Bombay High Court helps Patanjali save ₹62 lakh in customs duty by beating tariff hike by 25 minutes

The Bombay High Court recently granted relief to Patanjali Foods by quashing the reassessment of customs duty on the import of crude palm oil for home consumption [Patanjali Foods Ltd. v Union of India and Ors.].The company would save around ₹62 lakh which it would have had to pay to the Department of Revenue if the revised rates were to apply.A Division Bench of Justices KR Shriram and Jitendra Jain noted that the notification revising tariff rates was passed came into force at around 9:30pm whereas the ex-bond bills of entry were presented between around 8:20 pm and 9 pm.Thus, Patanjali had self-assessed four ex-bond bills of entry around 25 minutes prior to the revised rates coming into force, the Court noted.."Admittedly, in this case four Ex-Bond Bills of Entry have been presented before the said Notification came into force. One bill of entry was self assessed on 13th May 2021 at 20:17:07 hours, the second was self assessed at 20:56:11 hours, the third was self assessed at 20:15:09 hours and the fourth was self assessed at 20:59:08 hours, whereas, the Notification was e-gazetted on 13th May 2021 at 21:24:11 hours," the Court said. .Patanjali Foods had moved the Court by way of a writ petition against reassessment of ex-bond bills of entry, all dated May 13, 2021, under the provisions of Section 68 of the Customs Act.The company sought clearance of the goods for home consumption.They argued that Revenue had incorrectly levied tariff rates that came into force after assessments of the bills of entry were filed as per requirements under Section 15 of Customs Act.According to Patanjali Foods, this reassessment resulted in additional customs duty, agriculture and infrastructure development cess, social welfare surcharge, and IGST amounting to a total of ₹61,69,890, which was paid under protest..Revenue argued that Patanjali Foods had an alternative remedy and should be asked to challenge the reassessment orders by way of appeal before appropriate forum. The Court however rejected this submission after noting that the reassessment orders were not speaking orders."Therefore, even if we decide to direct petitioner to file the appeal, petitioner will not even know the ground on which the reassessment was made and how the reassessment was contrary to the self assessment done by petitioner," it explained..Thereafter, the Court referred to the apex court's decision in Union of India & Ors. v M/s GS Chatha Rice Mills & Anr. which had held that the tariff rate in force would be the rate that was in force on the date and time of presentation of self assessed bills of entry.It then noted that the last of the four bills of entry was presented at 8:59 pm on May 13, 2021 whereas the revised tariff rates came into force 25 minutes later at 9:24 pm..Revenue had also argued that that Patanjali Foods had not filed a refund application within the limitation period of one year. The Court however cited the Supreme Court's decision in ITC Ltd v Commissioner of Central Excise, Kolkata IV to assert that limitation period was not applicable if the duty had been paid under protest..Therefore, the Court quashed and set aside the reassessment orders and directed Patanjali Foods to file an application for refund to the proper officer. It also directed the officer to lawfully dispose of the application within 12 weeks..Advocates Rajesh Rawal and HR Shetty instructed by HR Shetty and Associates appeared for Patanjali Foods.Advocate Jitendra B Mishra instructed by advocate Ram Ochani appeared for the Department of Revenue..[Read Judgment]