Bombay High Court Allows Export of Pending Consignment of Onions in Respect of Which Shipping Bills Have Been Generated Before Notification of the Ban

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A writ petition challenging the notification dated 14th September 2020 to ban the export of onions was filed by the Exporters Association before the Bombay High Court. The Court allowed the export of onions in respect of those orders where shipping bills were generated before the official notification of the ban. 

Background

On 14th September 2020, the Director-General of Foreign Trade, Department of Commerce, Ministry of Commerce & Industry, Government of India issued a notification prohibiting the export of all varieties of onions with immediate effect. The present Writ petition challenged this notification, alleging it to be unreasonable and arbitrary. It was also mentioned that even before the notification was published, a large number of consignments were kept on hold by the customs authorities.

In light of the same, the Petitioners requested the Court to order the Respondents to release the onions in respect of which shipping bills were generated before the issuance of the said notification.

Petitioners’ Submissions

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The Petitioners submitted that even before the notification was issued, the Customs Authorities kept on hold consignments where Let Export Orders were not issued throughout the day of 14th September 2020. Approximately 68 containers of exportable onions were brought to the parking plaza outside the customs area; however, the authorities did not process Let Export Orders despite filing and generation of shipping bills.

It was alleged that this would not be possible without the presence of internal communication on the policy changes regarding the export of onions. The Petitioners also raised their grievances regarding the same via e-mail on the same day.

Respondents’ Submissions

The Respondent Nos. 4 – 6 submitted three affidavits with the Court.

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In the first affidavit, the Respondents stated that impugned notification was received by the office of the answering Respondents at 7:59 pm on 14th September 2020. All the containers handed over to the Customs Authorities up to 13th September 2020 were allowed for export. An undertaking to the effect that the shipping bills will not lapse till a final decision is passed by this Court has been submitted.

In the second affidavit, the procedure for export has been explained by the Respondents and it is submitted that Let Export Orders were only issued after examination of good and scrutiny of documents. The Petitioners have not placed before the Court any documents to show that the containers were parked in the parking plaza.

In the third affidavit, the Respondents stated that two lists providing details of the shipping bills by the Petitioners have been verified. The Respondents also state that mere filing of shipping bills did not entitle the Petitioners to claim exportability of goods until and unless the same was examined by the Customs Authorities and Let Export Orders were issued.

Court’s Observations

The Court observed that even though the Petitioners alleged that the customs authorities were acting on insider knowledge to not accept shipments containing onions, the same was not denied by the Respondents in their affidavits.

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In response to the contention put forth by the Respondents denying exportability despite the shipping bills, the Court explained that Section 50 and 51 of the Customs Act prima facie indicated that a great deal of sanctity is attached to a shipping bill, and these were not empty formalities. 

On a perusal of the internal communication by the Central Board of Indirect Taxes & Customs dated 18th September 2020, paragraph 9.12(B) of the handbook of procedure stated that policy provisions to the disadvantage of the exporters shall not apply to consignments already handed over to the customs authorities up to the public notification date.

Court’s Decision

The Court relied on a recent decision of the Supreme Court which clarified the position regarding the date of enforceability of a notification published. It was held that the relevant date & time for determination would be the time of presentation of bills of the entry (shipping bills in the present case). The Court noted that even though the Respondents stated that they received a copy of the impugned notification at 7:59 pm on 14th September 2020; a perusal of the impugned notification makes it clear that it was uploaded at 10:28 pm on the same day.

Given the abovementioned facts, the Court stated that a case for the admission of interim relief as prayed for was made out. Firstly, the Court ordered the issuance of the Let Export Orders. Secondly, the Court allowed the export of onions in respect of shipping bills generated before 10:28 pm on 14th September 2020;

The Court further listed the matter for hearing in the first week of December 2020.

Click here to read judgment


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