The High Court of Bombay in the case of Canon India Pvt. Ltd. v. Union of India, Writ Petition No. 9937 of 2025, decided on 09.09.2025, examined the obligation of Customs authorities to issue reasoned orders on exemption claims even when importers file Bills of Entry “under protest”. The Court held that a reasoned order must be passed in every case where the importer disputes assessment, including situations where the importer files the Bill of Entry without an exemption claim solely because Customs refused to accept such claim. The Court thus directed the Department to issue speaking orders within a prescribed timeframe, reaffirming that administrative convenience cannot override statutory due process.
FACTS
Canon India Private Limited (hereinafter referred to as the “Petitioner”), imported Digital Still Image Video Cameras between 11 September 2014 and 5 January 2015. The Petitioner claimed eligibility for Basic Customs Duty exemption under Notification No. 25/2005-Customs, Sr. No. 13 (as amended).
Union of India through the Secretary, Department of Revenue, Ministry of Finance, and the jurisdictional Customs authorities (hereinafter referred to as the “Respondents”), declined to allow the exemption, citing the Explanation to Sr. No. 13 of the notification. As the Customs authorities were not prepared to accept Bills of Entry carrying the exemption claim, the Petitioner under protest was compelled to file all 17 Bills of Entry without claiming the exemption, solely to avoid demurrage and port detention charges.
For each consignment, the Petitioner submitted a letter of protest expressly asserting its right to the exemption and recorded that the duty was paid under protest. Out of 17 Bills of Entry, nine were finalized without any speaking order, while the remaining eight were provisionally assessed again without issuance of any reasoned or speaking order.
Aggrieved by this, the Petitioner approached the High Court under Article 226 of the Constitution, seeking a writ of mandamus directing the Respondents to issue speaking orders under Sections 17(5) and 18(1A) of the Customs Act, 1962 on each assessment, to enable it to avail the appellate remedy.
ISSUES
- Whether Customs authorities are statutorily bound to pass speaking orders under Sections 17(4)/(5) and 18(1A) of the Customs Act, 1962 when Bills of Entry are filed “under protest” or without exemption claims solely because of departmental insistence?
- Whether Customs can avoid issuing speaking orders by contending that the importer voluntarily accepted the assessment when filing Bills of Exchange without claiming the exemption?
CONTENTIONS OF THE PARTIES
The Petitioner argued that the exemption in question had been consistently allowed in the past on identical goods imported by it.
The Respondents’ insistence that the Bills of Exchange could not be filed with the exemption claim effectively compelled the Petitioner to omit the claim under protest.
The protest letters made clear that the duty payment was without prejudice to its right to exemption. Hence, the assessment was disputed, and speaking orders were mandatory.
The absence of a speaking order deprived the Petitioner of its statutory right of appeal, thereby violating principles of natural justice.
The Respondents on the contrary argued that since the Bills of Entry were filed without claiming exemption and were accepted as such, the Customs authorities were not required to issue any speaking order.
They further argued that the obligation to issue a speaking order arises only when the Customs authority disagrees with the classification or valuation proposed by the importer. Here, as no claim was made in the Bills of Entry, there was no disagreement and thus no occasion for a speaking order or adjudication.
DECISION AND FINDINGS
The High Court of Bombay rejected the Respondents’ stand and held that the filing of a Bill of Entry without claiming exemption, under protest or due to departmental coercion, does not extinguish the importer’s right to seek a speaking order.
The Court observed that the Petitioner had consistently asserted its entitlement to exemption through contemporaneous protests and duty payments under protest. Therefore, the situation was not one of simple acceptance of assessment. The department’s refusal to entertain the exemption claim and simultaneous refusal to pass a reasoned order would frustrate the importer’s right of appeal, which the law does not permit.
The Court emphasized that under Section 17(5), Customs authorities must pass a speaking order whenever the assessment is disputed. This duty exists even if the importer files the Bills of Exchange under protest or without the exemption entry due to administrative insistence. The same obligation extends to finalization of provisional assessments under Section 18(1A).
The Court relied upon Ingram Micro India Pvt. Ltd. v. Principal Commissioner of Customs, Chennai, 2017 (358) E.L.T. 125 (Mad.), and Micromax Informatics Ltd. v. Principal Commissioner, 2017 (358) E.L.T. 38 (Mad.), wherein it was held that filing of Bills of Exchange under protest obligates Customs to pass a speaking order so that the importer’s right to appeal is preserved.
Accordingly, the High Court directed the Respondents to issue speaking orders in respect of all 17 Bills of Entry within three months from the date of uploading the order; mandated that such orders be passed after granting a personal hearing to the Petitioner; and clarified that all contentions on merits were kept open. The Court made the rule absolute and did not award costs
AMLEGALS REMARKS
The judgment fortifies a crucial procedural safeguard under the post-2011 self-assessment regime. Even when Customs compels importers to file Bills of Entry without exemption claims, the legal duty to issue a reasoned order persists. This ensures accountability, transparency, and the importer’s right to an effective appellate remedy under Section 128 of the Customs Act, 1962.
Customs authorities often reject exemption claims on the ground of departmental instructions or interpretations, avoiding adjudication through “accepted” assessments. The Bombay High Court clarifies that such a practice is impermissible, an importer’s protest triggers the statutory requirement for a speaking order. Administrative convenience cannot override statutory due process.
The ruling serves as a caution that refusing to adjudicate protests can amount to denial of natural justice. Even a concise speaking order is sufficient, provided it records reasons and preserves the importer’s appellate rights.
For any query, feel free to reach out to hiteashi.desai@amlegals.com