2019 (2) TMI 694 - HC - Customs

Import of Prohibited goods or not - basis of determination - Import of Black Pepper - N/N. 53/2015-2020 dated 21.03.2018 - prayer to release the goods - Held that - N/N. 53/2015-2020 dated 21.03.2018 issued by the DGFT lays down the policy as to whether import of a certain item is free or prohibited. This obviously cannot be decided after the goods land in India. In the very nature of things, there must be certainty in these transactions. Therefore, the position that prevails on the date of raising of invoice alone will be the basis for determination. The issue as to whether import is free or prohibited will have to be necessarily decided based on the situation prevailing on the date of placing of the order or raising of invoice. Due to exchange rate fluctuation, CIF value had fallen below to ₹ 500/- per kg in this case. But, in invoice, CIF was above ₹ 500/- per kg - therefore, the import must be considered as free in this case. The respondents are directed to assess the Bill of Entry and allow the release of goods in question, after following the usual formalities - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Interpretation of import policy regarding Black Pepper.
2. Application of Customs Act and rounding off of duty.
3. Determination of CIF value for import clearance.

Analysis:
1. The petitioner, an importer of spices, faced issues with the clearance of Black Pepper imported from Sri Lanka due to the respondents' belief that the import was prohibited under Notification No. 53/2015-2020. The petitioner argued that the CIF value should be rounded off to ?500 per kg as per Section 154 A of the Customs Act. However, the court noted that even with rounding off, the prohibition under the notification would still apply if the CIF value was below ?500 per kg.

2. The court further deliberated on the significance of the CIF value determination date. The petitioner contended that the CIF value on the date of the commercial invoice should govern the import clearance, not the value on the date of filing the Bill of Entry. The court agreed with this argument, emphasizing the need for certainty in import transactions and ruled that the CIF value at the time of raising the invoice should be the basis for determining import status.

3. Despite the CIF value falling below ?500 per kg due to exchange rate fluctuations by the time of filing the Bill of Entry, the court held that since the CIF value was above ?500 per kg on the invoice date, the import should be considered free. Consequently, the respondents were directed to assess the Bill of Entry and release the goods accordingly, following standard procedures. The court allowed the writ petition without costs, resolving the import clearance issue in favor of the petitioner.