Wednesday, March 6, 2019

Relevant date for reckoning the import of the consignments under FTP is the date of Bill of Lading and not the date of Bill of Entry

Dear friends,

As we know for determination of rate of duty and tariff for the purpose of valuation of imported goods, the date of Bill of Entry is relevant.
But for the purpose of Foreign Trade Policy, Bill of Lading date or Bill of Entry which one should be considered ?

For example, an Indian importer gives orders to overseas shipper for an item under OGL but suddenly that particular product is shifted from OGL to Prohibited/restricted then the importer will be in trouble of detention of the import cargo. Madras High Court has given a landmark judgement on on 27.02.2019 stating that Relevant date of imports for the purpose of FTP is Bill of Lading date and not BE date.

M/S. ROYAL IMPEX VERSUS THE COMMISSIONER OF CUSTOMS, THE ASSISTANT/DEPUTY COMMISSIONER OF CUSTOMS, GROUP -1

Relevant date of imports for the purpose of FTP - Whether the relevant date for the reckoning the date of the imports would be the date of Bill of Lading or Bill of Entry? - Held that:- Regulation 9.11 of the Foreign Trade Policy specifically states that for the purpose of reckoning the date of import, the relevant date would be the date of Bill of Lading only. In the light of the aforesaid the Foreign Trade Policy being a complete code by itself, reference by the learned counsels for the Revenue to section 15 of the Customs Act, which fixes the date for determination of rate of duty and tariff for the purpose of valuation of imported goods as the date of Bill of Entry, may not be relevant - the relevant date for reckoning the import of the consignments of peas is the date of Bill of Lading.

In above Madras High Court Judgement following important citation is given :
“ The Supreme Court, in the case of Union of India V. Asian Food Industries, considered the validity of exports of certain consignments of pulses. The admitted position was that the transactions for exports had been negotiated and finalised by the petitioner at a time when the exports was permitted. While this is so, the Central Government took the decision to ban export of pulses. The aforesaid decision was reported widely in the media. But the notification banning the export was issued only later in exercise of power under section 5 of the Foreign Trade (Development and Regulation Act), 1992, under which the Government prohibited export of various goods for a period of six months from the date of notification. By the time the said notification came to the knowledge of the petitioner, the consignments were under shipment, but were detained upon arrival by the customs authorities, who were of the view that the consignments were prohibited in the light of the notification issued. In the aforesaid circumstances, the Delhi High Court had expressed a view in favour of the customer. The view was affirmed by Supreme Court holding that a vested or accrued right cannot be taken away by reason of a policy”



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