M/S SHAH NANJI NAGSI EXPORTS PVT. LTD.versusUNION OF INDIA AND ORS.

         [2025] 8 S.C.R. 2394 : 2025 INSC 1032

        M/s Shah Nanji Nagsi Exports Pvt. Ltd.
                          v.
               Union of India and Ors.
               (Civil Appeal No. 10897 of 2025)
                         19 August 2025
         [Aravind Kumar and N.V. Anjaria, JJ.]


                     Issue for Consideration
Issue arose whether an inadvertent error in the shipping bills, which
was permitted to be corrected u/s.149 of the Customs Act, 1962
can defeat appellant-exporter’s claim under the MEIS-Merchandise
Exports from India Scheme.

                            Headnotes†
Customs Act, 1962 – s.149 – Amendment of documents –
Inadvertent error in the shipping bills, which was permitted to
be corrected u/s.149, if can defeat appellant-exporter’s claim
under the MEIS-Merchandise Exports from India Scheme:
Held: Once exports are genuine and fall within the notified category,
inadvertent mistakes of procedure cannot be treated as fatal,
especially where they are corrected under statutory authority –
Beneficial schemes must be construed liberally and that procedural
lapses, once rectified, cannot be allowed to defeat substantive
rights – Scheme under the Foreign Trade Policy is a beneficial one,
intended to reward exporters – Rejection by the Policy Relaxation
Committee, bereft of reasons and passed without hearing, falls
foul of the principles of natural justice – High Court’s view that
the appellant-exporter may proceed against the customs broker
fails to address the statutory entitlement which accrues to the
exporter under the scheme – Administrative technology must aid,
not obstruct, the implementation of the law – Judgment of the High
Court set aside – Rejection by the Policy Relaxation Committee is
quashed – Respondents directed to process the appellant’s claim
for MEIS benefit on the basis of the amended shipping bills and to
pass appropriate orders in accordance with law – Union of India
to take appropriate measures, to ensure that genuine exporters
are not driven to needless litigation on account of inadvertent
procedural lapses which have been rectified in accordance with
law. [Paras 13-16]
[2025] 8 S.C.R.                                                               2395

     M/s Shah Nanji Nagsi Exports Pvt. Ltd. v. Union of India and Ors.


                               Case Law Cited
      Portescap India Private Limited v. Union of India & Others, 2021
      SCC OnLine Bom 285; Technocraft Industries (India) Limited v.
      Union of India and Others, 2023 SCC OnLine Bom 280; Larsen
      and Toubro Limited v. Union of India and Others, 2024 SCC OnLine
      Bom 3565 – approved.

                                  List of Acts
      Customs Act, 1962.

                               List of Keywords
      Inadvertent error in the shipping bills; Exporter’s claim; Merchandise
      Exports from India Scheme; Beneficial schemes; Procedural
      lapses; Principles of natural justice; Customs broker; Administrative
      technology; Policy Relaxation Committee; Directorate General
      of Foreign Trade; Central Board of Indirect Taxes and Customs;
      Technological adjustments.

                              Case Arising From
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10897 of 2025
      From the Judgment and Order dated 02.08.2021 of the High Court
      of Judicature at Bombay at Nagpur in WP No.4095 of 2019

                          Appearances for Parties
      Advs. for the Appellant:
      Gagan Sanghi, Mrs. Farah Hashmi, Rameshwar Prasad Goyal.
      Advs. for the Respondents:
      S Dwarakanath, A.S.G., Raj Bahadur Yadav, Gurmeet Singh
      Makker, Rohit Khare, Digvijay Dam, Navanjay Mahapatra, Ishaan
      Sharma, Raghav Sharma, Rajat Vaishnaw, Abhyudey Kabra.

                 Judgment / Order of the Supreme Court

                                     Order

1.    Leave granted.
2.    This appeal calls in question the judgment of the High Court of
      Judicature at Bombay, Nagpur Bench, rendered on 02.08.2021 in
2396                                                        [2025] 8 S.C.R.

