{"id":9036,"date":"2026-05-12T17:16:10","date_gmt":"2026-05-12T11:46:10","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=9036"},"modified":"2026-05-13T07:18:26","modified_gmt":"2026-05-13T01:48:26","slug":"customs-cant-recover-meis-benefits-without-dgft-action-hc","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/customs-cant-recover-meis-benefits-without-dgft-action-hc","title":{"rendered":"Customs Can\u2019t Recover MEIS Benefits Without DGFT Action | HC"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/foreign-trade-policy\/101010000000417987\/until-dgft-cancels-meis-scrips-customs-cant-assess-recoverable-value-of-ineligible-meis-scrips-writ-maintainable-hc\">Kwalitee Fabs vs. Commissioner of Customs, Tuticorin (2026) 41 Centax 37 (Mad.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>G.R. Swaminathan<\/strong> &amp; <strong>K. Rajasekaran,<\/strong> JJ.<\/li>\n<li><strong>S\/Shri V. Ragavachari,<\/strong> Senior Counsel for <strong>N. Sundaresan,<\/strong> for the Appellant.<\/li>\n<li><strong>Shri R. Gowri Shankar,<\/strong> Senior Standing Counsel, for the Respondent.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The appellant, an exporter of textile goods manufacturing both powerloom and handloom goods, was subjected to proceedings on the ground that powerloom goods had been declared as handloom goods and undue benefits had been availed under the Merchandise Exports from India Scheme (MEIS). After issuance of a show cause notice, an assessment order was passed demanding the value of ineligible MEIS duty scrips along with redemption fine and penalty. A writ petition questioning the said order was dismissed on the ground of the availability of an alternative remedy, against which the writ appeal came to be filed. The issue raised in the writ appeal related to the power and jurisdiction of the customs authorities to take action under Section 28AAA of the Customs Act, 1961, without prior determination by the Directorate General of Foreign Trade under the relevant provisions of the Foreign Trade Development and Regulation Act, 1992, the Rules, and the Foreign Trade Policy framed thereunder. Reliance was placed on the decisions of the Madras High Court in <a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2024)%2015%20Centax%2055%20(Mad.)&amp;itemType=AP\">Jeena &amp; Company<\/a> [(2024) 15 Centax 55 (Mad.)] and the Delhi High Court in <a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2026)%2039%20Centax%20151%20(Del.)&amp;itemType=AP\">Designo<\/a> [(2026) 39 Centax 151 (Del.)], holding that without prior determination by the Directorate General of Foreign Trade, the customs authority could not take action under Section 28AAA of the Customs Act, 1961. The matter was accordingly placed before the High Court.<\/p>\n<h2><em>High Court Held<\/em><\/h2>\n<p>The High Court held that the impugned order had been issued by invoking Section 28AAA of the Customs Act, 1961 and that the legal position laid down by the Madras High Court and the Delhi High Court would hold good till the Hon\u2019ble Supreme Court pronounced on the issue. It held that without prior determination by the Directorate General of Foreign Trade, the customs authority could not take action under Section 28AAA of the Customs Act, 1961. The High Court further held that once the order passed by the customs authority was found to be without jurisdiction, the writ petition was maintainable notwithstanding availability of alternative remedy. Accordingly, the order impugned in the writ petition was set aside with liberty to the customs authority to take up the matter with the Directorate General of Foreign Trade for appropriate action in accordance with law.<\/p>\n<h2><em>List of Cases Reviewed<\/em><\/h2>\n<ul>\n<li>Kwalitee Fabs v. Commissioner \u2014 W.P. (MD) No. 8609 of 2025, decided on 1-4-2025 by Madras High Court \u2014 Reversed [Paras 1, 5]<\/li>\n<\/ul>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2025)%2029%20Centax%202%20(S.C.)&amp;itemType=AP\">Commissioner v. Bharat Rasayan Ltd.<\/a> \u2014 2025 (393) E.L.T. 226 (S.C.) = (2025) 29 Centax 2 (S.C.) \u2014 Noted [Para 2]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2026)%2039%20Centax%20151%20(Del.)&amp;itemType=AP\">Designco v. Union of India<\/a> \u2014 (2026) 39 Centax 151 (Del.) \u2014 Relied on [Para 3]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2024)%2015%20Centax%2055%20(Mad.)&amp;itemType=AP\">Jeena &amp; Company v. Union of India<\/a> \u2014 (2024) 15 Centax 55 (Mad.) \u2014 Relied on [Para 3]<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Kwalitee Fabs vs. Commissioner of Customs, Tuticorin (2026) 41 Centax&hellip;<\/p>\n","protected":false},"author":19,"featured_media":9056,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[52,179,54],"tags":[],"class_list":["post-9036","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-foreign-trade-policy","category-news-foreign-trade-policy","category-ftp-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Customs Can\u2019t Recover MEIS Benefits Without DGFT Action | HC<\/title>\n<meta name=\"description\" content=\"HC rules Customs cannot invoke Section 28AAA for MEIS recovery unless DGFT first cancels or 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