2019 (11) TMI 130 - HC - Customs

Applicability of N/N. 24/2015-2020 and 25/2015-2020, dated 25th August, 2017 - applicability of notification to gold coins, imported by the petitioners - HELD THAT - It is declared that the impugned Notification Nos. 24/2015-2020, dated 25th August, 2017 and 25/2015-2020, dated 25th August, 2017, and Public Notice No. 20/2015-2020 issued by the DGFT, would not apply to the gold coins, imported by the petitioners in these writ petitions, which had left the Republic of Korea on 25th August, 2017. Inasmuch as the gold coins already stand provisionally released, no order for release thereof is required to be passed; however, the Bonds executed by the petitioner, pursuant to the order dated 14th September, 2017 of this Court, shall stand discharged. Petition allowed.

Issues Involved:
1. Applicability of Notifications Nos. 24/2015-2020 and 25/2015-2020 to the import of gold coins.
2. Determination of the effective date of the notifications.
3. Legal implications and procedural aspects of the import of gold coins from Korea.
4. Validity and enforcement of Show Cause Notices issued to the petitioners.

Issue-wise Detailed Analysis:

1. Applicability of Notifications Nos. 24/2015-2020 and 25/2015-2020 to the import of gold coins:
The disputes in these writ petitions revolve around Notifications Nos. 24/2015-2020 and 25/2015-2020, dated 25th August 2017, issued by the Directorate General of Foreign Trade (DGFT), and their applicability to gold coins imported by the petitioners. Notification No. 24 amended para 2.07 of the Foreign Trade Policy 2015-2020 (FTP 2015-20), adding a clause that restricted the import of gold, including gold coins. Notification No. 25 inserted policy condition no. 4 in Chapter 71 of the ITC(HS) 2017, making imports of gold coins classifiable under Tariff Heading 7118 "restricted."

2. Determination of the effective date of the notifications:
The petitioners argued that the gold coins imported by them could not be subjected to the rigors of the notifications because they already stood imported before the notifications came into force. It was averred that the notifications were published in the Official Gazette only on 28th August 2017. The court noted that the notifications would become enforceable only from the date of their publication in the Official Gazette. Section 8 of the Information Act, 2000, and the Office Memorandum dated 30th September 2015, clarified that the notifications were electronically published in the Official Gazette only at or after 10:47 p.m. on 28th August 2017. Therefore, the imports of the gold coins by the petitioners took place prior to the notifications becoming effective.

3. Legal implications and procedural aspects of the import of gold coins from Korea:
The Foreign Trade Policy 2015-2020 (FTP 2015-20) and the Handbook of Procedures (HBP) specified that the date of import is decided with reference to the date of shipment/dispatch of goods from the supplying country. The gold coins were dispatched from Korea on 25th August 2017, and the Bills of Entry were filed on the same day. The court noted that the imports of gold coins were accompanied by the requisite Country of Origin (COO) Certificate. Consequently, the court held that the gold coins imported by the petitioners could not be subjected to the restrictions imposed by the notifications dated 25th August 2017.

4. Validity and enforcement of Show Cause Notices issued to the petitioners:
During the pendency of the writ petitions, Show Cause Notices were issued to the petitioners by the Customs authorities on 8th September 2017, to show cause why the gold coins should not be confiscated under Section 111(d) of the Customs Act, 1962. The court observed that there was prima facie merit in the petitioners' case and permitted provisional release of the gold coins. The court quashed the Show Cause Notice issued to the petitioner in WP (C) No. 8667/2017 and directed that the Show Cause Notices issued to other petitioners be adjudicated in light of the observations and findings contained in the judgment.

Conclusion:
The court declared that the impugned Notifications Nos. 24/2015-2020 and 25/2015-2020, and Public Notice No. 20/2015-2020, would not apply to the gold coins imported by the petitioners, which had left the Republic of Korea on 25th August 2017. The Bonds executed by the petitioners were discharged, and the Show Cause Notice issued to the petitioner in WP (C) No. 8667/2017 was quashed. The writ petitions were allowed with no orders as to costs.

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