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2026 (5) TMI 31
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....2025. - -<br>Customs<br>HON'BLE MR. JUSTICE V. KAMESWAR RAO AND HON'BLE MR. JUSTICE VINOD KUMAR W.P.(C) 11126/2025 CM Appl. 45750/2025, W.P.(C) 11127/2025 CM Appl. 45752/2025, W.P.(C) 11128/2025 CM Appl. 45754/2025, W.P.(C) 11129/2025 CM Appl. 45756/2025, W.P.(C) 11130/2025 CM Appl. 45758/2025, W.P.(C) 11131/2025 CM Appl. 45760/2025, W.P.(C) 11132/2025 CM Appl. 45762/2025, W.P.(C) 12998/2025 CM Appl. 53203/2025, W.P.(C) 12999/2025 CM Appl. 53206/2025, W.P.(C) 13001/2025 CM Appl. 53212/2025, W.P.(C) 13002/2025 CM Appl. 53214/2025, W.P.(C) 13003/2025 CM Appl. 53216/2025, W.P.(C) 13004/2025 CM Appl. 53218/2025, W.P.(C) 13005/2025 CM Appl. 53220/2025, W.P.(C) 13006/2025 CM Appl. 53222/2025, W.P.(C) 19108/2025 & CM Appl. 79511/2025, W.P.(C) 19110/2025 & CM Appl. 79514/2025, W.P.(C) 19111/2025 & CM Appl. 79516/2025, W.P.(C) 19112/2025 & CM Appl. 79518/2025. Rajasthan Metals, Micro Coils And Refrigeration Pvt Ltd., Mardia Metals, Spirotech Heat Exchange Pvt. Ltd., Havells India Limited, Pankaj Metals, Pallavi Copper Pipes Pvt Ltd., Honeycool Hvac Industries Llp, Zeco Aircon Limited, Bmr Hvac Limited, Heat Craft Industries, Fitspark India Private Limited Earlier Known As Rpa ....
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....3 of the Additional Commissioner of Customs, Jaipur whereby, all imports of copper tubes and pipes have been directed to be cleared without granting the benefit of the AIFTA on provisional basis upon furnishing bank guarantee and bond. SUBMISSION ON BEHALF OF THE PETITIONERS 2. Mr. Balbir Singh, learned Senior Counsel for the petitioners along with Mr. Udit Jain has fairly submitted that the aforementioned writ petitions have a common factual background and has argued the above writ petitions collectively. 3. He submitted that there is no effective and efficacious and alternative remedy available with the petitioners and hence these writ petitions are maintainable. He stated that since the issue herein pertains to the AIFTA which the respondents herein have failed to follow and therefore, a question which is purely treaty based has arisen, therefore, this Court ought to entertain the present petition under Article 226 of the Constitution of India. 4. He has placed reliance placed upon a Supreme Court decision in the case of Kothari Metals Civil Appeal No. 9010 of 2019 dated 25.11.2019 which was an appeal of a decision of the Bombay High Court in the case of Purple Produ....
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....n High Court had admitted the said petitions. Since, these set of petitions share the same set of facts it was submitted by Mr. Balbir Singh that there is no alternative remedy available and these present petitions before this Court are maintainable. 6. Mr Balbir Singh has stated that the impugned show cause notices in paragraph 6.2 stated that the AIFTA does not provide for proper framework for verification and in light of these limitations, the respondents have adopted their own formula to determine the RVC. 7. According to him, if at all there were any shortcomings in AIFTA, then it was for the Government of India to address those shortcomings through a proper mechanism and in absence of any directions to this effect, from the Government of India and its counter party, the AIFTA is still valid. The validity of the AIFTA is further confirmed by the respondent no. 2 in its reply and thus, the averment of respondent no. 5 that there is a lacuna in the treaty, is without any basis. This factum has also been recognised by the Rajasthan High Court in its order dated 26.08.2025 wherein the respondents have highlighted a lacuna in the AIFTA and the overreach of their jurisdiction ....
