2025 (10) TMI 555 - HC - Customs

Airway bill date governs 'date of shipment' for air transport under Notification No.34/2015-20; tribunal interpretation affirmed, appeal partly allowed

The Principal Commissioner of Customs, Bengaluru. Versus Rajesh Exports Ltd.

The HC affirmed the Tribunal's interpretation of 'date of shipment' under Notification No.34/2015-20, holding that for air transport the Airway Bill date ... Date of shipment for the purpose of applying the Notification dated 18.10.2017 - gold was freely importable by the normal importer in terms of RBI Guidelines by ignoring the Notification No.34/2017 or not - applicability of provisions of Paragraph 2.17 and 9.11 of the Handbook of Procedure - import of gold is regulated and subject to conditions laid down under Paragraph 4.41 of the Foreign Trade Police 2015-20 or not - HELD THAT:- In the present case, the mode of transportation is by air. Where the transportation is by air, the relevant provision states that the date of the Airway Bill shall represent the date on which the goods left the last airport in the country from which the import is effected. Learned counsel for the Revenue reads this to mean that the date of shipment is the date on which the goods actually departed from the last airport in the country of export, i.e., 19.10.2017. According to the respondent-Assessee, however, the date of the Airway Bill itself is to be reckoned as the date of shipment, irrespective of the date on which the goods physically left the country of export. A comparison with other modes of transportation supports this interpretation - A combined reading of all modes of transport thus indicates that the relevant date of shipment/dispatch is tied to the documentary evidence issued, and not necessarily to the actual date of physical departure of the goods from the country of export. The finding recorded by the Tribunal is agreed upon. The finding recorded by the Tribunal is based on a correct interpretation of the expression 'date of shipment' as provided in Notification No. 34/2015-20, dated 18.10.2017. It is not inclined to interfere with the finding of the Tribunal on the issues. Accordingly, no substantial question of law arises for consideration before this Court. It was never an issue before the Tribunal as to whether gold was freely importable prior to the Notification dated 18.10.2017. On a reading of the order-in-original passed by the Adjudicating Authority as well as the order of the Appellate Authority, it is evident that issue did not arise from the orders impugned before the Tribunal. The finding recorded by the Tribunal on that issue is, therefore, unnecessary and avoidable. The appeal is allowed in-part. ISSUES PRESENTED AND CONSIDERED 1. Whether, for the purpose of applying Notification dated 18.10.2017, the 'date of shipment' of air consignments is the date shown on the Airway Bill or the actual date the goods physically departed the last airport in the exporting country. 2. Whether Notification dated 18.10.2017 (No.34/2015-20) imposing utilisation conditions on imported gold applied to the impugned import, given the relevant shipment/transport dates. 3. Whether the Tribunal's conclusion on whether gold was freely importable prior to Notification dated 18.10.2017 was within the scope of issues raised on appeal (i.e., whether that finding was maintainable). ISSUE-WISE DETAILED ANALYSIS - Issue 1: Date of shipment for air imports Legal framework: Paragraph 9.11 of the Handbook of Procedure prescribes mode-wise rules for 'date of shipment/dispatch': for air consignments the rule states the 'Date of relevant Airway Bill provided this represents date on which goods left last airport in the country from which the import is effected.' Precedent Treatment: No prior judicial precedent is invoked in the judgment; the Tribunal's interpretation is approved by the Court without reference to conflicting authority. Interpretation and reasoning: The provision must be read in context with rules for other modes (sea, post, courier, multimodal) where documentary dates (bill of lading, date stamp, waybill, combined transport bill) are treated as determinative. A harmonious construction shows the 'date of shipment' is tied to the documentary evidence (Airway Bill) rather than requiring proof of the physical moment goods left the exporting airport. The phrase 'provided this represents date on which goods left' qualifies the Airway Bill's evidentiary role but does not convert the rule into a factual inquiry always requiring proof of physical departure date; documentary date is the primary determinator unless documentary date clearly does not represent shipment. Ratio vs. Obiter: Ratio - the Court affirms that, for air imports, the date on the Airway Bill is the date of shipment for application of notifications, subject to the qualification that the Airway Bill should represent the date of physical departure; the Tribunal's reliance on Airway Bill date is a correct interpretation of Paragraph 9.11. Conclusion: The Tribunal correctly reckoned the date of shipment as the date on the Airway Bill (17.10.2017) for the impugned import; therefore Notification dated 18.10.2017 did not apply to that import. ISSUE-WISE DETAILED ANALYSIS - Issue 2: Applicability of Notification dated 18.10.2017 imposing utilisation conditions Legal framework: Applicability of Notification dated 18.10.2017 hinges on whether the date of shipment falls before or after its coming into effect; if date of shipment precedes the notification, the utilisation condition does not attach to that import. Precedent Treatment: No precedent distinguished or followed; decision rests on statutory/administrative instrument interpretation and application of Paragraph 9.11. Interpretation and reasoning: Applying the settled interpretation of Paragraph 9.11 (see Issue 1), the Airway Bill dated 17.10.2017 is the operative shipment date; since the notification became effective on 18.10.2017, imports shipped (per Airway Bill date) before that date are not governed by the new utilisation condition. The Court rejects the Revenue's submission that actual physical departure (19.10.2017) should determine applicability where the documentary date precedes the notification; to do so would create inconsistency with the mode-wise documentary rules and impose an unwarranted factual overlay contrary to the scheme. Ratio vs. Obiter: Ratio - notification's conditions do not apply where the documentary shipment date (Airway Bill) precedes notification effective date; the Tribunal's decision upholding non-applicability is affirmed. Conclusion: Notification dated 18.10.2017 was not applicable to the impugned import because the date of shipment, as evidenced by the Airway Bill, predated the notification's effective date. ISSUE-WISE DETAILED ANALYSIS - Issue 3: Validity of Tribunal's finding on whether gold was freely importable prior to 18.10.2017 Legal framework: Appellate tribunals are confined to the scope of issues arising from the orders under challenge; findings rendered on matters not arising from the impugned orders are unnecessary and may be struck down as dehors the controversy before the tribunal. Precedent Treatment: No authority cited; the Court applies ordinary appellate scope principles. Interpretation and reasoning: The Tribunal addressed three questions, two of which (shipment date and applicability of Notification) arose from the impugned orders and were properly decided. The Tribunal also opined on whether gold was freely importable prior to 18.10.2017 - a matter not raised by or necessary to decide the appeals before it. The Court finds that this third finding did not arise from the orders under challenge and therefore was unnecessary and avoidable. Ratio vs. Obiter: Ratio - the Tribunal's extraneous finding on freeness of import prior to notification is not sustainable and is to be set aside; this is a binding conclusion in the present appeal. The Court's remittal/setting aside of that particular finding is dispositive of that point rather than mere obiter. Conclusion: The Tribunal's finding that gold was freely importable prior to 18.10.2017 is set aside as unnecessary and beyond the issues arising from the impugned orders; issues properly before the Tribunal were correctly decided. OVERALL CONCLUSIONS 1. The Tribunal correctly interpreted Paragraph 9.11 to treat the date on the Airway Bill as the date of shipment for air imports, subject to the Airway Bill representing the date goods left the last airport. 2. Applying that interpretation, Notification dated 18.10.2017 imposing utilisation conditions did not apply to the impugned import whose Airway Bill was dated 17.10.2017. 3. The Tribunal's extraneous finding on freeness of import prior to 18.10.2017 is unnecessary to the controversy and is set aside; the Tribunal's decisions on shipment date and notification applicability are affirmed and no substantial question of law arises for further consideration.