Facts of the Case

Messrs. Global Exim filed a writ petition under Article 226 of the Constitution of India before the Telangana High Court. The petitioner intended to import EV batteries used in the automotive industry. It sought directions to the Union of India and the Commissioner of Customs, Hyderabad, for clearance of such EV batteries under DFIAs issued against export of agricultural tractors.

The petitioner specifically sought permission to clear EV batteries under the description “Automotive Battery” without insisting upon actual use thereof in the exported agricultural tractors. It also sought extension of the benefit of the customs notifications referred to in the petition to the proposed EV battery imports.

The petitioner apprehended that although an automotive battery was a permissible import for agricultural tractors, EV batteries intended for electrical vehicles might not be construed by the customs authorities as falling within the permissible import description.

Significantly, at the stage when the writ petition was filed, no such import had actually taken place and no decision had been taken by the competent customs authority on the permissibility of the proposed import.

Issues Involved

The principal issues arising from the proceedings were:

  1. Whether EV batteries could be treated as covered by the description “Automotive Battery” under DFIAs issued against export of agricultural tractors.
  2. Whether clearance could be permitted without insisting upon actual use of the imported battery in the export product.
  3. Whether the petitioner was entitled to the claimed duty-free benefit under Customs Notification No. 98 of 2009 dated 11 September 2009 and Customs Notification No. 19/2015-Cus dated 1 April 2015.
  4. Whether the writ petition was maintainable at a stage when no import had taken place and no adverse decision had been rendered by the customs authority.
  5. Whether, despite the premature nature of the petition, the petitioner should be granted an opportunity to approach the Commissioner of Customs for an appropriate decision in accordance with law.

Petitioner’s Arguments

The petitioner submitted that it intended to import EV batteries used in the automotive industry. Its case was that the proposed batteries should be considered within the description “Automotive Battery” under DFIAs issued against export of agricultural tractors.

The petitioner sought clearance without insistence on actual use of the imported item in the export product. It further claimed the benefit of the relevant customs notifications for duty-free import.

The petitioner expressed apprehension that while an automotive battery was a permissible import for agricultural tractors, the authorities might refuse to treat batteries for electrical vehicles as permissible imports under the same description. The grievance was based on the potentially severe consequences that could arise if customs authorities did not accept the proposed import as permissible.

In the interlocutory application under Section 151 CPC, the petitioner also sought provisional clearance of EV batteries as “Automotive Battery” under the relevant DFIAs without payment of customs duty by extending the claimed notification benefits.

Respondents’ Arguments

The order records that Mr. B. Mukherjee appeared for respondent No. 1 and Mr. B. Narsimha Sarma appeared for respondent No. 2. However, the judgment does not separately record detailed substantive arguments advanced by the respondents on the classification, DFIA eligibility, actual-user condition, or notification benefit.

Accordingly, no additional argument should be attributed to the respondents beyond what is expressly recorded in the judgment. The decisive circumstance considered by the Court was that no proposed import had yet taken place and, consequently, no decision had been taken by the customs authority.

Court Order / Findings

The Telangana High Court held that the writ petition appeared to be premature because no such import had taken place and, consequently, no decision had been taken by the competent authority.

However, the Court considered the grievance expressed by the petitioner and the severe consequences that might follow if the respondents did not accept the proposed import as permissible. Therefore, instead of deciding the substantive eligibility issue at that stage, the Court granted the petitioner liberty to submit a representation before respondent No. 2, namely the Commissioner of Customs, Hyderabad, within 15 days from the date of the order.

The Court further directed that, upon such representation being filed, the Commissioner of Customs should consider it and pass an appropriate order within one month from the date of receipt, in accordance with law.

The writ petition was accordingly disposed of without costs, and pending miscellaneous petitions, if any, were closed.

Important Clarification

This judgment does not finally hold that EV batteries are necessarily covered by the description “Automotive Battery” under the DFIA scheme. It also does not finally adjudicate that the petitioner is entitled to duty-free clearance under the customs notifications relied upon.

The Court’s finding was procedural and jurisdictional at this stage: since no import had occurred and no authority had taken a decision, the writ petition appeared premature. The Court therefore directed the petitioner to first place its case before the Commissioner of Customs, Hyderabad.

It is equally important that the Court did not reject the petitioner’s claim on merits. The Commissioner was directed to consider the representation and pass an appropriate order in accordance with law.

Further, the document contains an apparent discrepancy in the notification reference. While parts of the scanned record mention Customs Notification No. 98 of 2019 dated 11.09.2009, the operative order refers to Customs Notification No. 98 of 2009 dated 11.09.2009. Since the year “2019” is inconsistent with the stated 2009 date, the original notification and case record should be independently verified before publication or professional reliance.

Sections / Legal Provisions Involved

Article 226 of the Constitution of India — The writ petition was filed seeking a writ of mandamus or other appropriate writ, order, or direction against the respondents.

Section 151 of the Code of Civil Procedure, 1908 — The interlocutory application sought provisional clearance of EV batteries covered by the description “Automotive Battery” under DFIAs issued against export of agricultural tractors, without payment of customs duty by extending the claimed duty-free benefit.

Customs Notification No. 98 of 2009 dated 11 September 2009 — The petitioner sought extension of the notification benefit to the proposed import of EV batteries. The scanned order contains an apparent inconsistent reference on page 1 as “No. 98 of 2019,” while the operative order and IA material refer to “No. 98 of 2009.” This should be read with the original notification and record for verification.

Customs Notification No. 19/2015-Cus dated 1 April 2015 — The petitioner also sought extension of the claimed duty-free benefit under this notification to the EV batteries proposed to be imported.

DFIA Scheme — The dispute concerned whether EV batteries could be cleared under the description “Automotive Battery” against Duty Free Import Authorisations issued for export of agricultural tractors, without insisting upon actual use of such batteries in the export product.

Link to download the order -

https://mytaxexpert.co.in/uploads/1783503032_1527compressed.pdf

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