Case Title: The Additional Commissioner of Customs Versus M/s.N.C.Alexander
Case No: W.A.No.2626 of 2023 and C.M.P.No.22137 of 2023
Decided on: 18 October, 2023
CORAM: THE HON’BLE MR. JUSTICE R. MAHADEVAN AND THE HON’BLE MR. JUSTICE MOHAMMED SHAFFIQ
Introduction
The Madras High Court issued an order for the customs department to release the New Zealand-imported fresh apples, subject to the furnishing of bank guarantees to account for the differential duty.
Facts of the Case
In the present case, the respondent imported “fresh apples” under Bill of Entry No. 6592170, dated 26.06.2023, that came from New Zealand. The appellant representing the department classified the imported apples into two groups based on their CIF prices: those that are priced above Rs. 50 per kg and those that are priced below Rs. 50 per kg. As per the May 8, 2023, DGFT Notification No. 5 of 2023, fresh apple imports are considered “prohibited” if their CIF value is less than Rs. 50 per kg. Based on the notification, the relevant authorities issued an order seizing fresh apples valued at less than Rs. 50 per kg and valued them at Rs. 18,61,610.02 in accordance with Section 111(d) of the Customs Act, 1962.
The respondent invoked Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 to obtain detention certificates for the remission of demurrage and container detention charges, as well as the release of the imported products. The judge granted the appellant an interim directive that permitted the evaluation and release of the items considering the stay order imposed by the Kerala High Court and the Madras High Court against DGFT Notification No. 5/2023, dated May 8, 2023.
The assessee contended that two High Courts have stayed the notification that forbade the import of fresh apples valued at less than Rs. 50 per kg CIF. They contended that when a notification is stopped by a High Court, the stay order’s effects are felt throughout India and extend beyond the boundaries of that High Court.
The appellant claims that on May 8, 2023, Notification No. 5/2023 forbade the import of fresh apples whose CIF value was less than Rs. 50 per kg. They contend that the respondent imported the products in breach of the notification even though they were well aware of this prohibition. The appellant highlighted the stay order issued by the Kerala High Court only went into effect on July 11, 2023, and that the notification was in effect as of the Bill of Entry date.
Courts analysis and decision
The court ordered the appellant to release the subject items, after receiving a bank guarantee from the respondent for Rs. 2,25,000 towards differential duty. It was stated unequivocally by the court that the purpose of this interim agreement is to protect the interests of both parties, and the respondent’s bank guarantee is preserved until a determination is made about the legality of notification no. 5/2023, dated May 8, 2023.
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Written by- Rupika Goundla
