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IN THE HIGH COURT OF CALCUTTA
Md. Nizamuddin, J.
Ruchi Soya Industries Ltd. - Appellant
Versus
Union Of India And Others - Respondent
WPA No. 1354 of 2021
Decided On : 12-08-2022
Customs Act - Enhanced Rate of Duty - Section 15, Section 46, Section 47 - The court held that the time of presenting the bill of entry is an essential criteria for determination of rate of duty. The action of the customs authority in charging enhanced rate of duty based on a notification with retrospective effect was deemed arbitrary, illegal, and not sustainable in law. The court directed the authorities to refund the excess duty amounting to Rs. 96,60,467/- within 8 weeks from the date of communication of the order.
Fact of the Case:
The petitioner filed a Writ Petition against the action of the customs authorities charging enhanced rate of duty on consignments based on a notification with retrospective effect. The petitioner sought quashing of the impugned reassessment of bills of entry and refund of the excess duty amount.
Finding of the Court:
The court found that the time of presenting the bill of entry is an essential criteria for determination of rate of duty. It held that the action of the customs authority in charging enhanced rate of duty based on a notification with retrospective effect was arbitrary, illegal, and not sustainable in law. The court directed the authorities to refund the excess duty amounting to Rs. 96,60,467/- within 8 weeks from the date of communication of the order.
Issues: The main legal issues involved in the Writ Petition were: (i) Criteria for determination of rate of duty and valuation of imported goods under Section 15 of the Customs Act, 1962, (ii) Legality of charging enhanced rate of duty based on a notification with retrospective effect, and (iii) Compliance with the law laid down by the Hon'ble Supreme Court in a relevant case.
Ratio Decidendi: The court held that the time of presenting the bill of entry is an essential criteria for determination of rate of duty. It also emphasized that the action of the customs authority in charging enhanced rate of duty based on a notification with retrospective effect was arbitrary, illegal, and not sustainable in law.
Final Decision: The court allowed the Writ Petition, directed the authorities to refund the excess duty amounting to Rs. 96,60,467/- within 8 weeks from the date of communication of the order, and stated that the petitioner will be at liberty to claim for interest on the refunded amount in accordance with law.
JUDGMENT
Md. Nizamuddin, J. - Heard learned counsel appearing for the parties.
2. This Writ Petition has been filed by the petitioner being aggrieved by the action of the respondents customs authorities concerned charging enhanced rate of duty on the consignments in question on the basis of the impugned notification No. 103/2020-Customs (N.T.) dated 29th October, 2020 effective and operational from 23:18:25 hrs of 2020 by applying the same retrospectively and making prayer for quashing the impugned reassessment of bills of entry in question on the basis of which petitioner was asked to pay duty of higher tariff value for clearance of the goods in question.
3. Main legal issues involve in this Writ Petition are as hereunder,-
(i) Whether as per Section 15 of the Customs Act, 1962, for determination of the rate of duty and valuation of imported goods, in the case of goods in question which entered for home consumption under Section 46 of the Customs Act, only the date on which the bills of entry in respect of the goods is presented is the only criteria or the time of presenting the bill of entry on said date is also an essential criteria for determination of rate of duty?
(ii) Whether action of the respondents customs authority concerned was legally justified in charging the enhanced rate of duty on the goods in question on the basis of the impugned notification No. 103/2020-Customs (N.T.) dated 29.10.2020 which was e-gazetted and digitally signed on 29.10.2020 at 23:18:25 hrs whereby Tariff Value of the subject goods was enhanced from USD 755MT to USD 782 MT while it is an admitted position substantiated by record that bills of entry relating to goods in question were already self assessed on 23.10.2020 and 26.10.2020 at the prevailing rate of duty and Entry inward was granted to the vessel in question carrying the subject goods on 29.10.2020 at 11:00 hrs which is the time prior to the time of coming into effect the aforesaid E-Gazetted Notification dated 29.10.2020 at 23:18:25 hrs?
(iii) Whether on the facts and in the circumstances of the case and in view of Section 15 read with Section 46 of the Customs Act, 1962 and in view of the law laid down by the Hon'ble Supreme Court in the case of Union of India & Ors. -Vs- G.S. Chatha Rice Mills & Anr. reported in 2020 SCC OnLine SC 770, charging at enhanced rate of duty on the goods in question on the basis of the aforesaid E-Gazette Notification dated 29.10.2020 by giving retrospective effect to it, is arbitrary, illegal and contrary to law?
4. Relevant facts involved in brief in the instant case as appears from record are as hereunder.
5. On 14.9.2020, 16.9.2020, 02.10.2020 and 08.10.2020 petitioner entered into four contracts dated 14.9.2020, 16.9.2020, 02.10.2020 and 08.10.2020 with its foreign supplier at Singapore for import of 14000 MTs of Crude Palm Oil of Edible Grade in Bulk. Against the aforesaid contracts aforementioned named foreign supplier supplied 13,084.71 MTs of the subject goods vide vessel MT Tiger Harmony.
6. The aforesaid subject goods were supplied on 12.10.2020 against Six Invoices (two invoices dated 30.09.2020, one invoice dated 1.10.2020, 02.10.2020, 11.10.2020 and 12.10.2020 respectively). Further, the aforesaid subject goods were shipped against Sixteen Bills of Landing (five Bills of Landing dated 30.9.2020, four Bills of Landing dated 01.10.2020, six Bills of Landing dated 11.10.2020 and one Bill of Landing dated 12.10.2020).
7. On 15.10.2020 tariff value in regard to the subject goods was fixed at the rate of 755 USD PMT vide notification No. 100/2020-Customs (N.T.) dated 15.10.2020 issued under Section 14 (2) of the Customs Act, 1962.
8. Petitioner filed seven Bills of Entry under self-assessment for 10084.717 MTs of the subject goods under Section 46 of the Customs Act, 1962 on 21.10.2020 and 22.10.2020, seeking clearance of the said goods for home consumption.
9. Petitioner paid the assessed Social Welfare Surcharge and IGST on 23.10.2020 and 26.10.2020 vide
The time of presenting the bill of entry is an essential criteria for determination of rate of duty, and charging enhanced rate of duty based on a notification with retrospective effect is deemed arb....
The effective date of a notification under Section 25(4) of the Customs Act is the date of its publication in the Official Gazette in e-mode.
The court declared Section 25(4) of the Customs Act unconstitutional, asserting that notification increases in duty require proper publication to inform the public adequately.
The customs authorities have the power and jurisdiction to make corrections of any clerical or arithmetical mistakes or errors arising in any decision or order due to any accidental slip or omission ....
Show cause notices issued prior to 29.03.2018 must be adjudicated within one year from that date; otherwise, they lapse.
The court affirmed that the power under Section 28 of the Customs Act allows for the determination of duties without requiring prior verification of self-assessment under Section 17.
Customs duty is only applicable at the time of first entry into India, and not on subsequent conversions, as retrospective application of exemptions violates established legal principles.
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