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....eates a dispute between the two countries, which has to be resolved inter se between the States through respondent no. 2 under the treaty mechanism and the customs authorities have no jurisdiction to unilaterally reject the benefit of the treaty without following the due process of verification. Accordingly, he stated that the impugned show cause notices rejecting the benefit of treaty, are bad in law. 11. Mr. Balbir Singh has argued that it is nobody's case that the Customs Authorities cannot investigate the genuineness of COO or issue show cause notices. He stated that the respondents can issue show cause notices only after following due process of verification of COO as per AIFTA, Rules of Origin 2009, the CAROTAR read with Section 28DA of the Act. He has stated that the process for verification under the AIFTA, read with ROO are as follows:- i) The importing party may request a retroactive check at random and / or when it has reasonable doubt regarding the authenticity of the document or the accuracy of the information regarding the true origin of the Goods in question. ii) The issuing authority shall conduct a retroactive check on the producers'/exporters'....
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....prescribed under the said formula. In this regard he has made a reference to paragraphs 5.1, 5.2, and 6.2 of the show cause notices. He stated that the respondents have devised an unauthorised method for computing RVC and on the basis thereof concluded that the goods do not satisfy the minimum regional content threshold of 35%. Such action is ex facie contrary to the provisions of AIFTA read with the ROO. 14. Mr. Singh has argued that the impugned action of the respondents in redetermination of RVC is barred on the principles of res judicata since the impugned show cause notices are in direct contradiction to the categorical findings recorded by the DGTR vide notification dated F.No.04/10/2020 dated 31.01.2022 in the Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidised Articles and for Determination of Injury) Rules, 1995 proceedings ("CVD") including the very same Vietnamese Exporters, Jintian Copper Industrial, (Vietnam) Co. Ltd. and Vietnam Hailiang Co. Ltd. wherein the DGTR in the final findings had examined the entire volume and value of export sales disclosed by the responding Vietnamese exporters and upon verification of their dat....
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..... Singh is of the view that the respondents have rejected the benefit of COOs without any basis whatsoever. The flaw with which the show cause notices suffer from is that they are cryptic and vague and hence liable to be set aside on this ground alone. In this regard he has placed reliance on the decision of CCE v. Brindavan Beverages (P) Ltd., (2007) 5 SCC 388. The COOs have been issued by the issuing authority in the exporting country which are still valid and binding upon the respondents and the issuing authority has affirmed the genuineness of COOs vide letters dated 06.12.2024 and 28.08.2025. It is his case that the show cause notices unilaterally reject valid COOs without providing any reasons. 17. It is the case of Mr. Singh that the petitioners have fulfilled all the conditions for availing the benefit under Notification No. 46/2011 dated 01.06.2011 read with Notification No. 189/2009 dated 31.12.2009 as they have satisfied all the three conditions of the aforesaid notification being; the imported goods are notified; the imported goods originated from Vietnam and; the COOs issued by the competent authority stated that the imported goods originated from Vietnam and the sa....
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....no verification was undertaken in accordance with the procedure prescribed under the CAROTAR. 21. Furthermore, the issuing authority vide its aforesaid letters confirmed that the COOs are genuine and valid and thus on this verification alone the provisional assessment of the bills of entry on furnishing of bank guarantee and bond would be in violation of Rule 6 of CAROTAR. Hence, it is submitted that the impugned letter dated 05.07.2023 ought to be set aside and the bills of entry ought to be finally assessed and granted the benefit of the aforesaid notification. He also stated that the bank guarantees along with the bond should be returned back to the petitioners. 22. Lastly, on the issue of territorial jurisdiction Mr. Singh has argued that these petitions are maintainable under Article 226 of the Constitution of India since the partial cause of action has arisen within the territorial jurisdiction of this Court as the registered offices of the petitioners are in Delhi; the AIFTA has been signed by the Ministry of Commerce which is based in Delhi and; the petitioners have imported the goods at ports being the inland container depots which fall within the territorial jurisdi....
