W.P.(C) 10535/2019 Page 1 of 22

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* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment reserved on: 17.08.2026

Judgment pronounced on: 02.09.2026

Judgment uploaded on: 02.09.2026

# CNR No. DLHC010394992019

+ W.P.(C) 10535/2019 and CM APPL. 6825/2020

M.M. CERAMICS & FERRO ALLOYS .....Petitioner

Through: Mr. Prithwiraj Choudhuri, Ms.

Kausarjahan Sayed and Mr.

Sujoy Chatterjee, Advs.

versus

UNION OF INDIA & ORS. .....Respondents

Through: Ms. Anushree Narain, SSC with

Mr. Apurv Yadav, Adv.

CORAM:

HON'BLE MR. JUSTICE ANIL KSHETARPAL

HON'BLE MS. JUSTICE SHAIL JAIN

J U D G M E N T

ANIL KSHETARPAL, J.:

1. At the outset, we deem it pertinent to note that the present

Petition, as it stood filed originally, challenged the proceedings arising

out of Impugned Show Cause Notices (SCNs) dated 07.12.2018

issued by ICD, Tughlakabad, and 11.12.2018 issued by ICD

Patparganj. The said SCNs came to be issued against the Petitioners

for availing the concessional rate of Basic Customs Duty (BCD) at 0%

under Notification No.46/2011-Cus. Dated 01.06.2011 [hereinafter

referred to as „subject Notification‟], in connection with import of Tin

Ingots from a Malaysian entity, namely, M/s Malaysia Smelting

Corporation (MSC).

W.P.(C) 10535/2019 Page 2 of 22

2. However, during the pendency of the present Petition, this

Court was apprised that, pursuant to the aforesaid SCNs, the Office of

the Principal Commissioner of Customs had proceeded to pass

adjudication Orders, namely, the Order-in-Original (OIO) dated

27.09.2019 in respect of SCN dated 07.12.2018, and OIO dated

05.07.2019 in respect of SCN dated 11.12.2018. Consequently, the lis,

in the present proceedings, stands crystallised around the aforesaid

OIOs, which now constitute the subject matter of challenge.

BRIEF BACKGROUND:

3. The controversy in the present proceedings arises out of the

availment of preferential customs duty on High Grade Tin Ingots

manufactured in Malaysia by MSC. The dispute, at its core, concerns

the validity and correctness of the Certificates of Origin (COO) issued

by the Ministry of International Trade and Industry, Malaysia

[hereinafter referred to as „MITI‟], the methodology adopted for

computation of the Regional Value Content (RVC) of the goods, and,

consequently, the Petitioner‟s entitlement to the preferential tariff

benefit extended under the ASEAN-India Free Trade Area framework

[hereinafter referred to as „AIFTA‟].

4. The relevant facts, which have ultimately brought the parties

before this Court, may be noticed hereunder.

Statutory and Regulatory Framework

5. The Central Government, in exercise of powers conferred under

Section 5(1) of the Customs Tariff Act, 1975, notified the Customs

W.P.(C) 10535/2019 Page 3 of 22

Tariff [Determination of Origin of Goods under the Preferential Trade

Agreement between the Government of Member States of the ASEAN

and the Republic of India] Rules, 2009 [hereinafter referred to as

„Rules of Origin 2009/ RoO 2009‟] vide Notification No.189/2009-

Cus. (N.T.) dated 31.12.2009. The said Rules prescribe the criteria and

conditions governing the determination of the origin of goods for the

purposes of extending preferential tariff treatment to eligible imports

in India.

6. Under the aforesaid regime, a COO issued by the Designated

Authority (DA) of the exporting country constitutes the documentary

basis for claiming preferential treatment. The purpose of the COO is

to certify that the goods in question satisfy the applicable RoO,

thereby enabling the exporter to avail the preferential rate of duty

prescribed under the subject Notification.

7. However, the benefit of such preferential rate of duty is

conditional upon the imported goods fulfilling the origin criteria

prescribed under RoO, 2009. In respect of goods that are not wholly

obtained or produced in the exporting country, the Rules prescribed,

inter alia, a minimum Regional Value Content (RVC) of 35% of the

FOB value, in addition to the prescribed change in tariff classification

in respect of non-originating materials.

