No 200 pc custom duty on products before Pulwama: HC

The Punjab and Haryana High Court has ruled that goods imported from Pakistan before the Centre hiked the customs duty on them to 200 per cent after the Pulwama terror attack are not liable to attract the steep duty.

A bench of justices Jaswant Singh and Lalit Batra gave the ruling on a joint plea by 27 importers whose consignments imported from Pakistan on or before February 16, the day the Centre issued the notification, were withheld by the Customs authorities at Attari border in Amritsar.

The Customs authorities had withheld the consignments, imposing a customs duty of 200 per cent as per the provisions of the February 16 notification.

The bench also directed the Custom Department to release the withheld goods within seven days, saying that imported consignments had entered India before or on the day the Centre issued the notification with the goods' Bills of Entry already having been filed prior to the date of notification.

A total of 27 importers had moved the high court in May against the Customs authorities decision to reassess the goods imported from Pakistan on February 16 at the enhanced rate of 200 per cent of customs duty and 28 per cent of Integrated Goods and Services Tax (IGST) after the centre's notification.

Despite the imported consignments already having been assessed at the rate of five per cent rate of customs duty and 18 per cent of IGST, the Customs authorities refused to release the goods on the basis of the Bill of Entry, declaring imported goods, the importers had told the court.

The orders were placed and goods were received before the issuance of the Centre's notification, they had said in their petition.

"Having heard arguments of counsel of both sides and scrutinized the case records, we are of the opinion that the intent and purport of the impugned notification was to discourage import from Pakistan and not to penalize Indian importers,” the judges said.

“Petitioners placed import orders prior to February 16, 2019, and received goods in India on or before February 16, 2019, admittedly before the impugned notification was issued at 8.45 PM on February 16, 2019, after the working hours," said the bench.

"If the impugned notification is made applicable to them, it would amount to its retrospective application which is not permissible in law,” the bench said in its August 26 order.

Following the February 14 Pulwama terror attack in which 41 CRPF personnel had been killed, India had revoked its Most Favoured Nation status given to Pakistan and had the customs duty to 200 per cent on all goods imported from there with effect from February 16.

On the same day, goods, including dry dates imported by 27 traders from Pakistan through Attari-Wagah land route, had entered Indian territory before 6 pm and the Bills of Entry were also filed as required under the Customs Act, according to petitioners.

The court observed that the entry of goods and the presentation of Bill of Entry are equally important for the determination of the rate of duty.

“At the time of the presentation of the Bill of Entry, notification was not in existence and goods had already entered India. It means twin conditions of the presentation of the bill of entry and arrival of the vehicles stood complied with prior to the issue of the said notification," the bench said.

"The Bill of Entry was presented electronically and all customs formalities stood completed prior to 8:45 pm, meaning thereby that the event of the determination of the rate of duty stood completed,” the court observed in its 25-page order.

Giving relief to the petitioners, the bench said, "All the petitioners would be liable to pay duty as was applicable at the time of filing of the Bills of Entry coupled with the fact of the imported goods having entered the territory of India on February 16 prior to the issuance of the impugned notification."

"The Respondent shall release goods within seven days on the payment of the duty as declared and assessed,” the court ruled.