The Gujarat High Court dismissed the plea seeking to quash notification prescribing the Minimum Import Price.
The petitioner, Pam Agro Industries, has been engaged in trading various commodities for the last seven years and has been importing broken cashew kernels for the trading of such commodities in the local market.
In the course of business, the petitioners entered into contracts with two Vietnam-based suppliers i.e. M/s. Gotec Commodities (Vietnam) Co. Ltd and M/s. Thien Ma Production Trading Import Export Co. Ltd. for purchasing broken cashew kernels from them and regular sale/purchase contracts have been made by the petitioners incorporating the commercial details and terms like the grade of the commodity, quantity, unit price, shipment time, etc.
As per the contracts the suppliers have sold and supplied BB grade broken cashew kernels and commercial invoices have been issued for each of the consignments so sold by them. For the said purpose, the price agreed between the parties for the commodity in question has been ranging between 2.10 USD per Kg to 2.50 USD per Kg and the petitioners have actually paid this price only to the above-referred suppliers. The price invoiced by the suppliers and paid by the petitioners has thus been the transaction value for the imported goods.
As the officers of the respondent authority insisted on payment of customs duties on two consignments of broken cashew kernel imported by the petitioners in June 2019 in view of notification no. 53 dated 2.12.2013 issued by the DGFT, the petitioners had to agree to pay customs duties for two consignments on the basis of MIP of Rs.288 per Kg for two bills of entry filed on 15.06.2019 and 19.06.2019 as these consignments were not assessed at the transaction value and the petitioners accordingly paid customs duties aggregating to Rs.29,47,660/- for these two consignments.
Since these two consignments were not being cleared by assessing duties on transaction value and the petitioners were suffering on account of go-down charges etc; a letter dated 1.07.2019 was submitted by the petitioners requesting the respondent authority for clearance of these goods on MIP and therefore duties were assessed and recovered from the petitioners on MIP and not the transaction value.
The petitioner has preferred the petition for examination of validity and legality of Notification No. 53 dated 2.12.2013 issued under section 5 of the Foreign Trade Act as the same being ultra vires to section 5 of the Foreign Trade Act and also section 14 of the Customs Act.
The division bench of Justice J.B.Pardiwala and Bhargav D.Karia held that in view of the provisions of the Customs Act and Foreign Trade Act, a notification issued by the DGFT is to be considered as the notification issued by the Central Government which is binding upon the petitioners as the same is issued in exercise of powers vested in the Central Government under section 3(2) of the Foreign Trade Act.
“The impugned notification cannot be held to be ultra vires to the provisions of the Customs Act or the provisions of the Foreign Trade Act, or Article 14 of the Constitution of India as the same is issued by the Central Government under the powers conferred by the provisions of section 3(2) and section 5 of the Foreign Trade Act,” the court while dismissing the petition said.
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