Commissioner of Customs (Preventive) Vs Indian Oil Corporation Ltd (Madras High Court)
In a recent judgment, the Madras High Court dismissed an appeal filed by the Commissioner of Customs against Indian Oil Corporation Ltd (IOCL), upholding a decision by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The case centered on the rejection of IOCL’s request to convert 104 shipping bills from the Advance Authorisation Scheme to the Draw Back Scheme. The original rejection by the Commissioner of Customs on December 19, 2013, was based on the grounds that IOCL’s application, made on June 26, 2011, fell outside the three-month time limit prescribed by Para 3(a) of Customs Circular No. 36/2010.
The High Court’s decision heavily relied on a precedent set by the Gujarat High Court in the Mahalakshmi Rubtech Ltd case. In that ruling, the Gujarat High Court had declared Para 3(a) of the circular, which imposes the three-month deadline, as unconstitutional and ultra vires Section 149 of the Customs Act, 1962. It reasoned that since the parent statute, Section 149, does not prescribe any time limit for such conversions, a circular issued by the Central Board of Excise and Customs (CBEC) cannot impose one. The Madras High Court noted that the Supreme Court had not interfered with the Gujarat High Court’s judgment.
