2022 (8) TMI 664 - HC - Customs

Determination of rate of duty for (imported) goods entered for home consumption - 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 - retrospective effect of notification or not - validity of 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 - HELD THAT - 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, not only the date on which the bills of entry in respect of the goods is presented is the only criteria rather the time of presenting the bill of entry on the said date is also an essential criteria for determination of rate of duty on the goods in question. Action of the respondents customs authority concerned charging at 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 egazetted 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 is not justifiable in law since 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. The action of the respondents customs authority 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 not sustainable in law - the respondents/authorities concerned are directed to refund to the petitioners the excess duty amounting to Rs. 96,60,467/- which was collected by the respondent customs authority on the basis of the aforesaid impugned Notification No. 103/2020-Customs (N.T.) dated 29th October, 2020 at a higher tariff value, within a period of 8 weeks from the date of communication of this order. Petitioner will be at liberty to claim for interest on the aforesaid amount to be refunded in accordance with law. Petition disposed off.

Issues Involved:
1. Determination of the rate of duty and valuation of imported goods as per Section 15 of the Customs Act, 1962.
2. Legality of charging enhanced rate of duty based on Notification No. 103/2020-Customs (N.T.) dated 29.10.2020.
3. Retrospective application of the enhanced duty rate and its legality.

Issue-wise Detailed Analysis:

1. Determination of the rate of duty and valuation of imported goods as per Section 15 of the Customs Act, 1962:
The court examined whether the date or the specific time of presenting the bill of entry is crucial for determining the rate of duty. It was held that both the date and the time of presenting the bill of entry are essential criteria for determining the rate of duty. The court emphasized that Section 15 of the Customs Act specifies that the rate of duty applicable is the one in force on the date of presentation of the bill of entry. However, the exact time on that date also plays a critical role, especially in the context of electronic notifications and digital signatures.

2. Legality of charging enhanced rate of duty based on Notification No. 103/2020-Customs (N.T.) dated 29.10.2020:
The court found that the action of the customs authorities in charging the enhanced rate of duty based on the impugned notification was not legally justified. The notification was e-gazetted and digitally signed on 29.10.2020 at 23:18:25 hrs, whereas the bills of entry were already self-assessed on 23.10.2020 and 26.10.2020 at the prevailing rate of duty. Additionally, the entry inward was granted to the vessel carrying the goods on 29.10.2020 at 11:00 hrs, which was before the notification came into effect.

3. Retrospective application of the enhanced duty rate and its legality:
The court held that the retrospective application of the enhanced duty rate was arbitrary, illegal, and not sustainable in law. It referred to the Supreme Court's judgment in Union of India & Ors. vs. G.S. Chatha Rice Mills & Anr., which emphasized that notifications enhancing duty rates cannot operate retrospectively unless explicitly authorized by statute. The court concluded that the customs authorities' action of applying the enhanced rate retrospectively was contrary to the provisions of Section 15 read with Section 46 of the Customs Act, 1962.

Conclusion:
The court allowed the writ petition, directing the respondents to refund the excess duty amounting to Rs. 96,60,467/- collected based on the impugned notification within eight weeks. The petitioner was also given the liberty to claim interest on the refunded amount in accordance with the law. The writ petition was disposed of with no order as to costs.

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