8. Additionally, the RoO, 2009 also contains a structured

mechanism for verification of the correctness and authenticity of a

COO. Article 16 of Annexure-III thereto, provides for a retroactive

check of the origin documents through the competent authority of the

W.P.(C) 10535/2019 Page 4 of 22

exporting country. Where, in exceptional circumstances and subject to

the conditions prescribed therein, the importing country remains

dissatisfied with the outcome of such verification, Article 17 provides

for a verification visit to the exporting country. It was within the

framework of these provisions that the subsequent investigation into

the Petitioner‟s claim for preferential treatment came to be

undertaken.

Petitioner’s Import and initial claim

9. Against the aforesaid statutory and regulatory backdrop, the

Petitioner, being engaged, inter alia, in the import and trade of Tin

Ingots, imported High Grade Tin Ingots manufactured by MSC in

Malaysia, on the basis of COO issued by the DA, namely, MITI. It is

on the basis of the said COO that the Petitioner claimed the benefit

under subject Notification and cleared the imported Tin Ingots by

availing BCD at the rate of NIL.

Investigation

10. Subsequently, the Directorate of Revenue Intelligence (DRI),

Mumbai, initiated an investigation into the availment of preferential

benefit by the Petitioner. Since the validity of origin claims reflected

in the COOs had come under scrutiny, the DRI, vide its letter dated

06.04.2018, requested Central Board of Indirect Taxes and Customs

(CBIC) to undertake a retroactive check of the COO, in terms of

Article 16 of Annexure III to RoO, 2009, by forwarding the same to

the competent authorities in Malaysia for verification.

W.P.(C) 10535/2019 Page 5 of 22

11. However, since no response was received from Malaysian

authorities to the aforesaid request, the matter moved to next stage of

verification. A team of officers from DRI, Mumbai, under Article 17

of Annexure-III of the RoO, 2009, undertook a verification visit to the

premises of MSC. The purpose of the visit was to examine the

manufacturing process, ascertain the extent of value addition

undertaken in Malaysia, scrutinise the underlying costing

methodology, and determine whether the imported Tin Ingots satisfied

the prescribed originating criteria.

12. During the course of verification, MSC produced a cost sheet

reflecting costs incurred in production/manufacture of Tin Ingots, over

a period of three (03) months, i.e., July 2013 to September 2013. This

cost sheet was relied upon for calculation/determination of the FOB

value and RVC of the Tin Ingots. However, during verification, it was

noticed that MSC had continued to rely upon the said cost sheets for

obtaining successive COOs over a considerably extended period.

13. On the basis of the said cost sheet, the RVC declared in relevant

Form A1 was claimed to be in excess of 70%, as against the

prescribed minimum threshold of 35%. The investigating authorities

found the claimed RVC to be exceptionally high and proceeded to

examine whether the declared percentage truly represented the value

addition attributable to the manufacturing activity undertaken by MSC

in Malaysia.

14. It was further revealed that MSC was undertaking the

manufacture of Tin Ingots on a job-work basis for various

W.P.(C) 10535/2019 Page 6 of 22

traders/suppliers. Under this arrangement, the concerned

traders/suppliers would supply tin ore, originating from non-ASEAN

countries, to MSC free of charge. Whereupon MSC would undertake

the conversion of such tin ore into Tin Ingots against payment of job

charges. Thus, the principal raw material, namely, tin ore, was not

procured by MSC for consideration but was supplied by the

traders/suppliers free of cost, with MSC merely undertaking the

process of conversion into Tin Ingots on a job-work basis.

15. In these circumstances, it was found that the smelting charges

paid by the traders/suppliers to MSC for such conversion actually

represented the regional value addition undertaken in Malaysia.

Accordingly, it was observed that, when the value addition was

assessed with reference to the actual economic activity undertaken by

MSC, the regional value addition, in percentage terms, did not fulfil

the prescribed criteria of origin under the RoO, 2009.

16. Consequently, the investigating authorities proceeded on the

basis that the Tin Ingots so manufactured did not satisfy the prescribed

originating criteria and were, therefore, not eligible for the preferential

rate of customs duty claimed on the strength of the COO.

