2020 (11) TMI 21 - HC - Customs

High Court Rules Duty Must Match Entry Time to Protect Importers' Rights

The High Court allowed the writ petition, ruling in favor of the petitioner, and ordered the release of goods based on the duty applicable at the time of ... Import from Pakistan - Leather - ratr of duty - Validity and legality of Notification dated 16.02.2019 - Auction of detained goods - HELD THAT:- The issue decided in the case of M/S RASRASNA FOOD PVT. LTD. VERSUS THE UNION OF INDIA AND ORS. [2019 (8) TMI 1400 - PUNJAB AND HARYANA HIGH COURT] where it was held that all the Petitioners would be liable to pay duty as was applicable at the time of filing of bill of entry coupled with the fact of the imported goods having entered territory of India on 16.02.2019 prior to the issuance of the impugned notification. The petitioners would be liable to pay duty as was applicable at the time of filing/generating of bill of entry on EDI system coupled with the fact of the imported goods having entered territory of India on 16.02.2019 prior to the issuance of the impugned notification - Respondent(s) shall release goods within seven days on payment of duty as declared and assessed, if not already paid, ignoring the impugned N/N. 5/2019 - Petition allowed. Issues:Challenge to assessment order and notification enhancement of customs duty, legality of auction notice, request for re-export of goods, challenge to legality of notification dated 16.02.2019, release of goods based on duty applicable at the time of filing bill of entry.Analysis:The petitioner, a partnership firm engaged in the business of manufacturing leather goods and importing leather from Pakistan, challenged the assessment order passed on Bill of Entry No.2083797 dated 16.02.2019, which was reassessed to 200% customs duty following Notification No.05/2019. The petitioner requested the issuance of a writ in the nature of certiorari to quash the assessment order, notification, and auction notice dated 24.12.2019. The petitioner also sought a writ in the nature of Mandamus to direct respondent No.3 to issue detention memos as per the Handling of Cargo in Customs Area Regulation, 2009. The petitioner placed an order for importing 'Bovine Crust Leather' from Pakistan in February 2019, filed the Bill of Entry on 16.02.2019, but faced challenges due to the enhanced customs duty and subsequent auction notices without proper communication or permission for re-export.The High Court referred to a previous judgment by a Division Bench and the Supreme Court's decision, highlighting that the goods had entered India before the impugned notification was issued. The court emphasized that applying the enhanced duty retrospectively was impermissible. Relying on legal precedents, the court held that the petitioners were liable to pay duty as per the rate applicable at the time of filing the bill of entry, disregarding the enhanced duty under the impugned notification. The court directed the respondents to release the goods within seven days upon payment of the duty assessed at the time of filing the bill of entry, irrespective of the enhanced duty imposed post-entry.In conclusion, the court allowed the writ petition, ruling in favor of the petitioner and ordering the release of goods based on the duty applicable at the time of filing the bill of entry. The judgment emphasized the prohibition of retrospective application of duty enhancements and upheld the principle that duties should align with the conditions prevailing at the time of import entry, protecting the rights of importers in such cases.