New Delhi: The Supreme Court on Wednesday came to the rescue of certain traders who were asked to pay enhanced custom duty of 200 per cent on imported goods from Pakistan due to sudden increase in the tariff by the Centre following the 2019 Pulwama terror attack and ordered that they will have to pay the duty under the older tariff. The top court dismissed the appeal of the Centre against a Punjab and Haryana High Court judgement holding that it cannot levy enhanced custom duty from importers who had already presented bills of entry for home consumption before the enhanced rate was notified’ in e-Gazette.
As many as 40 Central Reserves Police Force (CRPF) personnel were killed on February 14, 2019 in an audacious terror strike at Pulwama in Jammu and Kashmir. AJaish-e-Mohammed (JeM) terrorist had rammed an explosives-laden vehicle into a bus carrying the security personnel. Two days after the terror strike, the central government on February 16, last year had issued a notification under Section 8A of the Customs Tariff Act, 1975 and introduced a tariff entry by which all goods originating in or exported from the Islamic Republic of Pakistan were subjected to an enhanced customs duty of 200 per cent.
The notification allegedly led to huge financial burden to some exporters, who had already exported goods under the old custom rates, and had to get their imported goods re-assessed for the purposes of levy of custom duty at enhanced rate. The consignments of import covered a diverse range of goods, ranging from dry dates to cement. The government’s notification was uploaded on the e-Gazette at around 8.46 PM on February 16, 2019 and the customs authorities at the land customs station at Attari in Punjab sought to enforce the enhanced rate of duty on importers who had already presented bills of entry for home consumption before the enhanced rate was notified in the e-Gazette and this led to filing of cases by traders in the Punjab and Haryana High Court, the apex court noted in its judgement.
The High Court, on August 26, 2019, had allowed the pleas of traders and had held that since the importers, who had imported goods from Pakistan, had presented their bills of entry and completed the process of ‘self-assessment’ before the notification enhancing the rate of duty to 200 per cent was issued and uploaded, the enhanced rate of duty was not attracted. The High Court had also held that the importers were liable to pay the duty applicable at the time when the bills of entry for home consumption were filed under Section 46 of the Customs Act and had ordered the Centre to release the goods within seven days on the payment of duty ‘as declared and assessed’ without applying the notification enhancing the rate of duty on goods originating in Pakistan.
The Centre came in appeal against the High Court’s order which was dismissed by a bench comprising Justices D Y Chandrachud, Indu Malhotra and K M Joseph in two separate and concurring verdicts. Justice Chandrachud, writing the judgement for himself and Justice Malhotra, referred to various provisions of the Constitution and the Customs Tariff Act and held that the importers who had already got their imported goods self-assessed for the levy of customs duty cannot be asked to pay the higher duty.
The rate of duty was determined by the presentation of the bills of entry for home consumption in the electronic form under Section 46. Self-assessment was on the basis of rate of duty which was in force on the date and at the time of presentation of the bills of entry for home consumption. This could not have been altered in the purported exercise of the power of reassessment under Section 17 or at the time of the clearance of the goods for home consumption under Section 47. The rate of duty which was applicable was crystallized at the time and on the date of the presentation of the bills of entry in terms of the provisions of Section 15 , Justice Chandrachud, who wrote 82-page judgement, said.
Justice Joseph wrote a separate and concurring 94-page judgement in the case and dismissed the appeals against the High Court’s order.
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