The Delhi High Court’s Division Bench, composed of Justices Rajiv Shakdher and Tara Vitasta Ganju, issued an interim order on December 15 granting protection from the retrospective denial of the vested right of the benefit of the concessional rate of duty under project import regulations granted to solar power developers. The judgment further instructed the customs officials to forgo taking any hasty actions while importing products as a result of contracts registered under the Project Import Regulations of 1986.

In several states across India, the petitioner/assessee operates solar power installations. In accordance with Chapter 98 of Schedule I of the Customs Tariff Act of 1985 as amended by the Project Import Regulations of 1986, the petitioner applied for the advantages of a concessional rate of duty. By registering a contract under the aforementioned Regulations at the port of import, the response granted the benefit of a concessional rate of duty.

Solar power projects were later removed from Sl. No. 2 and 3 of the Table of Sponsoring Authorities attached to the Project Import Regulations by Notification 54/2022-Customs dated 19.10.2022, with effect from 20.10.2022.

By applying the notification retrospectively, the Assistant Commissioner of Customs issued a letter on November 21, 2022, making it infructuous to register contracts at the port of import.

The petitioner argued that the respondent's acts, which completely deviate from established legal standards, have unjustly and unfairly infringed upon the petitioner's vested right with regard to the past.

The petitioner added that, in contrast to Section 164 of the CGST Act, Section 157 of the Customs Act does not mention the ability to enact retrospectively delegated legislation.

The petitioner has established a prima facie case, according to the court, and the importation procedure as a whole will be halted if interim protection is not granted. There should be certainty on the eligibility for concessionary duty benefits and there shouldn't be any unintentional delays in the project's execution.

According to the court, the problem only has financial ramifications for which appropriate instructions might be given, and the petitioner has already secured the interest of the Revenue through the use of the Continuity Bond and Bank Guarantee.

The court instructed the respondents not to take any precipitous action against the petitioner at the time of import without conferring any equity in the petitioner's favour.

Case Title: ReNew Hans Urja Pvt. Ltd. vs. Central Board of Indirect Taxes and Customs
Citation: W. P. (C) 17116/2022
Link: http://164.100.60.183/dhcqrydisp_o.asp?pn=360191&yr=2022