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     Writ Petition No. 4095 of 2019, by which the writ petition instituted by
     the appellant was dismissed. The High Court took the view that the
     error which had crept in while filing of shipping bills was attributable
     to the customs broker, and that the appellant, if so advised, could
     pursue his remedies against the broker but no relief could be granted
     in exercise of writ jurisdiction.
3.   The facts are largely undisputed. The appellant is a private company
     engaged in the export of corn starch. During the period between
     22.07.2017 to 05.10.2017, the appellant effected 54 (fifty-four)
     shipping bills under Serial No. 467 of Appendix 3B to the Foreign
     Trade Policy (FTP) 2015–20 and was eligible for incentive under the
     Merchandise Exports from India Scheme (hereinafter referred to as
     “MEIS”) contained in Chapter 3 of the Policy.
4.   For each of these consignments, shipping bills were filed electronically
     on the ICEGATE platform through the appellant’s customs broker.
     It so happened that in the column requiring a declaration of intent
     to claim reward, the default entry “No” which was to be altered as
     “Yes” was not done by Customs broker. This inadvertent omission,
     though clerical in nature, prevented the shipping bills from being
     transmitted to the repository of the Directorate General of Foreign
     Trade (DGFT). The consequence was that the appellant’s claim for
     MEIS reward could not be processed electronically.
5.   On discovering the error, the appellant addressed a representation
     dated 13.03.2018 to the Regional Authority of DGFT. At the same
     time, an application was made before the Deputy Commissioner of
     Customs, Mundra, invoking Section 149 of the Customs Act, 1962.
     By an order dated 08.06.2018, the Deputy Commissioner allowed
     the amendment of all shipping bills, so that the declaration “No” was
     substituted by “Yes”. The fact of this correction is not in dispute.
6.   Despite the correction, when the appellant pursued the matter
     with DGFT, it was informed that the system permitted no manual
     intervention and that unless the shipping bills were originally
     transmitted with the entry “Yes”, they could not be processed.
     The appellant as a consequence, was compelled to approach the
     Policy Relaxation Committee (hereinafter referred to as “PRC”) on
     05.12.2018. The PRC, however, by a cryptic email dated 15.03.2019,
     rejected the claim, stating merely that no merit or hardship was made
     out. No reasons were assigned, nor was the appellant afforded an
     opportunity of being heard.
[2025] 8 S.C.R.                                                       2397

     M/s Shah Nanji Nagsi Exports Pvt. Ltd. v. Union of India and Ors.


7.    Aggrieved thereby, the appellant instituted Writ Petition No. 4095 of
      2019 before the Nagpur Bench of the Bombay High Court. During
      its pendency, a Division Bench of the Bombay High Court delivered
      its judgment in Portescap India Private Limited v. Union of India
      & Others1 on 02.03.2021, dealing with an identical issue. A pursis
      was filed by the appellant bringing the judgment to the notice of the
      Court. Nonetheless, by its judgment dated 02.08.2021, the High
      Court dismissed the writ petition.
8.    We have heard Learned Counsel, Mr. Gagan Sanghi, appearing for
      the Appellant and Shri S. Dwarakanath, Additional Solicitor General,
      appearing for the Respondents. Learned counsel for the appellant
      submitted that the exports were genuine, covered under the notified
      products in Appendix 3B, and that the intention to claim MEIS was
      evident from the invoices. It was urged that once the Customs
      authority had corrected the shipping bills under Section 149, the
      bills stood regularised in law and were required to be acted upon.
      Further it was contended that the rejection by the PRC was arbitrary
      and violative of the principles of natural justice as no reasons were
      assigned nor hearing granted. Further it was submitted that the High
      Court, erred in relegating the appellant to pursue remedies against
      the broker, when the entitlement arose under the statutory scheme.
      Reliance was placed upon Portescap India Private Limited (supra),
      which had attained finality.
9.    Per contra, learned Additional Solicitor General appearing for the
      respondents submitted that the FTP and Handbook of Procedures
      required a declaration of intent to be made on the shipping bill at the
      time of export. Unless “Yes” was so marked, the DGFT system could
      not accept the claim or process the claim, and no manual over-writing
      was permissible. It was urged that MEIS is a policy incentive, and
      strict compliance with procedure is mandatory. The PRC, being the
      competent authority, considered the matter and rejected it. The High
      Court was, therefore, correct in declining to grant relief.
10. The principal question for consideration is whether an inadvertent
    error in the shipping bills, which was permitted to be corrected under
    Section 149 of the Customs Act, can defeat an exporter’s claim
    under the MEIS?


