War-delayed cargo, export mission schemes and a curious court ruling

Experts explain insurance limits on cargo delays due to war disruptions, clarify DGFT export schemes for large firms, and decode the Supreme Court ruling on DEEC benefits and licence validity

We had sent some cargo to Europe through Emirates Airline just before start of the recent hostilities in West Asia. The cargo is stuck in Dubai because onward flights are cancelled due to the Iran war. The cargo can deteriorate unless kept in cold storage. We have taken marine insurance as per Institute Cargo Clauses (All Risks), Institute War Clauses and Institute Strikes, Riots and Civil Commotion Clauses. What is our status for any insurance claim now? 

All three standard Institute clause sets exclude loss caused by delay, even when the delay itself results from an insured peril. Therefore, if the cargo deteriorates merely because it is stuck in Dubai and reaches its destination late, the insurer may argue that the loss is due to delay and therefore not payable, even though the flight disruption arose from war-related events. However, reimbursement of reasonable expenses incurred to preserve or protect the cargo—such as cold storage, emergency handling or other measures taken to minimise loss—may still be sustainable. You should therefore focus on mitigating the loss and maintaining proper documentation of preservation expenses. 

We are manufacturers holding 3-star export house recognition. We refer to several schemes under the Export Promotion Mission (EPM) announced recently by the Directorate General of Foreign Trade (DGFT) through a dozen trade notices between end January and early March. We observe that most of the schemes are for MSMEs or organisations that help promote exports. We are not an MSME and therefore not eligible for these schemes. Is our understanding correct? 

Broadly speaking, yes. Many of the schemes announced under the EPM are aimed at MSMEs or organisations that support export promotion. However, larger exporters may still benefit indirectly from initiatives such as Integrated Support for Trade Intelligence and Facilitation (INSIGHT), Facilitating Logistics, Overseas Warehousing and Fulfilment (FLOW), and Logistics Interventions for Freight and Transport (LIFT). These initiatives are intended to strengthen the overall export ecosystem. 

We request your comment on the Supreme Court’s recent judgment in the case of Bangalore Mono Filaments [(2026) 40 Centax 60 (SC)] saying that the assessee is not entitled to DEEC benefit when the advance licence had expired when the goods were cleared from warehouse duty-free even though the licence was valid when it was transferred to the importer. 

In this case, the imports were made in January 2000 and clearance from the bonded warehouse was sought in December 2000.  Para 4.15(c) of the HBP 2000-01 stated that the validity of an import licence is to be determined with reference to the date of shipment or dispatch of the goods from the supplying country and not the date of arrival of the goods at an Indian port. Surprisingly, this point was not agitated before the Court and therefore was not considered in the judgment. Instead, the Court relied on Sections 15 and 68 of the Customs Act, 1962, which are relevant for determining the rate of duty at the time of clearance of goods from a warehouse.  The said Para 4.15 also stated that DEPB, being a duty credit entitlement, must be valid on the date on which the actual debit of duty is made. Paras 2.17(a), 2.18(a), 2.19 and 11.11 of HBP 2023 and Para 2.12 of FTP 2023 indicate that broadly the same position continues even today.

Business Standard invites readers’ SME queries related to GST, export and import matters. You can write to us at smechat@bsmail.in