The Bombay High Court clarified that import restrictions under the Foreign Trade Policy apply prospectively from the notification's publication date and cannot affect goods already dispatched from the exporting country, reinforcing the principle that import completion occurs at customs clearance, not physical arrival. The court dismissed the revenue's contention that transitional benefits under FTP 2023 were unavailable due to the notification's specific non-obstante clause.
Background & Facts
The Dispute
Heimerle Refinery Private Limited imported studded platinum jewelry via five Airway Bills dated 30th and 31st March 2026. The goods arrived in Indian territorial waters on 1st April 2026 at 00:42 a.m. and 2nd April 2026 at 01:39 a.m., prior to the publication of Notification No.02/2026-27 dated 01.04.2026 in the Official Gazette on 2nd April 2026 at 20:52:28 hours. This notification amended CTH 7113 under Chapter 71 of ITC (HS) Schedule I to the Foreign Trade Policy 2023, changing the import policy for the goods from 'free' to 'restricted'. The petitioner filed Bills of Entry for release after the notification's publication (Nos.8411463 and 8418268 on 01.04.2026; Nos.8590663 and 8590666 on 10.04.2026; No.8735308 on 17.04.2026). The respondents refused clearance, asserting the restriction applied despite the goods' pre-notification arrival.
Key Facts
- The goods consisted of studded platinum jewelry imported under Airway Bills dated 30th March 2026 and 31st March 2026
- Physical arrival in India: 1st April 2026 at 00:42 a.m. (first consignment) and 2nd April 2026 at 01:39 a.m. (second consignment)
- Notification No.02/2026-27 dated 01.04.2026 published in Official Gazette on 02.04.2026 at 20:52:28 hours
- Bills of Entry filed post-publication:
- Nos.8411463 and 8418268: 01.04.2026 (cleared under interim order)
- Nos.8590663 and 8590666: 10.04.2026
- No.8735308: 17.04.2026
- Rate of duty and value of imported jewellery were not disputed by either party
- Petitioner did not challenge the Union's power to amend the FTP or the notification's validity
- Interim order dated 05.05.2026 granted release of consignments covered by Bills of Entry Nos.8411463 and 8418268 upon furnishing ITC Bond
- Further interim direction dated 05.05.2026 provisionally released consignments under Bills of Entry Nos.8590663 and 8735308 against 50% bank guarantee and ITC Bond for balance value
Procedural History
- 05.05.2026: Interim order passed by Bombay High Court granting conditional release of two consignments
- 29.05.2026: Hon'ble Supreme Court permitted petitioner to apply under Office Memorandum dated 13.05.2026 in SLP (C) No.18946/2026
- 17.08.2026: Hon'ble Supreme Court disposed of SLP, directing Bombay High Court to decide the writ petition on its merits
- 19.10.2026: Judgment delivered by Bombay High Court (M.S. Karnik & Sandesh D. Patil, JJ.)
The Parties' Positions
Petitioner's Contention: The date of import for FTP restriction applicability is the date of shipment/dispatch (Airway Bill date), not arrival or clearance. Goods dispatched before notification publication cannot be subjected to post-arrival restrictions, relying on Enero Jewels Pvt. Ltd. & Anr. vs. Union of India (2026) 4 TMI 1607 and M/s. Bright Metal Refiners vs. DGFT & Ors. (2026) 6 TMI 407.
Respondent's Contention: The notification's paragraph 3 operates irrespective of shipment status, prior contracts, or Bill of Entry filing date. Date of import under Customs Act, 1962 (date of Bill of Entry filing) governs restriction applicability, citing Union of India & Others vs. Ganesh Das Bhojraj (2000) 4 SCC 5 and Kiran Spinning Mills v. Collector of Customs (1999) 113 ELT 753 (SC).