Accordingly, the Impugned SCNs came to be issued against the

Petitioner, demanding differential custom duty under Section 28(4) of

the Customs Act, 1962 [hereinafter referred to as „Act of 1962‟], along

with penalty under Sections 112(a)/114A and 114AA as well as

directing confiscation of imported goods under Sections 111(m) and

111(o) thereof.

W.P.(C) 10535/2019 Page 7 of 22

17. Aggrieved by the issuance of the Impugned SCNs, the

Petitioner approached this Court by way of the present Petition.

Notably, no reply was filed to the SCNs and, despite being granted

various opportunities of personal hearing, the Petitioner failed to avail

same.

18. During the pendency of the present Petition, the parties, by way

of CM Appl. 6825/2020 and Short Affidavit filed to the unamended

Petition, apprised this Court that the proceedings initiated pursuant to

the Impugned SCNs had, in the interregnum, culminated in Impugned

OIOs passed by the Commissioner of Customs.

19. Insofar as SCN dated 11.12.2018 is concerned, the same came

to be upheld by way of the OIO dated 05.07.2019. By this OIO, the

benefit of concessional duty under subject Notification was denied in

respect of the imports covered under five Bills of Entry (BoEs),

confirming the differential customs duty amounting to Rs. 99,84,190/-

along with applicable interest under Section 28AA thereof. The

Adjudicating Authority further ordered confiscation of the imported

goods, valued at Rs.16,77,69,937/-, apart from imposing a penalty of

Rs.99,84,190/- upon the Petitioner under Section 114AA of the Act of

1962.

20. With respect to SCN dated 07.12.2018, an OIO dated

27.09.2019 came to be passed, confirming payment of differential

duty amounting to Rs. 39,69,936/- under Section 28(4) of the Act of

1962, covering short payment made by two (02) BoEs, alongwith the

applicable interest under Section 28AA thereof. However, the

W.P.(C) 10535/2019 Page 8 of 22

proposed confiscation, along with imposition of penalties under

Section 112(a), 114A and 114AA of the Act of 1962 were dropped.

Prior litigation arising out of similar lis

21. Notably, the present controversy is not an isolated one and had

arisen before other Courts prior to the initiation of the present Petition.

Undisputedly, similar proceedings, concerning MCS manufacture Tin

Ingots, MITI issued COOs and a similar verification exercise, had

earlier arisen before the High Court of Judicature at Bombay, in W.P.

No.2831/2018 captioned Purple Products Pvt. Ltd. v. Union of India

& Ors. along with two connected matters.

22. The aforesaid Petitions had been instituted against Show Cause-

cum-Demand Notices seeking benefit of subject Notification for

import of Tin Ingots from Malaysia. The Court vide its Order dated

09.07.2019, dismissed the said Petitions, relegating the Petitioners

therein to the alternative statutory remedy before the Adjudicating

Authority. Aggrieved thereby, one of the Petitioners approached the

Supreme Court by way of SLP(C) No. 20792/2019 captioned Kothari

Metals Limited v Union of India & Ors., wherein the Court, vide its

Order dated 25.11.2019, set aside the Order dated 09.07.2019 and

restored the Writ Petitions to their original numbers for decision on

merits.

23. Following the Order of the Supreme Court, the Bombay High

Court, restored the Petitions to their original numbers and, upon

deciding them on merits, dismissed the same by way of its judgment

dated 13.06.2025.

W.P.(C) 10535/2019 Page 9 of 22

24. In doing so, the Bombay High Court relied upon a detailed

judgment passed by the High Court of Gujarat in Trafigura India Pvt.

Ltd. v. Union of India

1

. The aforesaid judgment also arose out of

import of Tin Ingots allegedly manufactured by MSC, which were

declared in the BoE as being of Malaysian Origin and in respect of

which a COO was produced, leading to availment of concessional rate

of NIL-BCD under subject Notification. Adjudicating upon the

aforesaid factual matrix and upon hearing the parties therein, the

Division Bench of the Court dismissed the Petition therein, upholding

the OIO.