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..../2025 to buttress his submissions. 26. Additionally he has relied upon a judgment of the Supreme Court in the case of Rajendran Chingaravelu v. R.K. Mishra Additional Commissioner of Income Tax (2010) 1 SCC 457, to state that the Supreme Court in that case had held that the High Court exercising jurisdiction in relation to the territories within which the cause of action arises wholly, or in part will have jurisdiction. He has also referred to the judgements in the cases of Om Prakash Srivastava v. Union of India and Another (2006) 6 SCC 207, Navinchandra N. Majithia v. State of Maharashta and Others (2000) 7 SCC 640 and Kusum Ingots & Alloys Ltd. v. Union of India (2004) 6 SCC 254. With regard to the merits of the petition Mr. Bhandari has stated that he wishes to adopt the submissions made by Mr. Balbir Singh. SUBMISSIONS ON BEHALF OF THE RESPONDENTS 27. Mr. N. Venkataraman, learned ASG appearing on behalf of the respondent nos. 1 and 3, being the Ministry of Finance through its Secretary and the Director of International Customs Division, Central Board of Indirect Taxes in W.P.(C) 11129/2025, submitted that the stance of the aforesaid respondents be treated as one acros....
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.... the importing party may request a retrospective check in case where there is a reasonable doubt. 30. Mr. Venkatraman has pointed out to the fact that the language of the AITIGA specifically uses the work "may" instead of "shall", which is indicative that the mechanism for requesting official verification is facilitative in nature and is not an obligatory pre-requisite. In other words, where Customs has reasons to believe that the goods do not qualify the AITIGA does not procedurally bar India from denying the preferential benefit. The intent of the agreement is only to encourage cooperation through verification but it stops short of legally requiring an importing country in this case being India to obtain confirmation from the exporting country before refusing the benefit. In practice, the Indian Customs Authorities usually seek clarification from the importer and/or through the inter-governmental verification procedure in cases of doubt, the agreement itself does not impose an absolute mandate to conduct a foreign verification enquiry prior to denial. The verification process is a right and a tool available under the agreement but it is not a binding one. 31. Once India cho....
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....decision of the importing country. 34. Mr. Venkaraman is of the view that the overall language of these rules confirm the facilitative intent behind these frame work. These rules are designed to assist in determining or ascertaining the truth through documentary checks, facilitating correspondence between the authorities of the two countries including on site visits to ensure the genuineness of the origin of goods. This procedure makes sure that only the genuine goods are given preferential treatment while the wrongfully claimed goods are not. Nothing in the AITIGA penalises the importing country for not invoking verification in a particular case. In fact on the contrary the AITIGA's framework provides that if cooperation is not extended by the exporting country the importing country can ultimately refuse preference. According to him this procedure is only there to help the verification of fact and not act as a curtailment of the powers of the importing country. Although these facilitative mechanisms bind both the parties to certain duties and obligations, it has to be noted that these rules do not bind India in a manner that India must always pursue verification or refrain from....
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.... recover normal duties. This he stated is a lawful and a necessary step aligned with the AITIGA. This procedure gives an opportunity to the importer to rebut the findings by producing clarification or evidence in response to the allegation. Therefore, he stated this mechanism integrates the spirit of the AITIGA rather than conflicting with the domestic statutory requirement. 38. Mr. Venkatraman has also raised an issue with regard to the maintainability of the present petition since according to him a writ petition challenging a show cause notice is not maintainable in the ordinary course particularly when the statute provides a clear adequate alternative remedy. In the context of show cause notices issued for denial of benefits under the AITIGA the importer has an effective statutory remedy which entails that the noticee file a response to the show cause notice and contest the findings before the adjudicating authority. Upon receipt of a reasoned order if the noticee still feels aggrieved then an appeal can be preferred through the mechanism as established under the Act. Mr. Venkatraman has pointed out to the fact that the Indian Courts have consistently held that it is inappro....
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....of these petitions and has further stated that AIFTA has been signed by India and the ASEAN countries in the year 2009 and under its provisions, there is a dispute settlement mechanism, which is available between the States and there is no explicit or implicit reference that allows application of this dispute settlement procedure for resolution of disputes raised by an individual or private entity. 41. He has relied upon a judgment of Supreme Court in the case of Union of India v. Agricas LLP, 2021 (14) SCC 341 to state that trade agreements between two sovereign nations are instruments of international law and do not create any direct private rights. The Trade Agreement establishes obligations between States and provides for a government to government consultation and dispute resolution mechanism and as such, no enforceable rights are conferred upon any private entities to challenge such a provision of the agreement against the State. Even if a private entity wishes to challenge this instrument, they must in the context of India, lay a challenge to a domestic instrument or against a decision taken within the scope of the trade agreement. According to him, a decision concerning ....
