2004 (7) TMI 96 - HC - Customs

Summary

Issues:
1. Entitlement to duty-free clearance of consignments under Advance License.
2. Effect of Policy Circular on the rights of the importers.
3. Acquisition of title to goods by subsequent purchaser.
4. Duty of Customs Authority in releasing goods.

Issue 1: Entitlement to duty-free clearance of consignments under Advance License

The first writ application sought the release of consignments under a duty-free scheme based on an Advance License. The petitioners imported aluminium ingots from foreign parties, claiming they were not of Indian origin. The Customs Authority refused duty-free release, citing Indian origin. The court held that the petitioners, with valid Advance Licenses, were entitled to duty-free import, rejecting Customs' reliance on a subsequent circular. The petitioners were granted release of consignments.

Issue 2: Effect of Policy Circular on the rights of the importers

The court analyzed the impact of a Policy Circular issued after the Advance Licenses were granted. The Customs Authority argued the circular affected the petitioners' rights. However, the court held that the circular could not override the substantive rights conferred by the Advance Licenses. It emphasized that the petitioners could not be denied the duty-free benefit based on a later circular.

Issue 3: Acquisition of title to goods by subsequent purchaser

The second writ application involved a subsequent purchaser seeking release of a consignment. The court found that the subsequent purchaser had acquired title to the goods by obtaining the negotiable Bill of Lading and making full payment. The court dismissed claims that the foreign exporter's liquidation affected title transfer, emphasizing the subsequent purchaser's right to the property.

Issue 4: Duty of Customs Authority in releasing goods

The court directed the Customs Authority to release the consignments to the petitioners and subsequent purchaser upon compliance with legal formalities and payment of required duties. It rejected attempts to withhold the goods based on claims from other parties and emphasized the duty of the Customs Authority to release goods upon fulfillment of legal requirements.

In conclusion, the court ruled in favor of the petitioners, affirming their entitlement to duty-free clearance under Advance Licenses and the subsequent purchaser's right to the goods. The judgment highlighted the importance of upholding substantive rights conferred by licenses and the duty of the Customs Authority to release goods in accordance with the law.