25. The High Court of Gujarat answered the following questions:

“(i) whether it was necessary to go for dispute resolution under the

Article 24 of AIFTA.

(ii) Whether the customs authorities were not entitled to exercise their

powers under the Customs Act, without the importing party/country

first taking recourse to AIFTA Article 24 mechanism; Whether on that

count the proceedings under the Customs Act, 1962, were rendered

without jurisdiction or bad in law.

(iii) whether the customs authorities in India had the jurisdiction to

proceed against the petitioners in wake of provisions of AIFTA

provisions and the Rules of Origin transformed as 2009 Rules;

(iv) whether the respondents were justified in denying the benefit of

exemption in duty to the petitioners availed under the Notification No.

46/2011 dated 1-6-2011;

(v) Whether the respondent authorities could properly proceed under

section 28(4) of the Customs Act, 1962 and whether the invocation of

extended period under sub-section (4) of section 28 of the Act was

proper;

(vi) Whether the alleged breach of time limit of procedural part of

Operational Certification Procedures rendered the action under the

Customs Act, 1962, to be bad in law;

1

(2023) 13 Centax 9 (Guj.)

W.P.(C) 10535/2019 Page 10 of 22

(vii) Whether or not the substantive provisions of Customs Act, 1962,

have dominion effect over procedural aspect of Rules of Origin.”

26. In answering the above questions, the High Court of Gujarat

held that, under Section 28 of the Act of 1962, the Customs

Authorities possessed jurisdiction not only to invoke extended period

under sub-section (4) of Section 28, but also to proceed against the

Petitioners therein, notwithstanding the provisions of the international

agreement, namely, AIFTA.

SUBMISSIONS ON BEHALF OF THE PARTIES :

27. Learned counsel representing the Petitioner admits that the

Petitioner has an alternative remedy of filing an Appeal against the

Impugned OIOs under Section 128 of the Act of 1962. However, he

insisted on the Petition being decided on merits, relying upon the

Order dated 25.11.2019 passed in Kothari Metals Limited (Supra),

whereby the Bombay High Court‟s Order relegating the Petitioners

therein to the alternative remedy was set aside and the writ petitions

ultimately came to be restored for decision on merits. Learned counsel

has primarily made two broad submissions supporting the case of the

Petitioner, which are as follows:

i. the Tin ingots were imported on the basis of COO, issued

by the MITI, and in view of Article 24 of AIFTA the proceedings

initiated under the Act of 1962 are without jurisdiction.

ii. prior to the amendment brought into force by the Finance

Act, 2020 with effect from 27.03.2020, whereby Chapter V-AA,

including Section 28DA, was introduced, the Customs

W.P.(C) 10535/2019 Page 11 of 22

Authorities lacked the requisite statutory power to initiate

proceedings in respect of the preferential tariff claims in

question.

28. Per contra, learned counsel representing the Respondents

placed reliance upon the judgment passed in Trafigura India Pvt. Ltd.

(Supra) and submitted that the Customs Authorities were, even prior

to the 2020 amendment, vested with the requisite statutory powers

under Section 28 of the Act of 1962. It was contended that the

subsequent amendment was merely clarificatory and introduced by

way of abundant caution and did not confer any new or substantive

power upon the Customs Authorities.

ANALYSIS AND FINDINGS:

29. The submissions advanced on behalf of the Petitioner arise in

the backdrop of the decision of the Gujarat High Court in Trafigura

India Pvt. Ltd. (Supra), which came to be followed by the Bombay

High Court in Purple Products Pvt. Ltd. (Supra), on facts that are, in

all material particulars, indistinguishable from those obtaining in the

present case. The aforesaid decisions, also concerned Tin Ingots

manufactured by MSC in Malaysia, cleared on the strength of a COO

issued by MITI, and the subsequent proceedings under Section 28 of

the Customs Act, 1962. While the first ground raised herein, came to

be considered by the Gujarat High Court, answering Question (ii)

noted in the preceding paragraph of this judgment. The second ground

urged in the present case came to be considered by the Bombay High

Court, while also relying upon the scope of Section 28 of the Act of

W.P.(C) 10535/2019 Page 12 of 22

1962 answered by the Gujarat High Court under Question (iv) in

Trafigura India Pvt. Ltd. (Supra).

