2016 (7) TMI 628 - HC - Customs

Import of soda ash against Duty Free Import Authorization (DFIA) Scheme - Re-validation - exemption of anti-dumping duty - Reassessment of the ex-bond Bill of Entry - goods imported under the above pending clearance at ICD Ludhiana, with the petitioner unwilling to clear the goods without being extended the benefit of the DFIA scheme and the Customs authorities and the authorities under the Directorate General of Foreign Trade (DGFT) unwilling to extend, to the petitioner, the benefit of the said Scheme. Held that - various restrictions introduced by the impugned Notification No 31 dated 01.08.2013, DGFT Circular dated 02.08.2013, Public Notice No 35 dated 30.10.2013 and DGFT Notification dated 21.08.2014, could not be made applicable to imports effected under the subject DFIAs. This would also flow from the principle of promissory estoppel, inasmuch as, at the time of issuance of the DFIAs, it was held out by the respondent to the DFIA holders as well as, consequently, to the transferees thereof, that all benefits accruing under the said DFIAs read with the then existing FTP, HOP and DGFT Circulars etc would be available thereunder. It was on the basis of this promise, as held out by the respondent, that the petitioner invested considerable amounts in purchasing the said DFIAs from the original holders thereof in the belief that import benefits available to the said DFIAs at the time of issuance thereof would not be denied to it merely by erroneously applying the restrictions which were introduced thereafter. To the said extent, therefore, the impugned Notifications, Public Notice and Circulars, insofar as they make the restrictive conditions incorporated therein applicable to all imports made thereafter, even under DFIAs issued prior thereto, cannot sustain. The Commissioner of Customs, ICD Ludhiana, is directed to allow exemption of basic customs duty in respect of the import of Soda Ash by the petitioner by debiting the DFIA licence under Bill of Entry no. 7080616 dated 16.10.2014. - The prayer for granting exemption, so far as antidumping duty is concerned, is rejected - Decided partly in favor of petitioner.

Issues Involved:
1. Quashing of Notifications, Circular, and Public Notice issued by the Ministry of Commerce.
2. Revalidation of Duty Free Import Authorizations (DFIAs).
3. Reassessment of ex-bond Bill of Entry for duty-free import under DFIA.
4. Application of restrictive conditions introduced after issuance of DFIAs.
5. Applicability of promissory estoppel.
6. Exemption from anti-dumping duty.

Detailed Analysis:

1. Quashing of Notifications, Circular, and Public Notice:
The petitioner sought the quashing of Notification No. 31 (RE:2013)/2009-14, Circular No. 3 (RE: 2013)/2009-14, Public Notice No. 35 (RE: 2013)/2009-14, and Notification No. 90 (RE: 30)/2009-14, issued by the Ministry of Commerce. The court found that these notifications and circulars substantially altered the benefits available to the petitioner under the DFIA scheme. Specifically, the court noted that the conditions introduced by these notifications were impossible to comply with for DFIAs issued on a post-export basis, as they required specifications to be inserted in shipping bills where exports had already been completed. The court held that requiring compliance with these new conditions would be an impossibility, thus violating the principle that no person could be required by law to perform the impossible (lex non cogit ad impossibilia).

2. Revalidation of Duty Free Import Authorizations (DFIAs):
The court directed the revalidation of the DFIAs dated 28/03/2012 and 13/04/2012, which were the subject matter of the present proceedings. It was noted that due to the impugned notifications and circulars, the DFIAs could not be utilized by the petitioner, and therefore, a case for revalidation was made out.

3. Reassessment of ex-bond Bill of Entry:
The petitioner sought reassessment of the ex-bond Bill of Entry for duty-free import of soda ash under the DFIA scheme. The court directed the Commissioner of Customs, ICD Ludhiana, to allow exemption of basic customs duty in respect of the import of soda ash by the petitioner by debiting the DFIA license under Bill of Entry no. 7080616 dated 16.10.2014.

4. Application of Restrictive Conditions Introduced After Issuance of DFIAs:
The court held that the various restrictions introduced by the impugned notifications could not be made applicable to imports effected under the subject DFIAs. It was emphasized that the DFIAs issued prior to 01/08/2013 could not be subjected to conditions and limitations introduced thereafter. The court noted that beneficial schemes like the DFIA Scheme should be interpreted to extend the availability of benefits rather than restrict them.

5. Applicability of Promissory Estoppel:
The court applied the doctrine of promissory estoppel, noting that at the time of issuance of the DFIAs, it was held out by the respondent that all benefits accruing under the said DFIAs read with the then existing FTP, HOP, and DGFT Circulars would be available. The petitioner had invested considerable amounts in purchasing the DFIAs based on this promise, and thus, the benefits available at the time of issuance could not be denied due to subsequent restrictions.

6. Exemption from Anti-dumping Duty:
The court rejected the prayer for granting exemption from anti-dumping duty, noting that the validity of the Customs Notifications restricting exemption from anti-dumping duty was not under challenge in this writ petition. Therefore, the exemption available to the petitioner under the DFIA would be restricted only to the basic customs duty.

Conclusion:
The court partially allowed the writ petition, striking down specific clauses of the impugned notifications and directing the revalidation of the DFIAs. It also directed the Commissioner of Customs to allow exemption of basic customs duty for the import of soda ash by the petitioner. However, the prayer for exemption from anti-dumping duty was rejected. The petition was disposed of accordingly.

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