Customs to Decide Export Amendment Plea Before Proceeding With Penalty Action: Calcutta High Court

The Calcutta High Court has intervened in a long-pending dispute between a tea exporter and customs authorities, holding that punitive proceedings should not move forward while an exporter’s application for post-export amendment remains undecided for years. The Court directed the Customs Department to take a time-bound decision on the exporter’s request, observing that prolonged administrative inaction had exposed the exporter to avoidable penal action. The bench of Justice Om Narayan Rai observed that while courts are generally slow to interfere with show cause notices, the present case disclosed exceptional circumstances. The bench noted that the amendment application filed in November 2020 had remained undecided for nearly five years, contrary to regulatory timelines, thereby rendering the exporter vulnerable to penal proceedings. It held that if the amendment request had been considered and disposed of in time, the very basis of the show cause notice may not have arisen. The case arose from a show cause notice dated August 20, 2025, issued by the Additional Commissioner of Customs, Kolkata, proposing penal action against Ananda Bag Tea Company Limited for alleged failure to fulfil its export obligation under an advance authorisation scheme. The exporter challenged the notice, arguing that the alleged default stemmed from customs authorities’ failure to process its application for post-export amendment and issuance of an Export Obligation Discharge Certificate (EODC), despite repeated representations. According to the records, the exporter had applied for issuance of an EODC as early as August 25, 2020. While additional details were sought and duly furnished, the exporter later discovered that its clearing agent had inadvertently omitted the advance authorisation number and imported quantity details in two shipping bills. To rectify the lapse, the exporter applied for post-export amendment on November 23, 2020 and repeatedly followed up with customs authorities over the next several years. However, no final decision was taken on the amendment request. It was only in March 2024 that customs informed the exporter that one shipping bill was being placed before the competent authority, while raising objections in respect of the second bill relating to a mismatch in HSN and ITC(HS) codes. The exporter responded with clarifications and sought consideration of both shipping bills, but thereafter received no further communication. Despite the amendment request remaining unresolved, the show cause notice alleging non-fulfilment of export obligation was issued in August 2025. Counsel for the exporter contended that the show cause notice was premature and fundamentally flawed, as it was issued without deciding the long-pending amendment application. Reliance was placed on Supreme Court judgments emphasising that bona fide exporters should not be penalised for inadvertent procedural lapses, particularly when corrective steps are taken in accordance with law. It was also argued that under the Shipping Bill (Post Export Conversion in relation to Instrument Based Scheme) Regulations, 2022, such amendment applications are required to be disposed of within 30 days, a mandate that was ignored in the present case. The customs authorities, on the other hand, opposed the writ petition, submitting that courts should ordinarily refrain from interfering at the show cause notice stage and that the exporter could raise all its contentions before the adjudicating authority. They also pointed out that a pre-show cause consultation notice had been issued earlier, which the exporter could have responded to. Balancing equities, the High Court refrained from quashing the show cause notice but directed the customs authorities to dispose of the exporter’s post-export amendment application within two weeks, after granting an opportunity of hearing. The decision is required to be reasoned and communicated within a week thereafter. The exporter has been permitted to file its reply to the show cause notice within two weeks of receiving the decision on the amendment application. Clarifying that it had not examined the merits of the dispute, the Court left it open to the adjudicating authority to proceed in accordance with law after complying with the directions. The ruling underscores that administrative delays in deciding statutory applications cannot be allowed to precipitate penal consequences for exporters, particularly where the lapses are procedural and rectifiable. Case Details Case Title: The Ananda Bag Tea Company Limited Vs Union Of India And Ors Case No.: WPO/795/2025 Date: 10/12/2025 Counsel For Petitioner: Micky Chowdhary, Adv. Counsel For Respondent: Smarajit Roy Chowdhury, Adv. Click Here To Read Order Read More: GST Portal Faces Document Upload Glitch

Customs to Decide Export Amendment Plea Before Proceeding With Penalty Action: Calcutta High Court

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