30. Accordingly, we propose to deal with each submission

advanced by the Petitioners in the light of the reasoning and findings

given in Trafigura India Pvt. Ltd. (Supra) and Purple Products Pvt.

Ltd. (Supra).

Re: Submission (i)- Article 24 of AIFTA

31. The first submission made by learned counsel representing the

Petitioner was considered in Trafigura India Pvt Ltd. (Supra), in light

of the well-settled position that an international treaty, until

transformed into domestic law by legislation, does not by itself confer

rights or obligations enforceable in a municipal court, and does not

operate to curtail or condition powers otherwise validly conferred on a

domestic authority by a domestic statute. Answering this very

submission, the High Court held as under:

“15.9 When AIFTA Article 24 is not part of State law and Indian

law making body has not recognised it for its implementation by

excluding it from statutory law and rules, the proceedings taken

out against the petitioner under the substantive provision of

Customs Act, cannot become bad or stand illegal on their count.”

32. Put summarily, it was held that Article 24 of AIFTA, has not

been incorporated into Indian municipal law by any statute or

subordinate legislation, including the RoO, 2009, which gives partial

effect to AIFTA only for the limited purpose of prescribing origin

criteria, without incorporating the dispute-resolution mechanism

provided thereunder.

W.P.(C) 10535/2019 Page 13 of 22

33. Further, it was also held that an unincorporated treaty

obligation, being binding only as between the Contracting States,

cannot be directly enforced by a private party before a domestic court

so as to displace the jurisdiction conferred by a domestic statute.

Consequently, the exercise of power under Section 28 of the Act of

1962, could not be said to be without jurisdiction, void or otherwise

vitiated merely because Article 24 consultation mechanism had not

been separately invoked.

34. This Court concurs with the view taken by the Gujarat High

Court and see no reason to take a different view therefrom, which has,

in the interregnum, also been followed by the Bombay High Court in

Purple Products Pvt. Ltd. (Supra) on materially identical facts.

Applying the foregoing reasoning, Article 24 of AIFTA, not having

been transformed into or incorporated as part of domestic law, cannot

operate to oust the jurisdiction of the Customs Authorities to proceed

against the Petitioner under the substantive provisions of the Act of

1963. Accordingly, the first submission made on behalf of the

Petitioner, does not merit acceptance and is rejected.

Re: Submission (ii)-Absence of enabling power prior to Section

28DA of the Act of 1962

35. As regards the argument based specifically on the insertion of

Chapter V-AA, it may be noted that Section 28 read with Section 46,

of the unamended Customs Act, 1962 already conferred sufficient

power to recover duties that were short-lived or short-paid by reason

of suppression of facts, independent of any COO specific verification

W.P.(C) 10535/2019 Page 14 of 22

mechanism. The relevant portion of Sections 28 and 46 of the Act of

1962, as they stood at the relevant time, are extracted below:

“28. Recovery of duties not levied or not paid or short-levied or short-

paid or erroneously refunded. —

(1) Where any duty has not been levied or not paid or has been short-

levied or short-paid or erroneously refunded, or any interest payable

has not been paid, part-paid or erroneously refunded, for any reason

other than the reason of collusion or any wilful mis-statement or

suppression of facts —

(a) the proper officer shall, within two years from the relevant date,

serve notice on the person chargeable with the duty or interest which

has not been so levied or paid or which has been short-levied or short-

paid or to whom the refund has erroneously been made, requiring him

to show cause why he should not pay the amount specified in the

notice...

(4) Where any duty has not been levied or not paid or has been short-

levied or short-paid or erroneously refunded, or interest payable has

not been paid, part-paid or erroneously refunded, by reason of —

(a) collusion; or

(b) any wilful mis-statement; or

(c) suppression of facts,

by the importer or the exporter or the agent or employee of the

importer or exporter, the proper officer shall, within five years from

the relevant date, serve notice on the person chargeable with duty or

interest which has not been so levied or paid or which has been so

short-levied or short-paid or to whom the refund has erroneously been

made, requiring him to show cause why he should not pay the amount

specified in the notice.”

