file a writ petition (No. 5156 of 2021) before the Bombay High Court. The Court upheld the rejection due to the absence of documentary evidence but granted the petitioner a final opportunity to submit additional documents to support the claim. Following this, the petitioner submitted a fresh application on 27 January 2022, along with a detailed set of documents.

However, JDGFT rejected the fresh application on 9 December 2022, citing paragraph 3.06 of the Foreign Trade Policy, which states that exports made by FTWZ units are ineligible for duty credit scrips. The rejection was also based on the fact that the petitioner himself had accepted that the supplies were covered under ineligible categories.

The petitioner, represented by counsel Mr. Nair, argued that the appeal was maintainable under Section 9 of the Foreign Trade (Development and Regulation) Act, 1992, which deals with the issuance, suspension, and cancellation of licenses, and should be read in conjunction with Section 15. He contended that the rejection letter was a non-speaking order and failed to consider the voluminous documentary evidence provided with the fresh application. Therefore, the petitioner sought the quashing of the ADGFT’s order and a remand of the matter for fresh consideration.

The respondents, represented by Mr. Mishra, countered that Section 15 of the 1992 Act allows appeals only against orders passed by the adjudicating authority, which did not apply to the rejection letter in question. They also argued that the appeal should have been filed with the Director General, not with the ADGFT. Furthermore, they contended that the rejection letter adequately explained the basis for the refusal, as it referenced the ineligibility of the supplies under the Foreign Trade Policy.

The Court examined the key provisions of the Foreign Trade (Development and Regulation) Act, particularly Section 9 and Section 15. Section 9 governs the issuance, renewal, and refusal of licenses, certificates, and scrips, and Section 15 provides for appeals against decisions made by adjudicating authorities. The Court noted that while Section 9 deals with the issuance of MEIS scrips, the authority processing the application could still be considered as an "adjudicating authority" for the purposes of Section 15, even though the authority was not involved in imposing penalties or confiscating goods, which typically fall under the adjudicating authority's purview.

The Court also emphasized that Section 9(5) provides for appeals against refusal to grant or renew licenses or scrips, similar to the appeal process under Section 15. The Court found that the ADGFT had incorrectly rejected the appeal based on an erroneous interpretation of the law. Furthermore, the Court noted that the rejection letter issued by JDGFT did not adequately address the petitioner’s claim or provide a detailed explanation, which is a requirement for a quasi-judicial authority.

In light of the above, the Court ruled that the ADGFT’s refusal to entertain the appeal was not justified. The rejection letter by the JDGFT was deemed inadequate as it did not provide sufficient reasoning for rejecting the petitioner’s claim. The Court quashed the Order-in-Appeal and the rejection letter, directing the JDGFT to reconsider the application for MEIS scrips in a manner consistent with the principles of natural justice. The Court further ordered that the JDGFT should give the petitioner an opportunity for a personal hearing and issue a speaking order by 31 March 2025.

This case underscores the importance of clear, reasoned decisions by administrative authorities in the foreign trade sector. It also highlights the role of the appellate process in ensuring that exporters' claims are given due consideration. The decision sets a precedent for interpreting the appeal provisions under the Foreign Trade (Development and Regulation) Act and clarifies the scope of "adjudicating authority" in the context of the issuance of MEIS scrips. In doing so, it reinforces the need for administrative authorities to act transparently and provide detailed justifications for their decisions.