1    (2021) SCC OnLine Bom 285
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11. This issue has received judicial consideration in a line of decisions
    of the Bombay High Court. In Portescap India Private Limited
    (supra), the Bombay High Court dealt with a similar situation where
    an exporter had inadvertently marked “N” (for No) instead of “Y” (for
    Yes) while filing shipping bills. The High Court held that such a mistake
    was purely procedural and, once corrected, could not extinguish
    substantive entitlement. The Court directed the authorities to process
    the claim, emphasising that the purpose of Chapter 3 of the FTP
    is to incentivise exports and that this object would be frustrated if
    inadvertent mistakes were treated as insurmountable. The ratio of
    Portescap (supra) is squarely applicable to the present case.
12. The principle was reiterated in Technocraft Industries (India)
    Limited v. Union of India and Others2, where the Bombay High
    Court again considered denial of MEIS benefits despite the shipping
    bills having been corrected under Section 149. The High Court noted
    the hardship faced by exporters and directed the Customs and DGFT
    authorities to take appropriate steps to prevent recurrence of such
    disputes, observing that systemic rigidity cannot be allowed to defeat
    substantive rights. The facts of the present case furnish an illustration
    of the very mischief which Technocraft (supra) sought to remedy.
13. In Larsen and Toubro Limited v. Union of India and Others3, the
    Bombay High Court dealt with a similar rejection of MEIS claims
    despite amendment under Section 149. The High Court deprecated
    the rejection, holding that technical or systemic constraints cannot
    override statutory entitlements. The High Court went to the extent of
    imposing costs upon the DGFT. While we do not consider it necessary
    to adopt that course, we find ourselves in respectful agreement with
    the principle enunciated that beneficial schemes must be construed
    liberally and that procedural lapses, once rectified, cannot be allowed
    to defeat substantive rights.
14. These decisions, read together, demonstrate a consistent judicial
    approach that distinguishes between procedural formalities and
    substantive entitlements. The scheme under Chapter 3 of the FTP
    is a beneficial one, intended to reward exporters. Once exports are
    genuine and fall within the notified category, inadvertent mistakes


2   (2023) SCC OnLine Bom 280
3   (2024) SCC OnLine Bom 3565
[2025] 8 S.C.R.                                                       2399

   M/s Shah Nanji Nagsi Exports Pvt. Ltd. v. Union of India and Ors.


     of procedure cannot be treated as fatal, especially where they are
     corrected under statutory authority. The rejection by the PRC, bereft
     of reasons and passed without hearing, falls foul of the principles of
     natural justice. The High Court’s view that the appellant may proceed
     against the customs broker fails to address the statutory entitlement
     which accrues to the exporter under the scheme. Administrative
     technology must aid, not obstruct, the implementation of the law.
15. In light of the above discussion, the appeal deserves to be allowed.
    The judgment of the High Court dated 02.08.2021 is set aside.
    The rejection by the Policy Relaxation Committee is quashed. The
    respondents are directed to process the appellant’s claim for MEIS
    benefit on the basis of the amended shipping bills and to pass
    appropriate orders in accordance with law within a period of twelve
    weeks from the date of this judgment.
16. While we refrain from imposing costs, we cannot but observe that the
    recurrence of such disputes, despite authoritative pronouncements
    in Portescap, Technocraft Industries and Larsen and Toubro
    Limited, underscores the need for systemic correction. The Union
    of India, acting through the Directorate General of Foreign Trade
    and the Central Board of Indirect Taxes and Customs, must take
    appropriate measures, whether by issuing comprehensive instructions
    or by suitable technological adjustments, to ensure that genuine
    exporters are not driven to needless litigation on account of inadvertent
    procedural lapses which have been rectified in accordance with law.
17. The appeal is allowed in the above terms. There shall be no order
    as to costs.

     Result of the case: Appeal allowed.




     †
         Headnotes prepared by: Nidhi Jain