“46. Entry of goods on importation. —

(1) The importer of any goods, other than goods intended for transit or

transhipment, shall make entry thereof by presenting electronically on

the customs automated system to the proper officer a bill of entry for

home consumption or warehousing in such form and manner as may

be prescribed...

(4) The importer while presenting a bill of entry shall make and

subscribe to a declaration as to the truth of the contents of such bill of

entry and shall, in support of such declaration, produce to the proper

officer the invoice, if any, and such other documents relating to the

imported goods as may be prescribed.”

W.P.(C) 10535/2019 Page 15 of 22

36. A perusal of the above extracted provisions makes it evident

that the power to recover duty short-levied or short-paid by reason of

suppression of facts, and to invoke the extended period of five years

for that purpose, was very much a part of the unamended Section 28,

read with the declaration obligation under Section 46(4), and was not,

either expressly or by necessary implication, dependent upon a COO-

specific verification mechanism.

37. The insertion of Chapter V-AA and Section 28DA was, as

rightly submitted by learned counsel for the Respondents, in the

nature of an additional and more elaborate procedural mechanism

specifically calibrated to preferential-tariff/COO-verification disputes;

it did not create a power that was, until then, altogether absent, nor did

it curtail or impliedly repeal the pre-existing general power under

Section 28 of the Act of 1962.

38. The submission pertaining to insertion of Chapter V-AA and

Section 28DA to the Act of 1962, was also answered by the Bombay

High Court in Purple Products Pvt. Ltd. (Supra). Dealing with the

aforesaid submission the following finding was recorded, which reads

as under:

“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 is now put forth in an

W.P.(C) 10535/2019 Page 16 of 22

attempt to persuade us not to follow the reasoning of the Gujarat

Judgment.

59. Section 28 of the Customs Act is quite exhaustive, it provides that

where any duty has not been levied or paid etc. on account of

collusion, willful mis-statement, suppression of facts by importer or

exporter etc., the competent officer may act within five years from

the relevant date and serve a notice on the person chargeable with

duty or interest, which has not been paid, the Gujarat High Court

has interpreted the provisions of Section 28 and concluded that

suppression of facts implicatory can be a ground for invocation of

the said provision.”

(Emphasis Supplied)

39. It was held by the Bombay High Court that the introduction of

Chapter V-AA, does not warrant an inference that the Customs

authorities, prior thereto, lacked the power to investigate cases

involving fraud, suppression or misrepresentation. The amendment

may have conferred additional powers upon the authorities, but it

cannot be construed as implying that the powers available under the

unamended Section 28 were inadequate to deal with such cases.

40. Adding force to the interpretation provided by the Gujarat High

Court in Trafigura India Pvt Ltd. (Supra), the Court highlighted that

the interpretation provided thereunder with respect to the

comprehensive structure of enabling power provided under Section 28

of the Act of 1962, cannot be detracted from merely due to the

subsequent introduction of Chapter V-AA.

41. In this regard, a further reference is also made to the discussion

of Gujarat High Court, with respect to the statutory scheme of

Sections 28 and 46 of the Act of 1962, which came to be answered,

while examining Question (v) reproduced under paragraph no.25 of

this judgment. In the course of discussion on the scope of enabling

W.P.(C) 10535/2019 Page 17 of 22

power under Section 28 of the Act of 1962, the following findings

were rendered, which reads as under:

“16.4 Thus, sub-section (4) of section 28 provides that where any

duty has not been levied or not paid, etc., on account of the

reasons of (a) collusion (b) any willful misstatement or (c)

suppression of facts by the importer or exporter or agent or

employee of the importer or exporter, the competent officer may

act within five years from the relevant date and serve notice on the

person chargeable with duty or interest, which has not been paid.

In other words, the provisions of sub-section(4) contemplates

extended period of limitation for taking duty proceeding for non-

payment or short-levy of customs duty.

16.5 Section 28 of the Customs Act is pari materia with Section

11A of the Central Excise Act. In the context Section 28 of the

Customs Act as it existed prior to amendment by Act 8 of 2011, the

Supreme Court, in Aban Loyd Chiles Offshore Limited v.

