Change in customs duty imposed on imported products would come into force only from the date of notification issued by the Customs department and not from the date of publication of the annual Foreign Trade Policy by the Centre, the Madras High Court Bench here has ruled.
Justice S. Nagamuthu also held that the customs duty prevailing at the time of presenting the Bills of Entry to the customs officials concerned, and not at the time of taking delivery of the imported cargo from the warehouse, would be applicable in respect of imports meant for domestic consumption.
The judgement was passed while dismissing a writ petition filed by a textile mills from Erode seeking a direction to the Commissioner of Customs at Tuticorin port to levy customs duty at the rate of 3 per cent and not 5 per cent of the value of two rotor spinning machines imported from Germany.
The machines reached Tuticorin port on April 8, 2008 and the Bills of Entry were presented two days later. On April 11, 2008, the Government announced a new Foreign Trade Policy with effect from April 1 reducing the duty payable under the Export Promotion Capital Goods (EPCG) scheme from 5 to 3 per cent.
In pursuance of the new trade policy, the Joint Director General of Foreign Trade at Coimbatore made necessary amendment in the petitioner company’s EPCG licence on April 21, 2008 stating that it was sufficient to pay customs duty at the rate of 3 per cent of the value of the imported machines.
However, the Assistant Commissioner (Imports), Office of the Commissioner of Customs, Tuticorin, insisted on payment of duty at the rate of five per cent on the ground that the reduction in duty would come into effect only from May 9, 2008, the date on which a Customs notification was issued.