Madras HC Invalidates Circular's Time Bar on Shipping Bill Conversion: SC to Hear Appeal Against Indian Oil [Read Order]
The High Court held that para 3(a) of Circular No. 36/2010 was ultra vires both the Customs Act and Articles 14 and 19(1)(g) of the Constitution
Madras High Court, Indian Oil, Madras HC Invalidates Circular's
Madras High Court, Indian Oil, Madras HC Invalidates Circular's
The Supreme Court is to hear the customs appeal against Indian Oil Corporation Limited (IOCL), as the Madras High Court held that the circular imposing a time bar on shipping bill conversion was ultra vires.
In a key customs litigation, the Madras High Court invalidated the three-month time limit imposed by CBEC Circular No. 36/2010 for conversion of shipping bills between export schemes, declaring it ultra vires Section 149 of the Customs Act and violative of constitutional rights.
The dispute arose when IOCL requested the conversion of 698 shipping bills in June 2011. The Commissioner of Customs allowed conversion for 594 bills but rejected 104 on the ground that the request was made beyond three months from the date of Let Export Order (LEO), citing para 3(a) of CBEC Circular No. 36/2010-Cus dated 23.09.2010.
IOCL appealed to the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai, which set aside the rejection and remanded the matter for reconsideration.
The Department then filed a statutory appeal before the Madras High Court under Section 130 of the Customs Act.
The High Court upheld the Tribunal’s decision and relied heavily on the Gujarat High Court’s ruling in Mahalakshmi Rubtech Ltd v. Union of India. In that case, the Gujarat High Court had struck down the same circular’s time restriction, holding that Section 149 does not prescribe any time limit for amendment of shipping bills and that the CBEC could not impose one through delegated legislation.
The Madras High Court noted that the Supreme Court had dismissed the Department’s SLP against Mahalakshmi Rubtech Ltd, on grounds of delay, and had not interfered with the Gujarat High Court’s reasoning.
The High Court held that para 3(a) of Circular No. 36/2010 was ultra vires both the Customs Act and Articles 14 and 19(1)(g) of the Constitution. Consequently, it ruled that the Commissioner could not rely on the circular to reject IOCL’s conversion request.
The Madras High Court, in the current dismissed the Department’s appeal and directed the Original Authority to reconsider the remaining 104 shipping bills on merits, without applying the time bar. It also ordered that a personal hearing be granted to IOCL and that the matter be disposed of within 12 weeks.
Following this, the Customs Department filed a Special Leave Petition (SLP) before the Supreme Court. The case now awaits final adjudication by the Supreme Court, which will determine whether the CBEC’s circular-imposed time limit can override statutory provisions and constitutional protections.
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