Case Law Details
Ajanta Soya Ltd Vs Union of India & Ors. (Delhi High Court)
AIDC exemption eligible on soyabean oil import under TRQ upto 30.06.2023 if if goods landed before 30.06.2023 despite the facts that Bills of Lading are dated on or before 31.03.2023
The Delhi High Court recently adjudicated on a matter concerning Ajanta Soya Ltd versus Union of India & Ors., addressing a dispute surrounding the Agricultural Infrastructure Development Cess (AIDC) exemption and the Tariff Rate Quota (TRQ) for the import of crude soyabean oil. The case sheds light on the intricacies of import regulations, timelines, and the implications for stakeholders involved.
The crux of the matter revolved around the interpretation and application of various notifications and public notices issued by relevant government authorities. Ajanta Soya Ltd, the petitioner, contested the imposition of AIDC and the denial of TRQ exemption for its imports of crude soyabean oil. The company argued that its imports should be eligible for exemption under TRQ, as per the notifications issued by the Directorate General of Foreign Trade (DGFT) and the Ministry of Finance, Department of Revenue.
The sequence of events leading to the dispute is crucial for understanding the court’s decision. Initially, the DGFT issued a public notice allocating TRQ for the import of crude soyabean oil, valid for the financial years 2022-2023 and 2023-2024. This notice was accompanied by an exemption notification from customs duty and AIDC for goods falling under the TRQ.
However, a subsequent public notice by the DGFT announced the discontinuation of TRQ for crude soyabean oil imports from April 1, 2023. Importantly, this notice stated that consignments with Bills of Lading dated on or before March 31, 2023, would be permitted for imports under the TRQ until June 30, 2023.
The crux of the issue arose from a notification issued by the Ministry of Finance, Department of Revenue, on March 3, 2023 (Notification No.15/2023). Contrary to the DGFT’s public notice, this notification restricted the TRQ benefit only to consignments with Bills of Lading dated on or before March 31, 2023, without extending the timeline for imports until June 30, 2023. This discrepancy led to confusion regarding the eligibility of imports for TRQ exemption beyond March 31, 2023.
Ajanta Soya Ltd and other petitioners approached the Delhi High Court seeking clarity and relief from the alleged wrongful imposition of AIDC and customs duty on their imports. The petitioners argued that their imports, with Bills of Lading dated on or before March 31, 2023, but landing at ports later, should still qualify for TRQ exemption until June 30, 2023, as per the DGFT’s public notice.
The Union of India, in its counter-affidavit, referred to a subsequent notification dated May 10, 2023, which extended the TRQ benefit until June 30, 2023, aligning with the DGFT’s public notice. This clarification by the government was pivotal in resolving the ambiguity surrounding the timeline for TRQ eligibility.
In its judgment, the Delhi High Court disposed of the petitions, holding that imports with Bills of Lading dated on or before March 31, 2023, would be covered under the TRQ policy if the goods had landed before June 30, 2023. The court emphasized that the benefit under TRQ had indeed been extended until June 30, 2023, as per the subsequent notification issued by the government.
Consequently, the court directed that petitioners be granted the relief of refund of duty, if any, paid on their imports, subject to compliance with necessary legal formalities.
This judgment serves as a clarion call for precision and coherence in government notifications and regulations, especially concerning trade and import policies. It underscores the importance of clarity and consistency in administrative directives to avoid confusion and legal disputes among stakeholders.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. In W.P. (C) 5510/2023, petitioner impugns Notification No.15/2023 dated 03.03.2023. Petitioner further sought issuance of appropriate Notification for clearance of imports of Tariff Rate Quota (TRQ) consignment in line with Public Notice dated 01.03.2023.
2. In W.P. (C) 3018/2024, petitioner in addition seeks that the Notification dated 10.05.2023, issued by the Custom Authorities be made applicable retrospectively with effect from 01.04.2023.
3. As per the petitioners, they are aggrieved by illegal imposition of Agricultural Infrastructure Development Cess (AIDC) and denial of exemption benefit under TRQ for import of crude soyabean oil.
4. As per the petitioners, the Director General of Foreign Trade issued a Public Notice dated 24.05 .2022 to allocate TRQ for import of crude soyabean oil and crude sunflower seed oil during the Financial Years 2022-2023 and 2023-2024 upto 20,00,000 metric ton per year for each of these commodities.
5. Correspondingly, on the same date the Ministry of Finance, Department of Revenue issued an exemption Notification dated 24.05.202 for granting exemption from custom duty and AIDC to the goods covered under TRQ. Subsequently, by Public Notice dated 11.01.2023, the Director General of Foreign Trade decided to discontinue the TRQ for import of crude soyabean oil with effect from 01.04.2023. The Public Notice provided that Bill of Lading dated on or before 31.03.2023 shall be allowed for imports under crude soyabean oil TRQ till 30.06.2023. However, the consequential Notification No.15/2023-Customs dated 03.03.2023, issued by the Ministry of Finance, Department of Revenue did not extend the benefit to the Bills of Lading dated on or before 31.03.2023 till 30.06.2023 and restricted the same to 31.03.2023 with the result that consignments covered under the Bills of Lading which were dated on or before 31.03.2023, but were landing at the ports later, even up till 30.06.2023 were not covered under the exemption and accordingly, the AIDC and custom duty was payable on them.
6. Faced with this discrepancy, petitioners have approached this We are informed that in the meantime some of the consignments which had landed after the said dates were got cleared under protest on payment of duty. Petitioners are also claiming refund of the duty paid on said consignments.
7. Counter affidavit has been filed by the Union of India in W.P. (C) 5510/2023, wherein reference is drawn to Notification issued by the Department of Revenue dated 10.05.2023, extending the benefit under TRQ till 30.06.2023. By Public Notification dated 11.01.2023, the TRQ was discontinued with effect from 01.04.2023, however, by the Notification dated 10.05.2023, the same has been made co-terminus with the Public Notice issued by the DGFT dated 11.01.2023, which extends the benefit upto 30.06.2023. Accordingly, as per the counter-affidavit, benefit under TRQ stands extended till 30.06.2023.
8. In view thereof, petitions are disposed of holding that the benefit under TRQ being extended till 30.06.2023, the imports made in terms of the extant policy where the Bills of Lading are dated on or before 31.03.2023, would be covered under the said policy if the goods had landed before 30.06.2023.
9. Consequently, the consequential relief of refund of duty if any paid by the petitioners be also granted in accordance with law, subject to petitioners making the necessary compliances in law.
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