Bombay High Court directs Customs Authority to allow Clearance of Pigeon Peas as there was Valid Registration of Advance Payment Certificate [Read Order]

The Bombay High Court directed the Custom Authority to allow clearance of Pigeon Peas as there was valid registration of Advance Payment Certificate.

The petitioner, Rika Global Impex Limited is a company incorporated under the Companies Act, 2013 and engaged in the business of import and export of agricultural commodities. Petitioner is a regular importer and exporter of agricultural produce including Pigeon Peas (Toor) from Sudan, Myanmar, Tanzania and Mozambique. Petitioner has been allotted import or export code and accorded status of ‘Star Trading House’ by the DGFT.

In the ordinary course of business petitioner had entered into a contract with Agricom International General Trading LLC (foreign supplier) for purchase of Pigeon Peas; the contract was mutually amended from time to time vide 8 addendums whereby some terms of the contract were amended and shipment period was extended. Petitioner notified the addendums to the office of respondent i.e. the Additional Director General of Foreign Trade, Mumbai. Petitioner’s contract for import of Pigeon Peas is under the provisions of the FTP, validity of which now stands extended till March 31, 2021.

By notifcation dated August 5, 2017, DGFT amended the import policy of certain items under Chapter 7 of the ITC (HS) 2017, whereby, import of Pigeon Peas was revised from ‘free’ to ‘restricted’ category stating that import shall be subject to an annual fiscal quota of 2 lakh MT.

By trade notice dated August 11, 2017 it was clarified that though 2 lakh MT was already imported during the said current fiscal year, import of Pigeon Peas in respect of which irrevocable letters of credit were opened prior to August 5, 2017 and subsequently registered with the jurisdictional Regional Authority as per provisions of the FTP was permitted. By another trade notice dated August 31, 2017, DGFT provided further relaxation allowing registration of contracts for import of Pigeon Peas wherein advance payment had been made (full or in part) prior to August 5, 2017 and for which a contract or purchase invoice and payment details certified by the concerned bank were available.

DGFT issued 5 RCs to the petitioner against the trade notice dated 31.08.2017. Petitioner imported Pigeon Peas against 4 RCs to the extent of 11000 MTs by 2018. Import against the 5th RC in respect of balance 11000 MTs was to be completed between 2018 to 2020.

The petitioner entered into correspondence with the respondents seeking clarifcation on the validity of its RC but received no reply. By letter petitioner requested Deputy Commissioner of Customs (Import) to permit the petitioner to convert the bills of entry from home consumption to warehousing so as to enable the petitioner to transfer the goods to the actual warehouse who was the license holder in order to stop further losses being suffered by the petitioner due to non-clearance of the goods and due to its perishable nature. Petitioner also addressed an online complaint on November 12, 2020 to the Grievance Redressal Committee of the FTP.

The division bench of Justices Ujjal Bhuyan and Milind N Jadhav directed the respondents to allow clearance of the balance 8350 MT of Pigeon Peas if imported by the petitioner for home consumption under the RC within a period of 6 weeks.

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