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.....P.(C) 11128/2025, W.P.(C) 11129/2025, W.P.(C) 11131/2025; respondent nos. 5 & 6 in W.P.(C) 11132/2025 and respondent no. 5 & 7 in W.P.(C) 13005/2025 and W.P.(C) 13006/2025 on behalf of the Customs and has submitted that the present petition is not maintainable as the petitioners have alternative remedies under the Act available to them. The petitioners have been issued show cause notices and subsequently, personal hearings have been given, however, the petitioners have chosen not to reply to the said show cause notice and to participate in the adjudicating proceedings. The petitioners have sought to bypass the entire adjudicatory process by directly invoking Article 226 of the Constitution of India. According to him, these petitions are nothing but an abuse of process of law, which is impermissible save for the fact that if there is any exceptional jurisdictional error or if there is any violation of the principles of natural justice, which in this case have not been made out. In support of his submission, he has relied upon the judgments in the cases of Titaghar Paper Mills Co. Ltd. v. State of Orissa, 1983, (2) SCC 433, CIT v. Chhabil Das Aggarwal, 2014 1 SCC 403, State of Goa v....
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....R states that the copper used in the production of the copper tubes and pipes meets the RVC requirements under the AIFTA. Although, the authorities have reason to believe that the copper is not being imported from Indonesia and FORM-I has been wrongly declared in order to gain benefits under the AIFTA. As per Mr. Singla, a letter dated 24.05.2023 was issued to the importers for submitting the following documents as per Section 28DA: a) Cost Break up Sheet from the Supplier from 2019 onwards to till date (as per Calendar Year and Financial Year). b) Cost of goods supplied by overseas supplies by indicating the Quantity, Cost of Raw Materials, Labour Cost and Overhead expenses. c) Detailed description about value addition being carried out (From 2018-till date). d) Quantity & Cost of Principal Raw material i.e., Copper Cathodes/Ingots (Purchased & Consumed) and Quantity of Finished Products Copper Tubes/Pipes Manufactured in each accounting Period, from, 2018 to till date. e) Form-I for the imports made. f) Value and quantity of total raw material showing country of origin of the raw material as mentioned in point 4 above, by givi....
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.... Ltd. RVC ANALYSIS (Amount in VND Lakhs) S.No. Particulars 2019 2020 2021 2022 2023 A Total Raw Material Cost 22970105.54 33272644.18 58789335.22 88004282.28 86866265.61 B Cost of Copper Cathode Originated from ASEAN Countries 10,639,743.13 7,676,978.24 17,383,485.76 27,842,531.32 27536888.42 C Cost of Copper Cathode & Other Raw materials Originated from Non-ASEAN Countries 12,330,362.41 25,595,665.94 41,405,849 46 60,161,750.96 59,329,377.19 D FOB Value of Copper Pipes 25,590,732.53 36,935,432.61 61,919,579.34 97,059,509.39 94955816.39 E Non-AIFTA Content Percentage of FOB Value of Copper Pipes 48.18 69.30 66.87 61.98 62.48 TABLE-B M/s. HAILIANG RVC ANALYSIS (Amount in VND Lakhs) S.No. Particular S 2019 2020 2021 2022 2023 A Total Raw Material Cost 93974741.62 96447284.94 84879819.99 122338484.43 125816709.25 B Cost of Copper Cathode Originated from ASEAN Countries 16511836.45 26232185.02 16307580.55 24084834.81 26975897.00 C Cost of Copper Cathode Originated from Non-ASEAN Countries....
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....ul adjudicatory process. It is his case that no cause of action arises within the jurisdiction of this Court wholly or in part nor has it arisen within the jurisdiction of this Court. The entire sequence of events preceding the present proceedings from the issuance of show cause notice to the conduct of adjudication proceedings, the grant of opportunities of personal hearing, to the passing of the impugned order has all been conducted outside the jurisdiction of this Court. The mere fact that the petitioner carries on business or has a registered office in Delhi does not constitute a cause of action. He states that some of the present petitions are liable to be dismissed. In this regard, he has placed on record a chart to show that which petitions out of this batch ought to be dismissed on the grounds of lack of territorial jurisdiction:- S.No Particulars Imports at Office Address SCN issued by 1. Rajasthan Metals vs. Union of India & Ors. W.P.(C)-11126/2025 CM APPL. 45750/2025 CM APPL. 45751/2025 ICD Tughlakabad, New Delhi ICD Garhi Harsaru, Gurugram, Haryana B-34/6, 2nd Floor, G T, Karnal Road, North West Delhi - 110033. Principal Commissioner of ....
