Legal principle

A Commissioner of Customs cannot, by public notice, dilute the benefits of free trade agreements or obliterate the law or CBIC circulars; instructions on such trade-agreement matters flow solely from the CBIC under Section 151A of the Customs Act, 1962.

Court decision

The Bombay High Court (Kulkarni and Sathe, JJ.) found substance in the petitioner's contentions: the impugned order dated 12.06.2024 was quashed and set aside, and the assessment proceedings of the Bills of Entry were restored to the file of the Assistant Commissioner of Customs, Group II (G), NS-I, JNCS for fresh assessment of the preferential duty claim under Notification No.46/2011 within eight weeks, with all contentions kept open. The connected petitions (WP 12430, 12470, 12432 and 12428 of 2024) were disposed of in the same terms. No costs; the claim itself was not finally allowed but remanded.

Facts

Covestro India Pvt Ltd, a manufacturer/trader in polycarbonate resins and speciality films, regularly imported goods originating in Thailand from associated enterprises (Makrofol, Bayfol, Makrolon, Bayblend) and claimed the preferential rate of duty under Notification No.46/2011 (ASEAN-India Free Trade Agreement) in its Bills of Entry at Nhava Sheva. By order dated 12.06.2024, the Assistant Commissioner rejected the preferential duty claim, finding that FOB value could not be ascertained because the invoices showed CIF values and no third-country invoice breakup was given as per JNCH Public Notice No.33/2024 dated 20.03.2024, and concluding the FTA certificates of origin were obtained through misrepresentation of actual FOB value. The petitioner filed a batch of writ petitions challenging the order and seeking declaration that Public Notices 33/2024 and 55/2024 were unconstitutional and ultra vires the Customs Act, notifications and rules.

Key provisions

• Section 28DA, Customs Act, 1962 — Procedure regarding claim of preferential rate of duty
• Rule 6, Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 — Verification request
• Rule 5, Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 — Requisition of information from the importer
• Rule 4, Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 — Origin related information to be possessed by importer
• Rule 3(2), Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 — Preferential tariff claim