Court Strikes Down Customs Circular Limiting Amendments, Deems It Unconstitutional and Beyond Legal Authority.

The HC invalidated para 3(a) of Circular No. 36/2010-Customs, declaring it ultra vires Section 149 of the Customs Act, 1962, and unconstitutional under Article 14. The Circular's three-month amendment limit was deemed unlawful, leading to the annulment of the rejection letter dated 29.12.2021. The Respondent must process the Petitioners' application for shipping bill conversion, adhering to other legal requirements. Rule was made absolute without costs.

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Issues Involved:
1. Validity of Circular No. 36/2010-Customs in relation to Section 149 of the Customs Act, 1962.
2. Legality of the rejection of the Petitioners' application for amendment of shipping bills.
3. The impact of the amendment to Section 149 by the Finance Act, 2019 on the validity of Circular No. 36/2010.

Summary:

Validity of Circular No. 36/2010-Customs:
The Petitioners challenged para 3(a) of Circular No. 36/2010-Customs dated 23.09.2010 as ultra vires Section 149 of the Customs Act, 1962, and Articles 14 and 19(1)(g) of the Constitution of India. The Court observed that prior to the amendment of Section 149 by the Finance Act, 2019, the Central Government had no authority to prescribe any time-frame or conditions for amending documents. Therefore, the Circular prescribing a three-month time limit was deemed contrary and ultra vires of Section 149. The Court relied on the decision in Pinnacle Life Science Pvt. Ltd. vs. Union of India, which held that the Circular could not prescribe a time limit when no such time was prescribed by the statute.

Legality of Rejection of Petitioners' Application:
The Assistant Commissioner of Customs rejected the Petitioners' request for amendment of shipping bills based on the impugned Circular, stating that the request was time-barred as it was not made within three months from the date of the Let Export Order. The Court found this rejection to be illegal, as the Circular itself was invalid. The decision of the Gujarat High Court in M/s. Mahalaxmi Rubitech Ltd. supported this view, holding that the Circular was ultra vires of Article 14 of the Constitution and Section 149 of the Customs Act.

Impact of Amendment to Section 149 by Finance Act, 2019:
The Respondent argued that the amendment to Section 149 by the Finance Act, 2019, which allowed the Central Government to prescribe time limits and conditions, validated the Circular. However, the Court rejected this argument, stating that the Circular issued before the amendment could not be retrospectively validated. Moreover, the Circular did not qualify as "regulations" under Section 157 of the Customs Act. Therefore, the amended Section 149 could not confer validity on the pre-existing Circular.

Conclusion:
The Court allowed the petition, striking down para 3(a) of Circular No. 36/2010-Customs as ultra vires and quashing the letter dated 29.12.2021 rejecting the Petitioners' application. The Respondent was directed to accept the Petitioners' application for conversion of shipping bills, subject to other legal compliances. Rule was made absolute with no costs.

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