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....rhi Harsaru, Gurugram, Haryana ICD Tughlakabad, New Delhi KH NO. 14/12/2, Shamlaka, South West Delhi, New Delhi - 110037 Principal Commissioner of Customs (Import), ICD Tughlakabad, New Delhi 9. Zeco Aircon Limited Vs. Union of India & Ors. W.P.(C)-12999/2025 CM APPL. 53206/2025 CM APPL. 53207/2025 Nhava Sheva Port, Jawaharlal Nehru Port Trust, Maharashtra ICD Garhi Harsaru, Gurugram, Haryana ICD Dadri, Noida, Uttar Pradesh Office No. 105, First Floor, Padma Tower 1, Rajendra Place, Patel Nagar, New Delhi - 110008 Commissioner of Customs NS-III, Jnch, Nava Sheva Port, Maharashtra 10. BMR HVAC Limited Vs Union of India & Ors. W.P.(C)-13001/2025 CM APPL. 53212/2025 CM APPL. 53213/2025 ICD Tughlakabad New Delhi Nhava Sheva Port, Jawaharlal Nehru Port Trust, Maharashtra ICD Dadri, Noida, Uttar Pradesh ICD Patparganj, New Delhi Plot No. M-137, M1DC, Waluj, Aurangabad, Maharashtra, 431136 Principal Commissioner of Customs (Import), ICD Tughlakabad, New Delhi 11. Heatcraft Industries Vs Union of India & Ors. W.P.(C)-13002/2025 CM APPL. 53214/2025 CM APPL. 53215/2025 ICD Tughlakabad, New Delhi Plot No. 3/26 Ajanta Industrial Co....
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....i, Delhi, 110019 Principal Commissioner of Customs (Import), ICD Tughlakabad, New Delhi 19. Epack Durable Limited Vs Union of India & Ors. W.P.(C)-19112/2025 CMAPPL. 79518/2025 CM APPL. 79519/2025 ICD Dadri, Noida, Uttar Pradesh ICD Garhi Harsaru, Gurugram, Haryana Chennai Sea Port, Chennai, Tamil Nadu ICD Tughlakabad, New Delhi Delhi Air Cargo, Delhi A-1, A-2, Elcina Cluster, Salarpur, Bhiwadi, Rajasthan -301019 Principal Commissioner of Customs, Noida 55. Furthermore, it is settled law that a writ petition does not lie against a show cause notice until and unless it is demonstrated that the notice is issued without jurisdiction or if there is a patent violation of principles of natural justice and in this case, Mr. Singla has argued that there is no violation of either of the aforementioned. 56. In this regard, he has relied on Articles 7 and 14 of the AIFTA and the ROO of the AIFTA, more specifically, at Rules 1(c), 1(d), 1(e), 4, 12, 13 and Appendix D read with Articles 15, 16 and 20 for implementation of Rule 8(c). Additionally, he has also drawn our attention to the CAROTAR, more specifically, to Rules 3(a), 3(c), 3(d), 4, 5, 6 and 8 read with Fo....
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....e, the AIFTA is enforceable in India only to the extent that the Act, more specifically, Section 28DA read with ROO and the CAROTAR. 60. He has placed reliance on the judgments in the cases of Purple Products Private Limited (supra), and Trafigura India Pvt. Ltd. (supra) to state that a mere production of COO does not confer an indefeasible right to claim preferential tariff treatment. According to him, the COO is only a prima facie evidence of origin and the importing countries' customs authorities are legally empowered to verify whether the substantive ROO including RVC requirements are actually satisfied or not. The Courts have in the said judgment recognised that the burden of establishing eligibility for preferential treatment lies squarely on the importer and the custom authorities are not bound to grant preferential treatment, merely because the COOs have not been cancelled by the issuing authorities. The Courts have also held that the issues relating to origin verification and value addition involve disputed questions of fact which may be examined in an adjudication proceeding and are not amenable to writ jurisdiction. He has stated that the issuance of show cause notice....
