Delhi HC Grants TRQ Exemption to Importer of Crude Soyabean Oil, Directs Refund of ₹24 Lakh Customs Duty Paid During Policy Gap Period [Read Order]

In a recent ruling, the Delhi High Court held that an importer of crude soyabean oil was entitled to Tariff Rate Quota (TRQ) exemption where the Bill of Lading was issued within the protected period, and directed the customs authorities to refund customs duty of about Rs. 24 lakh that had been collected during a gap period created due to subsequent notifications.

Pitamber Solvex Private Limited, the petitioner, filed a writ petition under Article 226 of the Constitution seeking extension of TRQ benefits for crude soyabean oil imported during the financial year 2022-23 and refund of customs duty amounting to Rs. 24,03,057 paid under protest.

The petitioner was granted a TRQ licence in accordance with Notification No. 30/2022-Customs dated 24 May 2022, which exempted imports under TRQ from customs duty. Later, a public notice dated 11 January 2023 discontinued TRQ benefits with effect from 1 April 2023 but allowed continued benefit where the Bill of Lading was dated on or before 31 March 2023.

The petitioner’s Bill of Lading was dated 8 February 2023, though the goods arrived at the port in April 2023. The petitioner’s counsel argued that the import was clearly covered under the protected period mentioned in the public notice and that the denial of the TRQ benefit was arbitrary, especially when the goods were cleared only because customs authorities insisted on payment of duty.

The counsel further argued that the duty was paid under protest and that the issue was already settled by a coordinate Bench of the Delhi High Court in Ajanta Soya Ltd. v. Union of India.

The customs authorities later issued Notification No. 37/2023-Customs dated 10 May 2023, restoring the exemption but only prospectively from 11 May 2023. Due to this, the petitioner’s import fell into a gap period during which the exemption was denied. The petitioner challenged the denial of the exemption and sought a refund of the duty paid.

The department’s counsel argued that the Delhi High Court lacked territorial jurisdiction since the petitioner was based in Jaipur and the import was cleared through Kandla Port in Gujarat. Reliance was placed on Supreme Court decisions to argue that merely challenging a central notification was not sufficient to confer jurisdiction.

The Division Bench comprising Justice PrathibaM. Singh and Justice Shail Jain observed that although the law on territorial jurisdiction was settled, the petition had been pending for more than two years and no objection on jurisdiction had been raised earlier, even in the counter affidavit. The court pointed out that the main issue concerned the applicability of TRQ benefits under the relevant notifications.

The court further observed that the issue was squarely covered by the decision in Ajanta Soya Ltd., where it was held that imports covered by Bills of Lading dated on or before 31 March 2023 and landing before 30 June 2023 were entitled to TRQ exemption. The court explained that the Special Leave Petition filed against that judgment had already been dismissed by the Supreme Court on delay as well as on merits.

The court held that the petitioner was entitled to the same benefit and that denial of exemption was not sustainable in law. The court directed the authorities to process and grant refund of the customs duty paid by the petitioner in accordance with law within three months. It clarified that the order was passed in the unique facts of the case and would not act as a precedent. The writ petition was disposed of.

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