Relief Sought
The petitioner sought:
- Declaration that Notification No.02/2026-27 dated 01.04.2026 is not applicable to goods arrived in India before its publication on 02.04.2026
- Writ of Mandamus directing respondents to forthwith permit clearance of studded platinum jewelry covered under Bills of Entry Nos.8411463 (01.04.2026), 8418268 (01.04.2026), 8590663 (10.04.2026), and 8735308 (17.04.2026)
- Direction to permit submission of Bill of Entry No.8590666 dated 10.04.2026 without insisting upon Import Authorisation/License
The Legal Issue
The central question was whether the date of import for determining applicability of a restriction imposed under the Foreign Trade Policy is the date of physical arrival of goods in India or the date of shipment/dispatch from the exporting country, specifically whether Notification No.02/2026-27 dated 01.04.2026 could apply to goods already arrived in Indian territorial waters before its publication in the Official Gazette.
Arguments Presented
For the Petitioner
Learned Senior Advocate Prakash Shah relied on the decisions of the Gujarat High Court in Enero Jewels Pvt. Ltd. & Anr. vs. Union of India & Ors. (2026) 4 TMI 1607 and the Delhi High Court in M/s. Bright Metal Refiners vs. Dheeraj Rastogi & Ors. (2026) 6 TMI 407, which held that goods arrived before notification publication could be cleared without import authorisation. He emphasized that these judgments were acted upon by the Revenue, establishing a consistent practice. The petitioner argued that the notification's specific non-obstante clause (paragraph 3) could not override the settled principle from Union of India v. Ganesh Das Bhojraj (2000) 4 SCC 5 that import is complete only upon customs clearance, not arrival. He contended that the Office Memorandum dated 13.05.2026 issued by DGFT lacked statutory force and could not retrospectively apply the notification.
For the Respondent
Learned counsel for the Revenue, Mr. Mishra, vehemently opposed the writ petition, asserting that the notification's paragraph 3 expressly excluded transitional benefits under paragraph 1.05(b) of FTP 2023 'irrespective of any prior contract, irrevocable letter of credit, advance payment, or shipment status'. He relied on the affidavit-in-reply of Respondent No.5 (DGFT), which stated that any import consignment not cleared before 01.04.2026 would be governed by the revised 'Restricted' policy irrespective of arrival date or Bill of Entry filing. The respondent cited Union of India & Others vs. Ganesh Das Bhojraj (2000) 4 SCC 5 and Kiran Spinning Mills v. Collector of Customs (1999) 113 ELT 753 (SC) to argue that the date of import for FTP purposes is the date of Bill of Entry filing/customs clearance, not shipment date. He maintained that the notification, being a valid exercise of delegated legislation under Sections 3 and 5 of the FTDR Act, 1992, operated prospectively from its publication date without exceptions.
The Court's Analysis
The Court began by noting the undisputed facts: goods arrived before notification publication, and Bills of Entry were filed after publication. It then examined the core controversy regarding the 'date of import' under FTP 2023. The Court referred to paragraph 1.05(b) of FTP 2023, which states: 'Item wise Import/Export Policy is delineated in the ITC (HS) Schedule I and Schedule II respectively. The importability/exportability of a particular item is governed by the policy as on the date of import/export. The date of import/export is defined in para 2.17 of HBP 2023. Bill of Lading and Shipping Bill are the key documents for deciding the date of import and export respectively.' Paragraph 2.17(a) of the Handbook of Procedure 2023 (HBP) further clarifies: 'Date of reckoning of import is decided with reference to date of shipment/dispatch of goods from supplying country as given in Paragraph 11.11 of Handbook of Procedures and not the date of arrival of goods at an Indian port.' Paragraph 11.11 of HBP specifies that for air imports, the date of shipment is the date of the relevant Airway Bill.
The Court held that the notification's specific provision in paragraph 3 - stipulating that the amended import policy shall operate 'irrespective of any prior contract, irrevocable letter of credit, advance payment, or shipment status' - is a valid exercise of rule-making power under Sections 3 and 5 of the FTDR Act, 1992. Applying the principle of generalia specialibus non derogant, this specific provision prevails over the general transitional benefit in paragraph 1.05(b) of FTP 2023. However, the Court critically distinguished this from the petitioner's reliance on Enero Jewels and Bright Metal Refiners, noting those decisions did not consider the notification's specific non-obstante clause.