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....resort to foreign authorities. Also, the terminology in Rules in every aspect includes "may", which clearly states that is exhaustive and not conclusive. In the present case, the petitioner sought and analysed extensive information from the importer and supplier and this was sufficient to form a prima facie view and hence, no violation of the OCP has occurred. In this regard, he states that the Article 16 of the AIFTA is synchronised with Section 28DA of the Act and the CAROTAR. 65. He stated that Article 24 of the AIFTA which is the dispute settlement mechanism is not a bar to domestic verification procedure. It is his case that Article 24 only applies between sovereign contracting states and not to importer specific verification or adjudication under Domestic Law. The importer cannot compel that Indian customs authorities to invoke diplomatic or treaty dispute mechanism. 66. Mr. Singla stated that the respondents sought information under Article 16(b) and Section 28DA of the Act and the information was supplied and analysed by the respondents thoroughly and after the said analysis and compliance to the statutory requirements. 67. Mr. Singla submitted that in the instant ....
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....onsistent method based on generally accepted accounting principles and must produce documentary evidence of the operation of that method so that the respondents can verify the origin claims. 71. Mr. Singla has stated that the audited financial statements of M/s. Jintian Copper Industrial (Vietnam) Ltd., which is the foreign supplier of the petitioner follows the Perpetual Weighted Average Method for inventory valuation. In the case of M/s. Hailiang Vietnam Copper Manufacture Co. Ltd., which is the other foreign supplier of the petitioner has not shown, which method they use for inventory management. Under the system, the origin ration of ASEAN and Non-ASEAN cathodes necessarily changes with new receipt and export consignments must reflect the average ratio prevailing at the time of production. With this, Mr. Singla states that one can infer that every new receipt of cathodes changes the average cost and the average origin ration of the entire stock pool. Once the factory takes copper cathodes out of stock to make tubes, it does not use the original price of origin of each shipment instead it uses the blended average cost and blended origin ratio of the whole stock at a moment. S....
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.... to whether the RVC criterion under AIFTA has been correctly fulfilled. When fungible originating and non-originating inputs are mixed and the exporter failed to substantiate with verifiable records the method of accounting segregation such omissions creates a reasonable doubt for customs regarding whether the RVC criteria was correctly met when ASEAN originating and non-ASEAN originating cathodes were mixed. The law places the onus on the importer to prove fulfilment of RVC beyond doubt and in the absence of such proof, the respondent is justifying in questioning the origin claim. The petitioner's failure to produce inventory based evidence as required under Rule 12 raises a reasonable doubt and therefore, the respondent has appropriately issued a show cause notice calling upon the petitioner to respond to the same and provide necessary information if available for due adjudication. 74. The contentions raised by the petitioner in regard to the Free on Board (FOB) value the manner of computation of RVC the insistence on consignment wise calculation and the assertion that value addition exceeds 65% and this raises a pure question of fact which cannot be adjudicated under the writ....
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....accordance with the applicable ROO and whether the importers methodology satisfies the prescribed criteria, such matters which require detailed examination of evidence fall within the exclusive domain of adjudication proceedings. These issues cannot be conclusively determined in the present writ proceedings. Accordingly, the challenge to the show cause notice on the ground of alleged errors in FOB valuation or RVC computation is premature and misconceived. In such circumstances, the respondents are fully justified in seeking corroborative evidence such as manufacturer invoices, back to back purchase orders and shipping documents to establish a clear correlation between the goods imported and those certified for preferential origin. 79. As per Mr. Singla the investigation further revealed that FORM-I declaration under the CAROTAR were mechanically filled by the importer claiming compliance with the RVC requirement without furnishing verifiable supporting data. Such unsupported declaration defeats the very object of the CAROTAR which places an affirmative obligation on the importer to truthfully and correctly substantiate the origin claims. Such misuse itself constitutes an indepe....
