Vatech Wabag Ltd. v. Assistant Commissioner of Customs, Group 6

What happened

Vatech Wabag Limited, which works in total water management, was awarded a contract by the Chennai Metropolitan Water Supply and Sewerage Board for a 400 MLD seawater reverse-osmosis desalination plant at Perur. For the project it imported fasteners and a filter cartridge in five consignments under bills of entry dated 30 October 2024, 8 February 2025, 13 August 2025, 19 March 2025 and 13 August 2025, and the goods were cleared on payment of customs duty at 15%. It claimed assessment under Heading 98.01 of the Customs Tariff Act, 1975 read with the Project Import Regulations, 1986, and its representation was rejected by proceedings of 2 June 2026 of the Assistant Commissioner of Customs (Group 6) because the project contract had been registered with Customs only after the purchase orders had been placed. The contract was registered on 5 June 2025. The petitioner argued that the goods under the two bills of entry of 13 August 2025 were imported after registration and that the bills could be revised under section 18A of the Customs Act, 1962 despite clearance, while the department said that the purchase orders pre-dated registration and that the bills could not be amended after clearance for home consumption because of section 149.

Questions before the court

• Does the date of a purchase order placed before registration of the project contract decide eligibility for Heading 98.01, and can bills of entry for cleared goods be revised to claim the benefit?

Why the court ruled this way

The Court held that a purchase order placed with a foreign supplier is only a commercial transaction and does not itself amount to importation, and that the date relevant to the Project Import Regulations is the date of importation, which under section 2(23) means bringing goods into India from outside, a point considered by the Supreme Court in Garden Silk Mills (paragraphs 8–9). Regulation 4 allows assessment under Heading 98.01 for goods imported against specific contracts registered with the appropriate Customs House in the manner prescribed in regulation 5, the contract must be registered before the order permitting clearance for home consumption, and an importer must apply for registration on or before importation, so what matters is whether the goods were imported after registration and before the clearance order, and the date of the purchase order is not determinative (paragraphs 10–12). The two consignments under the bills of entry of 13 August 2025 were imported after registration on 5 June 2025 and qualify to seek the benefit, subject to the other requirements, while the three earlier consignments were imported before registration and do not (paragraphs 13–14). The proviso to section 149 restricts amendment of a bill of entry after clearance, but section 18A, inserted with effect from 29 March 2025 and beginning with a non obstante clause, lets an importer revise an entry after clearance in the prescribed form, manner and time, so the bar in section 149 cannot by itself prevent revision and the request must be considered under section 18A (paragraphs 15–17).

Controlling point

Eligibility under Heading 98.01 depends on the date of importation relative to registration of the project contract and not on the date of the purchase order, and section 18A permits an importer to seek revision of a cleared bill of entry despite the proviso to section 149.

Order and next steps

The Court allowed the writ petition in part and set aside the proceedings of 2 June 2026 insofar as they relate to Bills of Entry Nos. 3866403 and 3152579 of 13 August 2025. It directed the first respondent to consider and permit revision of those bills under section 18A, subject to the applicable statutory requirements and prescribed conditions, and, on revision, if otherwise permissible, to extend the benefit of Heading 98.01 and process the claim for refund of the differential duty in accordance with law. For the other three bills of entry the challenge failed and the claim was rejected, the connected miscellaneous petitions were closed and there was no order as to costs.

Practical implications

An importer with a project contract should register it with the proper Customs House on or before importation, because goods that arrive after registration can qualify even if the purchase orders were placed earlier, whereas goods imported before registration cannot, and an importer that already cleared goods can seek revision of the entry under section 18A.

Limits of this ruling

• The Court directed consideration under section 18A subject to the statutory requirements and prescribed conditions and did not decide whether the other conditions of the Project Import Regulations were met for the two consignments or the amount of any refund. The ruling covers five bills of entry and rejected the claim for three of them.