Crucially, the Court turned to Supreme Court precedent in Union of India & Others vs. Ganesh Das Bhojraj (2000) 4 SCC 5 and Kiran Spinning Mills v. Collector of Customs (1999) 113 ELT 753 (SC), which established that 'import' is complete only when goods are cleared for home consumption/customs barrier is crossed, not upon physical arrival or landing. The Court stated: 'It is well-settled by the Hon'ble Supreme Court that "import" is complete, and the taxable/regulatory event occurs, only when goods are cleared for home consumption / cross the customs barrier, and not on the date the conveyance lands or the goods enter Indian territorial limits.' Applying this principle, since the petitioner's Bill of Entry No.8410589 dated 31.03.2026 remained unassessed and uncleared as of the notification's commencement date, no vested right to clearance under the prior 'Free' policy accrued merely from physical arrival.
The Court further noted that the definition of 'import' under the FTDR Act, 1992 is analogous to the Supreme Court's meaning and congruent with the Customs Act, 1962. It rejected the respondent's contention that the date of Bill of Entry filing governs restriction applicability, holding that while Section 15 of the Customs Act, 1962 makes the date of Bill of Entry relevant for customs duty rate, it does not determine the applicability of FTP restrictions. The Court emphasized: 'Having defined the date of import under the FTP, the date of import under the Customs Act cannot be applied, otherwise the date of import defined in the Policy shall be redundant and meaningless.'
Finally, the Court relied on the Hon'ble Supreme Court's decision in Viraj Impex Pvt. Ltd. vs. Union of India (2026) 396 E.L.T. 113 (SC), which held that a notification cannot acquire force of law prior to its publication in the Official Gazette, and in the e-Gazette era, the precise hour and minute of digital upload is decisive. The Court concluded: 'We have no hesitation in holding that the Notification acquired the force of law only on 2nd April 2026 at 20:52:58 hours, and it can be validly applied only to the goods dispatched from the country of export after its publication and not to goods already dispatched and arrived in India prior to its publication.'
The Verdict
The petitioner succeeded in its core contention. The Court declared that Notification No.02/2026-27 dated 01.04.2026 is not applicable to the goods arrived in India before its publication on 2nd April 2026 at 20:46:52 hours (noting a typographical error in the prayer clause referencing 2027). It directed the respondents to forthwith permit clearance of the studded platinum jewelry covered under Bills of Entry Nos.8411463 (01.04.2026), 8418268 (01.04.2026), 8590663 (10.04.2026), and 8735308 (17.04.2026) for home consumption. Additionally, the Court directed that the petitioner be permitted to submit Bill of Entry No.8590666 dated 10.04.2026 without insisting upon Import Authorisation/License. The Interim Application (L) No.22543 of 2026 was also disposed of. No monetary compensation, interest, or costs were awarded, as the relief sought was purely operational clearance of goods.
What This Means For Similar Cases
Date of Import Under FTP Is Shipment-Specific
Practitioners must now ascertain that for FTP restriction applicability, the 'date of import' is definitively the date of shipment/dispatch from the exporting country (evidenced by Airway Bill for air imports, Bill of Lading for sea), not the date of arrival in Indian territorial waters or customs clearance. This overturns any reliance on arrival-date arguments when challenging post-arrival notifications. Importers should retain shipment documents as primary evidence to counter restriction claims on pre-notification dispatches.
Specific Notification Provisions Override General FTP Clauses
When a notification contains an express non-obstante clause (e.g., 'irrespective of prior contract or shipment status'), it validly overrides general transitional benefits under the FTP under the principle generalia specialibus non derogant. However, such specificity does not alter the fundamental timing of when the notification acquires legal force - publication in the Official Gazette remains the decisive moment, with e-Gazette timestamps being critical. Revenue officers cannot issue executive clarifications (like Office Memoranda) that contradict this statutory timeline.
Clearance Date Determines Policy Applicability, Not Arrival
The ratio in Ganesh Das Bhojraj and Kiran Spinning Mills remains binding: import completion occurs at customs clearance, not physical arrival. Thus, even if goods arrive before a notification's publication, if the Bill of Entry remains unassessed at that moment, no vested right exists under the prior policy. Importers cannot rely solely on pre-notification arrival to claim exemption; they must demonstrate the goods were not yet cleared for home consumption when the notification came into force. This reinforces customs procedural vigilance regarding assessment timelines.