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....s submitted that in the present case, all the substantive evidence in the form of COOs, invoices, Form-I etc., have been provided to the customs authorities. Further, the exporters have also submitted workings showing the AIFTA content is more than 35% in the case of direct formula and less than 65% in the case of the indirect formula. It is his case that the issuing authority in Vietnam, i.e., respondent no.4 has issued a letter dated 28.08.2025 stating that all the COOs in respect of the impugned goods consigned to the petitioners are genuine and satisfy the RVC contents. Thus, all the substantive evidence supports the fact that COOs are genuine and same cannot be unilaterally denied without any basis. 83. Mr. Balbir Singh has stated that the primary grievance in the present petition is that the due process of verification as envisaged in the treaty and incorporated in the domestic law has not been followed. The ROO must be followed and the denial of the benefits thereof have been done in complete contravention of the same and no explanation has been provided by the issuing authority. The petitioners' primary case is not that the proper course which has not been followed in th....
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....es has been rejected on the sole ground of the impugned goods not satisfying the condition of the RVC addition of 35%. It is his argument that the petitioner have challenged the show cause notices as being issued wholly without and in excess of jurisdiction with a premeditated mind. The petitioners have also challenged the letter dated 05.07.2025 of the Additional Commissioner of Customs, Jaipur whereby all the imports of the copper tubes and pipes have been directed to be cleared without granting the benefit of the AIFTA on a provisional basis upon furnishing of bank guarantee and bond. 87. Mr. Balbir Singh has rebutted the submissions of the learned ASG on the issue of the dispute settlement mechanism under the AIFTA and on the issue of the compliance under Articles 16 and 17 of the AIFTA, by stating that the writ petition are not only challenging the violation of Article 24 of Appendix D of the AIFTA. These petitions have also laid a challenge to the show cause notices since they have been issued after not following the due process of law for verification. The show cause notices at paragraph 6.2 record that the AIFTA does not provide for proper frame work for verification, th....
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....TA ROO, CAROTAR read with Section 28DA(4) of the Act. Even the instruction No. 19/2022-Customs dated 17.08.2022 and Instruction No. 23/2024-Customs dated 21.10.2024 states that in case of any dispute AIFTA is to be followed and verification or to be in terms of the AIFTA. 91. Articles 16 and 17 of the AIFTA provides the procedure for verification of this COOs to state that the importing party shall request a retroactive check when it has reasonable doubt as to the authenticity of the document or as to the accuracy of the information regarding the true origin of the good in question. The issuing authority shall conduct a retroactive check on the producer/exporter's cost statement based on the current cost and prices within a six months' time frame prior to the date of exportation. The issuing authority is required to respond to the request promptly and reply within three months after the receipt of the request for a retroactive check. In cases where there is reasonable doubt with regard to the authenticity or accuracy of the document the Customs Authorities of the importing country may suspend the provisions of the preferential tariff treatment while awaiting the result of verifi....
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....of the AIFTA read with ROO in case the information provided by the importer is not sufficient or the proper officer is not satisfied. According to him the word "may" has to be read "shall" and verification process as prescribed under the AIFTA read with ROO has to be mandatorily followed by the respondents before the issuance of the impugned show cause notices. 94. According to him the verification process is mandatory has been confirmed by this Court in Bullion and Jewellers Association vs. Union of India, 2016(335) E.L.T. 639 (Del.) and Noble Import Pvt. Ltd. v. Union of India 2015 SCC OnLine Hyd 411 Instruction No. 19/2022-Customs dated 17.08.2022 and Instruction No. 23/2024-Customs dated 21.10.2024 and hence the submission of the respondent that the verification process is optional is not tenable. 95. In any event if it is assumed that the interpretation of the respondent Nos. 1 and 3 is correct then even as per their own interpretation the present case is not sustainable because the customs authority did in fact seek verification and exercised the option or verification through international customs in terms of the instruction and the issuing authority in the exporting c....
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....ndent in paragraph 4 of the show cause notices stated to have reached out to the International Customs Cell for verification of the COOs as per the CAROTAR and Section 28DA of the Act. However, there is no whisper of subsequent development in this regard in the show cause notices and it can be assumed that International Custom Cell has not considered this as a violation of the provision of treaty. Since, there was no response, the respondents have acted suo moto without jurisdiction. 98. Mr. Singh has also reiterated his argument that there is no alternate remedy available to the petitioners, since, these petitions pertain to the enforceability of the AIFTA and the consequent denial of the AIFTA benefits and suspension of the same without verification. In this regard, he has referred to the judgment in the case of Kothari Metals (Supra) wherein, it was held that where the challenge concerns the efficacy or applicability of an International Treaty, the adjudicating authority under the Act cannot assume jurisdiction. In this regard, he has also drawn an analogy to the orders of the Rajasthan High Court dated 26.08.2025, where similarly placed petitioners have challenged similar sh....
