Case Note & Summary
The petitioners, M/s. Idori India Pvt Ltd and another, filed a writ petition challenging Public Notice No. 55/2024 dated 24 June 2024, particularly Clause 3(ii) thereof, issued by the Chief Commissioner of Customs, Jawaharlal Nehru Customs. The petitioners also sought a writ of mandamus declaring their entitlement to clear goods for home consumption under Notification No.46/2011-Customs dated 1 June 2011 and directing the respondents to assess their bills of entry (Exhibits F, G and H) finally granting the benefit of the notification, return bank guarantees, and cancel bonds. The petitioners argued that Clause 3(ii) of the public notice, which requires an importer to include an explanation for identical FOB values mentioned in the FTA-COO and the third country invoice at the time of submission of self-assessed bill of entry, conflicts with the Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between ASEAN and India) Rules, 2009. They contended that the public notice forced them to clear goods provisionally by providing bank guarantees and bonds. The respondents submitted that the clause only requires an explanation to enable them to determine compliance with the 2009 Rules and is not illegal or ultra vires. The court examined the public notice and the 2009 Rules, noting that Clause 3(ii) applies only when the INCOTERMS of the third country invoice is FOB and the FOB values are identical, which prima facie indicates that the FOB value on the FTA-COO includes value addition by the third country supplier, which is not permitted under preferential trade agreements. The court held that the clause does not militate against the 2009 Rules; it merely calls for an explanation to assist the proper officer in assessing compliance. The court found no illegality in the clause and rejected the petitioners' challenge. It also held that by challenging the public notice, the petitioners cannot seek a direction to assess the bills of entry with the benefit of the notification; the explanation furnished will be considered by the proper officer. The petition was dismissed.
Headnote
A) Customs Law - Preferential Trade Agreement - Validity of Public Notice - Clause 3(ii) of Public Notice No. 55/2024 dated 24 June 2024 requiring explanation for identical FOB values in FTA-COO and third country invoice - Held that the clause does not conflict with the Customs Tariff (Determination of Origin of Goods under ASEAN-India PTA) Rules, 2009 and is not ultra vires; it only requires an explanation to assist the proper officer in verifying compliance with the rules (Paras 15-17). B) Customs Law - Assessment of Bills of Entry - Direction to Assess - Petitioner cannot seek a direction to assess bills of entry at Exhibits F, G and H with benefit of Notification No.46/2011-Customs by challenging the public notice; the explanation furnished will be considered by the proper officer (Para 18).
Issue of Consideration
Whether Clause 3(ii) of the public notice dated 24 June 2024 is ultra vires the Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between ASEAN and India) Rules, 2009 and whether the petitioners are entitled to clearance of goods for home consumption with benefit of Notification No.46/2011-Customs without furnishing explanation for identical FOB values.
Final Decision
The petition is dismissed. The court found no illegality in Clause 3(ii) of the public notice dated 24 June 2024 and held that the requirement to furnish an explanation for identical FOB values does not infringe upon any rights of the petitioner. The court also held that the petitioner cannot seek a direction to assess the bills of entry with the benefit of the notification by challenging the public notice; the explanation furnished will be considered by the proper officer.
Law Points
- Interpretation of Clause 3(ii) of Public Notice No. 55/2024
- Consistency with Customs Tariff (Determination of Origin of Goods under ASEAN-India PTA) Rules
- 2009
- Power of proper officer to seek information under Section 28DA of Customs Act
- 1962 read with CAROTAR 2020
