Granules India Ltd. Vs Union of India And Others (Supreme Court of India)
Supreme Court Rules Against State in Customs Duty Case; Supreme Court Rules in Favor of Granules India, Citing State’s Duty to Assist Justice; SC Rules in Favour of Importer in Acetic Anhydride Customs Duty Dispute; Exemption Applies Despite Timing of Import: SC Clarifies in Advance Licence Customs Case; Clarificatory Notification Applies Retrospectively, SC Holds in Customs Duty Case
The Supreme Court of India has set aside a High Court order, ruling in favor of Granules India Ltd. in a decades-old customs duty dispute. The company had been held liable for import duties on a chemical consignment, but the apex court found the decision to be “completely unsustainable.”
The dispute centered on the import of “Acetic Anhydride” by Granules India in 1993 under an Advance Licence Scheme, which permitted duty-free clearance. The exemption was initially withdrawn by a notification on November 25, 1993, but later clarified by another notification on March 18, 1994, which restored the exemption for importers who had obtained their licenses before the initial withdrawal.
Factual Background
Granules India imported 96 tons of the chemical under three Bills of Entry in December 1993. The company was allowed to clear the consignments without paying duty. However, customs authorities later issued a show-cause notice, demanding payment, and an order was passed on February 12, 1998, holding the company liable. The company’s subsequent appeals to the Commissioner and a writ petition in the High Court were dismissed.