Commissioner of Customs, Maharashtra [2006 (200) ELT 370

SC/2006 taxmann.com 1790 (SC)), observed that there was

material difference between the provisions in the Customs Act and

that of in Central Excise Act. It was observed that the word „fraud‟

and words „with intent to evade payment of duty‟ occurring in

Proviso 2 Section 11A of the Central Excise Act missing in Section

28(1) of the Customs Act and the Proviso in particular. It was

further observed by the Apex Court that Proviso of Section 28 can

be invoked where the payment of duty has escaped by reason of

collusion or any willful misstatement or suppression of facts, the

Supreme Court stated that, 'sofaras misstatement or suppression of

facts are concerned, they are qualified by the words 'willful. The

'willful preceding the words 'misstatement or suppression of facts'

clearly spells out that there has to be an intention on part of the

assessee to evade the duty.

16.6 The newly substituted Section 28 of the Customs Act by Act 8

of 11, when closely read brings out different situation. In Sub

section (1) of Section 28 it is provided that recovery of duty would

be in respect of duties not levied or not paid etc. for any reason

other than the reasons of collusion or any willful misstatement of

suppression of facts. Therefore the action of recovery under

section 28 will be in respect of duties not levied or not paid or

short levied or short paid or erroneously refunded. The

consideration of (a) collusion or (b) any willful misstatement or (c)

suppression of facts, are mentioned in Sub section (4) to be the

grounds where the notice for recovery is issued invoking the

extended period of limitation. What is noticeable is that collusion

can be the ground to resort to Sub section (4). furthermore, and

W.P.(C) 10535/2019 Page 18 of 22

importantly the word 'willful' does not precede the reason of

'suppression of facts' mentioned in Sub clause (c). In order to

invoke Sub section (4) on the ground of suppression of facts,

element of willfulness can be said to have been done away with.

Suppression of facts simplicitor can be a ground here.

16.7 The suppression of fact is clearly attributed to the petitioners

inasmuch as what was required to be disclosed and proof of

contents of the Bills of Entry was to be subscribed in form of

declaration under section 46 of the Act. The petitioners had been

in regular course of business of import and acted in such course.

They were aware about RVC details which was wrongful and

suppressive. The importer of any goods thereunder is required to

present to the proper officer Bill of Entry for home consumption or

warehousing in the manner prescribed in sub-section (2). The Bill

of Entry shall include all the goods mentioned in the Bill of Lading

or other receipt given by the carrier to the consignee. Under sub-

section (4), the importer while presenting a Bill of Entry has to

subscribe and make a declaration regarding the truth of the

contents of the Bill of Entry. In the present case, the Origin

Certificate containing the RVC value details was part and parcel

of the documents for which truthfulness was declared.

16.8 Sub-section (4) of section 46 reads as under,

“(4) The importer while presenting a bill of entry shall make and

subscribe to a declaration as to the truth of the contents of such

bill of entry and shall, in support of such declaration, produce to

the proper officer the invoice, if any, and such other documents

relating to the imported goods as may be prescribed.”

16.9 The documents relating to the calculation of RVC remained

part of the documents including the Bill of Entry submitted to

claim exemption from Customs duty under the Notification No.

46/2011. The petitioners who were engaged in the import in their

normal course of business could not have been disclaimed the

knowledge that on factual calculation and the criteria adopted, the

RVC was wrongly stated. The petitioners were importers engaged

in similar Import business, were well aware and conversant with

the affairs. When the RVC content was calculated on the basis of

few months of 2013 cost-sheet, the calculation was evidently

erroneous and misapplied, to which the petitioners could not have

disclaimed the knowledge. The petitioners were well aware about

the nature of details given in relation to RVC, which were wrong.

Still however, they suppressed the fact and claimed the benefit of

preferential duty treatment under the Exemption Notification. It

could be said that while presenting the documents including the

RVC content in the Origin Certificate, there was suppression of

facts.”

