Bombay High Court Quashes Customs Duty Reassessment Against Patanjali Foods On Crude Palm Oil Import

The Bombay High Court has quashed the customs duty reassessment against Patanjali Foods on the import of crude palm oil for home consumption.

The Bench of Justice K. R. Shriram and Justice Jitendra Jain has observed that the rate in force would be the rate that was in force on the date and time of presentation, and in Patanjali's case, since self-assessed bills of entry were already presented before the enhanced rate came into force, the rate payable would be USD 1163 PMT. The said notification enhancing duty applied only to bills of entry presented after 21:24:11 hours on May 13, 2021, and since Patanjali's four ex-bond bills of entry were presented even before 21:00 hours, the enhanced rates would not apply to Patanjali's case.

The petitioner/assessee, Patanjali, entered into four contracts with Just Oil & Grain Pte. Ltd., Singapore, for the import of 12,250 metric tons of crude palm oil of edible grade in bulk. The quantity actually supplied by the exporter was 12,127.577 MT and was covered under fourteen Bills of Lading, all dated April 24, 2021, per vessel MT Horizon V.04/21 (the said vessel). The vessel arrived at the port of Nhava Sheva.

The quantity of 12,127.577 metric tons was covered by three invoices. Petitioner had filed a warehouse bill of entry for the entire quantity of 12,127.577 MT and subsequently filed various ex-bond bills of entry, all dated May 13, 2021, under the provisions of Section 68 of the Customs Act, 1962, seeking clearance of the goods for home consumption.

A 'Tariff Value' in regard to the goods was fixed at USD 1163 per metric ton (PMT) via Notification No. 45/2021-Customs (N.T.) dated April 30, 2021, issued under Section 14(2). As noted earlier, petitioner had filed four Ex-Bond Bills of Entry under Section 68 seeking clearance of 3465.024 MT for home consumption, and in view of the tariff value having been fixed for the goods at USD 1163 PMT for duty purposes, petitioner valued the goods in the four Bills of Entry at USD 1163 PMT.

On 13th May 2021 at 21:24:11 hours, Notification No.47/2021-Customs (N.T.) dated 13th May 2021 was e-Gazetted, having been digitally signed on 13th May 2021 at 21:24:11 hours. As per the notification, the tariff value of the goods was increased from USD 1163 PMT to USD 1219 PMT.

In view of the notification, the department sought to re-assess the four Ex-Bond Bills of Entry while demanding duty on the enhanced tariff value of USD 1219 PMT.

The petitioner contended to the department that the requirements of Section 15, namely, filing an assessment of the four ex-bond bills of entry, were fulfilled before the notification was e-gazetted. Since the conditions of Section 15 were determined prior to the e-Gazette of Notification, the enhanced tariff value cannot be made applicable to the ex-bond bills of entry.

The court noted that four ex-bond bills of entry had been presented before the said notification came into force. One bill of entry was self-assessed on May 13, 2021, at 20:17:07 hours; the second was self-assessed at 20:56:11 hours; the third was self-assessed at 20:15:09 hours; and the fourth was self-assessed at 20:59:08 hours, whereas the notification was e-gazetted on May 13, 2021, at 21:24:11 hours.

The court, while quashing the reassessment orders, held that the rate of duty that will be applicable will be USD 1163 PMT, which was in force when the four Ex-Bond Bills of Entry were presented.

Counsel For Appellant: Rajesh Rawal

Counsel For Respondent: Jitendra B Mishra

Case Title: Patanjali Foods Ltd. Versus UOI

Case No.: Writ Petition No. 1816 Of 2021

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