Isabella Mariam

The High Court of Kerala Single Bench of Justice Ziyad Rahman A.A. has held that, for timber consignments imported prior to 11 May 2012, a lower conversion factor must be used in determining volume for customs purposes and directed the customs authorities to recompute and refund the additional customs duty. The petitions were brought by timber importers challenging the denial of refunds on imports from Myanmar and other countries, where duty had been assessed using a higher conversion factor. The Court recorded that the central issue concerned the conversion of timber quantities expressed in Hoppus Ton, a traditional unit used in Myanmar, into cubic meters under the metric system followed in India, and disposed of the writ petitions by setting aside the impugned orders.

The petitioners, comprising M/s. National Timbers, Kerala Timber Importers Association, Surabhi Woods, The Woodind, and others, imported timber logs from Myanmar and other countries. In all cases, the imported quantities were declared using the conversion factor of 1 Hoppus Ton = 1.416 cubic meters as reflected in invoices, packing lists, and commercial documents submitted for customs assessment.

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After payment of additional customs duty, the petitioners sought refund under Notification No.102/2007-Cus. dated 14.09.2007. However, the customs authorities granted only partial refunds, applying a higher conversion factor of 1 Hoppus Ton = 1.8027 cubic meters, relying on departmental standards and subsequent Public Notice No.21/2012 dated 11.05.2012.

The petitioners challenged the reduced refund and the insistence on executing provisional duty bonds, pointing out that appellate authorities in earlier proceedings had accepted their conversion factor and that various customs houses across India used differing conversion standards. They relied on a CESTAT common order in 136 appeals, which held that the 2012 public notice applied only to imports made after 11.05.2012.

The respondents maintained that the public notice must be applied uniformly. The petitioners also produced evidence of earlier physical verification ordered by the High Court, which supported the conversion ratio of 1.416 cubic meters.

The Court recorded that “the issue involved is regarding the refund of additional customs duty paid for the import of timber from Myanmar and other foreign countries” and that the dispute related to the appropriate conversion factor for converting Hoppus Ton into cubic meters.

It noted that the petitioners had “declared the conversion factor… as 1 Hoppus ton is equal to 1.416 cubic meters”, while the Department used 1.8027 cubic meters. The Court stated that when refund claims were filed, “the entire refund was not granted in view of the fact that… the conversion factor to be applied is 1 Hoppus ton is equal to 1.8027 cubic meter”. It also recorded that provisional duty bonds were required because the issue was pending before CESTAT.

Referring to the interim order dated 01.12.2011, the Court observed that “various customs houses in the country are adopting different conversion factors” and that the Board was directed to issue clarification. The resulting public notice fixed the factor at 1.8027 CBM.

The Court then recorded the content of the CESTAT’s common order, noting that the Tribunal held that the public notice “will be applicable only in respect of imports made after 11.5.2012” and that the appeals were rejected accordingly. The judgment stated: “since the CESTAT has passed an order… the benefit granted to the parties therein are to be extended to the petitioners as well” because they were similarly situated.

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The Court also recorded physical verification in an earlier proceeding involving one of the petitioners, where the declared measurement using 1.416 cubic meters was found consistent with actual measurements, whereas applying the Department’s factor would yield much higher and factually incorrect volume. It stated that “the conversion factor relied on by the petitioners appears to be correct.”

The Court disposed of all writ petitions “quashing the impugned orders” and directed the authorities “to grant refunds by applying the conversion factor as 1 Hoppus ton is equal to 1.416 cubic meters. Necessary orders in this regard shall be passed within a period of three months from the date of receipt of a copy of this order and the refund shall be effected within a period of one month thereafter.”

Advocates Representing The Parties

For the Petitioners: Sri. T.M. Abdul Latiff, Senior Counsel Anil D. Nair, Sri. M. Balagopal, Smt. Nivedita A. Kamath, Sri. J.R. Prem Navaz.

For the Respondents: Sri. P.R. Sreejith, Senior Central Government Counsel; Sri. Sreelal Warrier, Standing Counsel, Central Board of Indirect Taxes & Customs.

Case Title: National Timbers & Connected Cases v. Union of India & Others
Neutral Citation: 2025: KER:90236
Case Numbers: WP(C) Nos.15946/2011, 7381/2012, 11115/2012, 17829/2011, 20978/2011, 28040/2011, 28212/2011, 28220/2011, 29872/2011
Bench: Justice Ziyad Rahman A.A.