Court holds that notification changing import policy from "free" to "restricted" cannot affect goods dispatched before its e-Gazette publication; Office Memorandum clarifications without statutory backing dismissed
In a landmark judgment delivered on October 19, 2026, the Bombay High Court, in a Division Bench comprising Justices M.S. Karnik and Sandesh D. Patil, clarified the applicability of import restrictions under the Foreign Trade Policy (FTP) of India. The writ petition filed by Heimerle Refinery Private Limited challenged the refusal by customs authorities and the Directorate General of Foreign Trade (DGFT) to clear consignments of studded platinum jewelry imported before the publication of a notification that amended the import policy from "free" to "restricted."
The court examined the core issue: whether the import restrictions notified under the FTP apply to goods that had already been dispatched from the exporting country and arrived in India before the notification's effective date, but for which Bills of Entry were filed after the notification. The notification in question, No. 02/2026-27 dated April 1, 2026, was published digitally in the e-Official Gazette on April 2, 2026, at 8:52:28 PM, amending the import policy under Chapter 71 of the ITC (HS) Schedule I.
Heimerle Refinery contended that the relevant date for determining the applicability of import restrictions is the date of shipment or dispatch from the exporting country, as defined in paragraph 1.05(b) of the FTP and paragraphs 2.17(a) and 11.11 of the Handbook of Procedures (HBP), 2023. They argued that since the goods arrived in India before the notification's publication, they should not be subject to the new restrictions, despite the Bills of Entry being filed later.
The respondents, representing the Union of India, countered by relying on Supreme Court precedents such as Union of India v. Ganesh Das Bhojraj and Kiran Spinning Mills, which held that the import is complete only upon customs clearance for home consumption, not on landing or arrival. They further relied on an Office Memorandum dated May 13, 2026, which clarified that consignments not cleared before April 1, 2026, would be governed by the revised restricted policy, regardless of arrival or filing dates.
After detailed analysis, the court held:
1. Relevant Date for Import Restrictions: The date of import for the purpose of FTP restrictions is the date of shipment/dispatch from the exporting country, evidenced by the Airway Bill or Bill of Lading, and not the date of filing the Bill of Entry or clearance for home consumption under the Customs Act. This interpretation aligns with the specific definitions in the FTP and HBP, and supersedes the general customs concept of import date.
2. Notification's Effective Date: The notification changing the import policy acquired force of law only upon its publication in the Official Gazette. Since the goods had arrived in India before this publication, the notification could not retrospectively restrict their clearance.
3. Office Memorandum's Legal Status: The Office Memorandum clarifying immediate applicability of restrictions to uncleared goods has no statutory force, cannot override the FTP or the notification, and cannot impose retrospective effect. The court emphasized that executive clarifications contrary to statutory provisions or judicial pronouncements have no legal standing.
4. Binding Precedents and Consistency: The court relied on prior judgments from the Gujarat High Court (Enero Jewels Pvt. Ltd.) and Delhi High Court (Bright Metal Refiners), which had similar facts and were accepted by the revenue authorities. It underscored the principle that revenue authorities must maintain consistency in applying the law to similarly situated taxpayers.
5. Distinction from Customs Act Provisions: The court distinguished Supreme Court decisions cited by the respondents, noting those related to customs duty rate determination (Section 15 of Customs Act) do not govern FTP import policy applicability.
Consequently, the Bombay High Court allowed the writ petition, directing the respondents to release the consignments for home consumption without insisting on import authorisation or license. The court declared the notification of April 1, 2026, not applicable to goods arriving before its publication on April 2, 2026, at 8:52:28 PM.
This judgment reinforces the principle that import restrictions under the FTP apply prospectively from the date of notification's publication and that the date of shipment/dispatch is the decisive factor for import policy applicability. It also clarifies the limited legal effect of executive circulars or memoranda that attempt to alter statutory policy retrospectively.
Bottom Line:
Foreign Trade Policy - Import restriction - Relevant date for applicability of restriction under FTP is date of shipment/dispatch as defined in FTP/HBP and not date of filing Bill of Entry or customs clearance - Notification changing import policy from "free" to "restricted" takes effect only upon publication in e-Gazette and cannot apply to goods already dispatched and arrived in India before such publication - Executive Office Memorandum cannot override FTP or give retrospective effect to notification.
Statutory provision(s):
Foreign Trade (Development and Regulation) Act, 1992 Sections 3 and 5, Foreign Trade Policy 2023 Paragraph 1.05(b), Handbook of Procedures 2023 Paragraphs 2.17(a) and 11.11, Customs Act, 1962 Section 15
Heimerle Refinery Private Limited v. Union of India, (Bombay)(DB) : Law Finder Doc Id # 2999613
