The High Court dismissed the Petition challenging Clause 3(ii) of Public Notice No. 55/2024, dated June 24, 2024, and affirmed that requiring importers to provide explanations for identical FOB values on third-country invoices and FTA-COO documents is within the legal framework of CAROTAR 2020 and the Customs Act. The judgment clarified that such a requirement does not infringe on importers' rights but assists customs officers in ensuring compliance with preferential trade rules. The court emphasized that each case is subject to specific evaluation, and the Petitioners' entitlement to benefits under preferential trade agreements must be determined based on the explanation submitted and in accordance with the law.

1. Petition Overview (Para 1-2):

   • The Petition challenges the Public Notice dated June 24, 2024 (Exhibit ‘B’), specifically Clause 3(ii), which mandates importers to provide an explanation for identical FOB values listed in both third-country invoices and FTA-COO documents.

2. Reliefs Sought by Petitioner (Para 3):

   • Petitioners seek a Writ of Mandamus to clear goods under the benefit of Notification No. 46/2011-Customs dated June 1, 2011, for home consumption without requiring bank guarantees or bonds.

3. Petitioner’s Arguments (Para 4-5):

   • Counsel for Petitioner argues that Clause 3(ii) conflicts with the Customs Tariff (Determination of Origin of Goods under the ASEAN-India Preferential Trade Agreement) Rules, 2009, and should be annulled. He argues that provisional clearance requirements, including bank guarantees, are unjust.

4. Respondent’s Defense (Para 6-7):

   • Respondent’s counsel argues that Clause 3(ii) simply ensures compliance by requiring explanations for identical FOB values, which does not contravene any statutory rules or infringe on rights.

5. Public Notice Framework (Para 9-11):

   • The Public Notice is aligned with CAROTAR 2020 and Section 28DA of the Customs Act, empowering officers to seek clarification on origin criteria when necessary. It aims to regulate verification under preferential trade agreements.

6. Clause 3(ii) Explained (Para 12-13):

   • Clause 3(ii) mandates importers to provide an explanation for identical FOB values, indicating that FOB values include third-country supplier charges, which is not permissible under preferential agreements.

7. Procedural Clarification (Para 14-16):

   • The Court holds that Clause 3(ii) is merely procedural, assisting officers in determining eligibility under preferential trade agreements. The requirement of explanation is reasonable and does not infringe on importers’ rights.

8. Petitioner’s Demands Unwarranted (Para 17-18):

   • Court notes that a blanket grant of preferential benefits for bills of entry, as sought by Petitioners, is impermissible. Compliance must be assessed individually for each transaction.

9. Conclusion and Dismissal (Para 19-20):

   • The Court dismisses the Petition, stating that Petitioners' entitlements under preferential trade agreements must be evaluated according to submitted explanations and in accordance with relevant laws and notifications.

Acts and Sections Discussed:

• Customs Act, 1962 – Section 28DA
• CAROTAR 2020 – Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020
• Notification No. 46/2011-Customs dated June 1, 2011

Ratio Decidendi:

Clause 3(ii) of the Public Notice is lawful, as it assists customs authorities in compliance verification without infringing upon importers' rights. The requirement for an explanation of identical FOB values is a legitimate procedural step, in line with CAROTAR 2020 and the Customs Act, to ensure appropriate usage of preferential trade benefits.

Subjects:

Customs Law, Preferential Trade Agreement Compliance, Import Procedures

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