2019 (11) TMI 738 - HC - Customs

Court directs customs to extend customs notification benefit, sets compliance timeline

The Court allowed the writ petition, setting aside the impugned order and directing the customs authorities to extend the benefit of Customs Notification ... Status Holder Incentive Scheme - Import from the port which was not included in the list, later included - capital goods imported against such scrips are exempted from payment of Custom duties subject to the conditions - HELD THAT:- There is no dispute to the fact that at the time of clearing the goods, the customs did not make any objection by contending that ICD - Arakkonam was not a notified port. However, subsequently, the petitioner was called upon to pay the above said duty in cash, only on the reason that ICD - Arakkonam was not a notified port for the purpose of importation of goods taking benefit under the Notification No.104/2009. In this case, it is not the contention of the Revenue that the petitioner is not entitled to get the benefit of Notification had the ICD – Arakkonam been there in the list of ports originally. In other words, but for the exclusion of ICD – Arakkonam in the original Notification, the petitioner is entitled for benefit of such exemption Notification - listing of ports in Notification No.104/2009 is not an exhaustive list and on the other hand, it is only inclusive in view of the fact that the authorities included other ports by amending the said Notification periodically. Even otherwise, as the Commissioner is empowered to grant such permission in respect of other ports as well, the submissions made by the Revenue in this aspect are not convincing. The respondent is directed to extend the benefit of Notification No.104/2009 dated 14.09.2009 to the petitioner in respect of the above said five Bills of Entry - Petition allowed. Issues Involved:1. Entitlement to benefit under Customs Notification No.104/2009 for goods cleared through ICD - Arakkonam.2. Retrospective application of the Commissioner's power to permit importation through non-notified ports.3. Compliance with the High Court's previous order directing favorable consideration of the petitioner's case.Detailed Analysis:Issue 1: Entitlement to benefit under Customs Notification No.104/2009 for goods cleared through ICD - ArakkonamThe petitioner, a public limited company engaged in manufacturing various products, imported capital goods for setting up a manufacturing facility at Tiruttani, Tamil Nadu. These goods were initially stored at Chennai seaport and then transshipped to ICD - Arakkonam. The petitioner availed the benefit of Customs Notification No.104/2009, which exempts certain capital goods from customs duties under the Status Holder Incentive Scheme (SHIS). However, the customs authorities later demanded payment of duties in cash, arguing that ICD - Arakkonam was not a notified port under the said Notification at the time of importation. The petitioner contended that the Commissioner of Customs has the power to permit importation through non-notified ports by special order, and sought retrospective application of such permission for their past imports.Issue 2: Retrospective application of the Commissioner's power to permit importation through non-notified portsThe petitioner argued that the inclusion of ICD - Arakkonam in the Notification by way of substitution (via Notification No.5/2015) should be construed as retrospective. The Revenue countered that any permission granted by the Commissioner under the Notification is prospective, not retrospective. The Court referenced a Supreme Court decision (2005 (187) ELT (162) SC) which held that amendments to notifications, intended to rectify omissions, could be applied retrospectively. The Court concluded that the Commissioner's power under the Notification to permit importation through non-notified ports should be interpreted as having retrospective effect, aligning with the principle of fairness.Issue 3: Compliance with the High Court's previous order directing favorable consideration of the petitioner's casePreviously, the High Court had remitted the matter back to the customs authorities with a specific direction to consider the five import transactions favorably. The customs authorities, however, rejected the petitioner's request again, citing the non-inclusion of ICD - Arakkonam in the original Notification. The Court noted that this rejection was contrary to its previous directive, which had not been challenged by the Revenue. The Court emphasized that the customs authorities were bound by its earlier order, which had directed favorable consideration of the petitioner's case.Conclusion:The Court allowed the writ petition, set aside the impugned order, and directed the customs authorities to extend the benefit of Notification No.104/2009 to the petitioner for the five Bills of Entry in question. The Court mandated compliance within four weeks, reinforcing the retrospective application of the Commissioner's power to permit importation through non-notified ports and adherence to its previous directive.