https://aadrikaalaw.com/2026/05/09/madras-high-court-clarifies-jurisdiction-on-export-incentives/ [09/05, 20:27] Meta AI: *Madras High Court Clarifies Jurisdiction on Export Incentives* *AadrikaaLaw.com | 09 May 2026 | Source: Madras HC* *1. Core ruling: Who controls export incentives?*

[09/05, 20:27] sekarreporter1: https://aadrikaalaw.com/2026/05/09/madras-high-court-clarifies-jurisdiction-on-export-incentives/
[09/05, 20:27] Meta AI: *Madras High Court Clarifies Jurisdiction on Export Incentives*
*AadrikaaLaw.com | 09 May 2026 | Source: Madras HC*

*1. Core ruling: Who controls export incentives?*
*Key clarification*:
1. *DGFT has exclusive jurisdiction* over export incentives like MEIS/SEIS.
2. *Customs cannot penalize* exporters or customs brokers for classification errors in incentive claims _unless DGFT initiates action first_.
3. *Penalties need proof of wilful intent* – mere mistakes/clerical errors ≠ penalty.

*2. Why this matters for exporters & customs brokers*
*Protections given*:
– *Clear separation of powers*: Stops customs from overreaching into DGFT domain. Customs can’t issue SCN for duty recovery u/s 28AAA unless DGFT challenges the Duty Credit Scrips.
– *No arbitrary penalties*: Classification error alone doesn’t attract penalty. Intent to evade must be proved. d15e

*Still at risk if*: Intentional misclassification is proven. d15e

*3. Related Madras HC principles on export incentives*
The court has consistently favored _“substance over form”_ for genuine exporters:

1. *Procedural lapses ≠ denial*: _“Procedural irregularity should not come in legitimate way of grant of export incentives”_. If export is genuine, technical breach of GST Sec 129 can’t deny incentive.

2. *Rules are handmaids of justice*: Citing SC in _Auriaya Chamber of Commerce_, HC said procedures can’t defeat legitimate claims.

3. *Bona fide intent key*: As long as exporter shows genuine export + no mala fide intent, incentives can’t be denied for minor slips.

4. *But fraud ≠ protected*: Export incentives _“are not to be given for proceeds of crime”_. Illegally mined sea sand exports = no incentive, regardless of customs inaction. 9b77bb7704674cd9

*4. Practical takeaways*
1. *For exporters/brokers*: Maintain accurate classification + documentation. Errors won’t hurt if unintentional, but DGFT is the authority to question incentive eligibility.
2. *For customs*: Can’t assume DGFT’s role. Must wait for DGFT to challenge scrips before issuing demand notices.
3. *For disputes*: If customs imposes penalty for technical GST breach wiping out incentive benefit, it defeats scheme purpose – courts will intervene. d15e8ed40467

*Bottom Line*: This 2026 judgment strengthens exporter protection against customs overreach on MEIS/SEIS. But it’s not a license for fraud – _legitimate exports only_. DGFT remains the gatekeeper for incentive eligibility.

Want the full judgment text or Aadrikaa Law’s compliance checklist for MEIS claims?