2019 (9) TMI 248 - HC - Customs

Import Clearance Eligibility Based on Invoice Date, Not Bill of Entry Date

The Court held that the CIF value on the date of the invoice should determine eligibility for free import clearance, not the date of filing the Bill of ... Release of detained goods - prohibited goods or not - import of Black Pepper – Matured Berries - detention on the ground that CIF value was not taken on the date of filing the Bill of Entry - benefit of N/N. 53/2015-2020 dated 21.03.2018 - HELD THAT:- The N/N. 53/2016-2020 dated 21.03.2018 issued by the Minister of Commerce and Industry, Department of Commerce, Directorate General of Foreign Trade clearly indicates that Black Pepper is entitled for free import, if the cost including freight is above ₹ 500/- per kg. - Perusal of the commercial invoice filed by the Petitioner dated 07.11.2018 clearly indicates that the transaction between the Petitioner and their seller for purchasing the Black Pepper measuring 14,000 kgs took place on 07.11.2018 and the total value of the said goods was arrived as USD95,900.00. It is not in dispute that if the said amount involved in the subject matter transaction is taken into account, the CIF value as on 07.11.2018 would be ₹ 511.70/-. The value of the goods as reflected in the invoice alone will speak for considering as to whether the import is entitled to the benefit under N/N. 53/2015-2020 dated 21.03.2018. Moreover, it is not made clear in the said notification itself that as to whether such value has to be arrived only on the date of filing the Bill of Entry. In the absence of any such clear indication, the normal course of arriving at the value is by taking into consideration of the date of invoice - Therefore, if the value of CIF is taken as ₹ 511.70/- as on the date of invoice, certainly the petitioner is entitled to the benefit under the N/N. 53/2015-2020 dated 21.03.2018. Appeal dismissed - decided against Revenue. Issues:1. Interpretation of notification regarding free import eligibility based on CIF value.2. Determining the relevant date for considering CIF value in import transactions.Analysis:Issue 1: Interpretation of notification regarding free import eligibility based on CIF valueThe case involved a dispute over the entitlement of free clearance for the import of Black Pepper based on the CIF value. The Writ Court held that the import should be considered as free, allowing the release of the goods. The Writ Petitioner, an importer of spices, argued that the total cost of the Black Pepper, as per the invoice, made them eligible for free clearance. The Respondent Customs Department, however, contended that the CIF value on the date of filing the Bill of Entry was below the threshold for free clearance. The Court analyzed the relevant notifications, including No.53/2015-2020 dated 21.03.2018, which specified the conditions for free import eligibility based on CIF value. The Court concluded that the CIF value on the date of the invoice should determine eligibility, not the date of filing the Bill of Entry. As the value met the threshold on the invoice date, the Petitioner was entitled to the benefit under the notification.Issue 2: Determining the relevant date for considering CIF value in import transactionsThe key contention was whether the CIF value should be assessed based on the date of the invoice or the date of filing the Bill of Entry. The Appellant argued that the CIF value on the filing date was below the threshold, thus denying free clearance. In contrast, the Respondent/Writ Petitioner asserted that the relevant date for CIF assessment was the invoice date, citing notification No.90/2018 and the commercial invoice. The Court examined the notifications and invoices presented, emphasizing that the value on the invoice date should dictate eligibility for free import benefits. By considering the exchange rate and relevant notifications, the Court determined that the Petitioner met the criteria for free clearance based on the CIF value on the invoice date. Consequently, the Court upheld the Writ Court's decision, dismissing the Writ Appeal and closing the related petition.In conclusion, the judgment clarified the interpretation of notifications regarding free import eligibility based on CIF value and established the relevance of the invoice date for CIF assessment in import transactions, ensuring fair application of customs regulations.