2019 (8) TMI 1400 - HC - Customs

Release of imported goods from Pakistan - rate of duty - Vires of N/N. 5/2019-Customs dated 16.02.2019 - clearance / release of their goods, imported/originating from Pakistan and detained at the customs station Attari Border - stay of auction proceedings during the pendency of present petitions - Although the Petitioners have challenged vires of Notification No. 5/2019, however, counsel for the Petitioners at the time of arguments do not press their challenge to impugned notification and confine their prayer for release of goods on payment of duty applicable at the time of filing of bill of entry coupled with the entry of imported goods within the territory of India at the Attari Border in view of the provisions of Section 15 of the Customs Act, 1962. HELD THAT - The intent and purport of impugned notification was to discourage import from Pakistan and not to penalize Indian importers. All the Petitioners presented bill of entry on 16.02.2019 during working hours and duty liability was assessed on the same day because goods were presented alongwith bill of entry. There is no writ petition where bill of entry was filed prior to entry inward of vehicle carrying imported goods. In all the present cases/writ petitions, the Petitioners placed import orders prior to 16.02.2019 and received goods in India on or before 16.02.2019, admittedly before the impugned Notification was issued/uploaded at 8.45 PM on 16.02.2019 after the working hours. If the impugned notification is made applicable to them, it would amount to retrospective application which is not permissible in law. Without going into vires of impugned notification, it is held that all the Petitioners would be liable to pay duty as was applicable at the time of filing of bill of entry coupled with the fact of the imported goods having entered territory of India on 16.02.2019 prior to the issuance of the impugned notification. The Respondent shall release goods within seven days on payment of duty as declared and assessed, if not already paid, ignoring the impugned N/N. 5/2019. Petition allowed.

Issues Involved:
1. Validity of Notification No. 5/2019-Customs dated 16.02.2019.
2. Application of the increased customs duty rate to goods imported from Pakistan.
3. Retrospective application of the notification.
4. Jurisdiction and authority of the respondents to recall/review the original assessment.
5. Compliance with Section 15 and Section 17 of the Customs Act, 1962.

Detailed Analysis:

1. Validity of Notification No. 5/2019-Customs dated 16.02.2019:
The petitioners challenged the notification on the grounds that it was ultra vires the Constitution of India and the Customs Tariff Act, 1975. However, during arguments, the petitioners did not press their challenge to the vires of the notification and confined their prayer to the release of goods on payment of duty applicable at the time of filing the bill of entry, coupled with the entry of imported goods within the territory of India at the Attari Border as per Section 15 of the Customs Act, 1962.

2. Application of the increased customs duty rate to goods imported from Pakistan:
The core issue was whether the increased rate of 200% customs duty, imposed by the notification issued at 8:45 PM on 16.02.2019, could be applied to goods for which bills of entry were filed and goods had entered India before the issuance of the notification. The court held that the intent of the notification was to discourage imports from Pakistan and not to penalize Indian importers who had placed orders and imported goods relying on the policy applicable up to 16.02.2019. The petitioners had presented bills of entry on 16.02.2019 during working hours, and the goods had entered India before the notification was issued.

3. Retrospective application of the notification:
The court agreed with the petitioners that applying the notification retrospectively would amount to prohibition of imports with retrospective effect, which is not permissible. The Supreme Court in Kanak Exports had held that delegated legislation cannot be made applicable retrospectively. The court concluded that the notification could not be applied to goods for which bills of entry were filed and goods had entered India before the notification was issued/uploaded at 8:45 PM on 16.02.2019.

4. Jurisdiction and authority of the respondents to recall/review the original assessment:
The petitioners argued that the respondents' action of recalling/reviewing the original assessment was arbitrary, illegal, without jurisdiction, and unjustified. The court noted that the bills of entry were duly assessed on 16.02.2019, and the notification was not in existence at the time of presentation of the bills of entry. The court held that the event of determination of the rate of duty stood completed before the issuance of the notification, and the respondents had no authority to apply the new rate of duty retrospectively.

5. Compliance with Section 15 and Section 17 of the Customs Act, 1962:
The court examined the relevant provisions of the Customs Act, 1962, and concluded that both the presentation of the bill of entry and the arrival of goods are equally important for determining the rate of duty. In cases where bills of entry were presented on or before 16.02.2019 and goods had arrived on or before 16.02.2019, the amended rate of duty could not be applied. The court emphasized that the rate of duty applicable is as on the date of presentation of the bill of entry, and the notification issued at 8:45 PM on 16.02.2019 could not affect the rate of duty for bills of entry presented and goods arrived before that time.

Conclusion:
The court held that all the petitioners would be liable to pay duty as applicable at the time of filing the bill of entry, coupled with the fact that the imported goods had entered the territory of India on 16.02.2019 prior to the issuance of the notification. The respondents were directed to release the goods within seven days on payment of duty as declared and assessed, ignoring the impugned Notification No. 5/2019. The court's decision was aligned with the judgment of the Karnataka High Court in Param Industries Pvt. Ltd., which was upheld by the Supreme Court.

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