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....ng authority for a decision, we deem it appropriate to decide all the writ petitions. The decision in the said petition must not be construed that this Court has accepted the maintainability of the said petition. 103. The submission of Mr. N. Venkataraman is primarily that the challenge in these petitions is to the show cause notices issued by the respondents and as there is no decision on the show cause notices, the petitions are pre-mature and this Court shall not entertain the same and must relegate the petitioners to the adjudicating authority who has issued the show cause notices to follow the process and take a decision. This plea of Mr. N. Venkataraman is appealing to this Court. This we say so, for the reason that similar show cause notices were also subject matter of a batch of writ petitions before the High Court of Rajasthan in M/s. Krn Heat Exchangers and Refrigeration Limited v. Union of India & Others, 2026:RJ-JP:15051-DB, which have been decided by the Court, accepting the plea advanced by the same respondent(s) therein by holding in the order dated 10.04.2026, as under:- "Learned Additional Solicitor General appearing on behalf of the respondents submits....
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.... show cause notice and in case any adverse order is passed against the Appellant, then liberty has been granted to approach the High Court... ...in our view, the High Court was absolutely right in dismissing the writ petition against a mere show cause notice." It is thus well settled that writ petition should normally not be entertained against mere issuance of show cause notice. In the present case no show cause notice was even issued when the High Court had initially entertained the petition and directed the Department to prima facie consider whether there was material to proceed with the matter." 105. The ratio in the aforesaid judgment has been reiterated by the Supreme Court in the case of M/s Trillion Lead Factory Private Ltd. v. Superintendent of Central Tax, SLP (C) 7101/2026, the relevant part of which reads as under:- "4. It is trite law that no writ lies against an issuance of show cause notice and such writ petition would not be maintainable. This position has been explained to by this Court in the case of Secretary, Ministry of Defence and Others v Prabhash Chandra Mirdha, (2012) 11 SCC 565 and in the judgment of Commr. Of Central Excise C....
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.... action taken by the Customs authorities under the provisions of the Customs Act. The exercise of powers by them would not render without jurisdiction on such score. xxx xxx xxx (xiv) Non-compliance of the time limit for investigatory action under the Operational Procedures would not render the action taken under substantive law, for, the procedural aspects stand subordinate to substantive provisions." (Emphasis supplied) 108. Even the Bombay High Court, while deciding the case of Purple Products Private Limited (supra) wherein a similar issue arose involving import of tin ingots while referring to the judgement in the case of Trafigura India Pvt. Ltd. (supra), has held as under:- "51. Incidentally, the Government of India did enact the Customs Tariff (DOGPTA) between ASEAN and Republic of India Rules, 2009 to give effect to the provisions of AIFTA. However, these rules provide no statutory recognition to Article 24, which, according to the Petitioner, contains a specialised dispute resolution mechanism intended to displace the municipal or domestic laws already in force. Therefore, the provisions of Article 24 of AIFTA cannot be said to have ....
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....ubts about whether the provisions of Article 24 of the AIFTA would apply at all, given that there was no dispute about the origin of the goods being from Malaysia. The Court noted that the misrepresentation and fraud were not about the origin of the goods, but rather the core aspect related to the misrepresentation and fraud concerning the RCV content. In any event, the decision proceeds to reason that even otherwise, the Article could not be invoked to scuttle the operation of the national laws. 58. The argument based on the introduction of Chapter VAA in the Customs Act, effective from 27 March 2020, cannot be accepted. Based on the provisions of Section 28DA, we cannot infer that the pre-amended provisions of the Customs Act, 1962, prevented the Customs Authorities from exercising powers under Section 28 of the Customs Act and investigating cases of misrepresentation, suppression, or fraud. Certain additional powers have now been conferred upon the Customs authorities. But an inference that the earlier powers were insufficient to deal with cases of fraud, suppression or misrepresentation is untenable. This was not even a contention raised initially in the petitions, but....