W.P.(C) 10535/2019 Page 19 of 22

42. At the outset we must highlight that, while arriving to the

conclusion of the enabling power granted under the Act of 1962, the

Court was examining the amended Section 28 as substituted by Act 8

of 2011. Although, the said amendment is not the subject matter of

submissions made by the Petitioner, nevertheless, the reasoning with

regard to the statutory scheme of Sections 28 and 46 cannot be

disregarded. The Court held that, under Section 28(4), the requirement

of wilfulness qualifies „misstatement‟ and not „suppression of facts‟,

and consequently, suppression simpliciter is sufficient to invoke the

extended period. Thus, where the case rests on suppression, a separate

intention to evade duty was not treated as an independent statutory

requirement.

43. Equally significant is the Court‟s reliance upon Section 46(4),

which casts a statutory obligation upon an importer, while presenting

a BoE, to declare the truth of its contents and furnish the documents,

in support thereof. Accordingly, the Court stated that particulars

furnished in support of a preferential claim, including RVC particulars

reflected in the COO, fall within this statutory declaration.

44. Thus, it was held that where an importer, particularly one

experienced in the business of import, furnishes particulars which it

knew, or could not reasonably have been unaware, were incorrect, and

nevertheless claims the benefit of preferential duty, such non-

disclosure or incorrect disclosure may constitute suppression of facts

for the purposes of Section 28(4) of the Act of 1962. The significance

of this reasoning lies in the fact that the statutory obligation to make a

truthful declaration under Section 46(4), and the corresponding power

W.P.(C) 10535/2019 Page 20 of 22

to recover duty under Section 28, existed independently of the

subsequent introduction of the COO-specific verification mechanism

under Chapter V-AA and Section 28DA.

45. In so far as the present controversy is concerned, the analysis of

Gujarat High Court, while dealing with the interplay between Sections

28 of 46 of the Act of 1962, assumes considerable significance. The

Court treated Section 46(4) as imposing a substantive obligation upon

the importer to truthfully disclose the particulars forming the basis of

its claim for preferential treatment, and Section 28 as supplying the

corresponding statutory machinery for recovery where duty had

escaped levy or payment by reason of suppression.

46. Therefore, the later insertion of Chapter V-AA and Section

28DA, cannot by itself be construed as having created, for the first

time, the power of the Customs Authorities to act upon an incorrect or

suppressed declaration made in a BoE. At the same time, the finding

of the Gujarat High Court that suppression simpliciter suffices under

the Section 28(4) must necessarily be understood in the context of the

statutory language applicable to that provision and cannot, without

further examination, be mechanically transposed to the post-amended

provision as argued by the Petitioner. Accordingly, the second

submission made on behalf of the Petitioner, does not merit

acceptance and is rejected.

47. Before parting, it is apposite to note that learned counsel

representing the Petitioner has neither urged that the factual matrix

considered in Trafigura India Pvt. Ltd. (Supra) and Purple Products

W.P.(C) 10535/2019 Page 21 of 22

Pvt. Ltd. (Supra) is materially distinguishable from that arising in the

present case, nor demonstrated any distinguishing feature or infirmity

in the reasoning adopted therein. No such distinction having been

brought to our notice, and upon consideration, we find no material

difference, either on facts or in law, warranting a departure from the

view taken in the aforesaid decisions. We accordingly see no reason to

take a different view in the present case.

48. It is also not disputed that the Petitioner has an efficacious

alternative remedy of statutory appeal against the Impugned OIOs.

Having rejected the sole jurisdictional objections raised on behalf of

the Petitioner, which formed the entire basis on which the present

Petition was pressed on merits, this Court finds no ground to further

examine, in exercise of writ jurisdiction, the correctness of the

quantification of duty, the confiscation of goods, or the imposition of

penalty under the Impugned OIOs. Such factual and valuation-related

contentions are more appropriately examined by the Appellate

Authority under Section 128 of the Act of 1962.

CONCLUSION:

49. For the foregoing reasons, we find no merit in the challenge to

the Impugned SCNs and the Impugned OIOs on the ground of want of

jurisdiction. Both submissions urged on behalf of the Petitioner stand

answered against it by the reasoning in Trafigura India Pvt. Ltd.

(Supra), affirmed in Purple Products Pvt. Ltd. (Supra), with which

we concur.

50. Accordingly, the present Petition, along with pending

W.P.(C) 10535/2019 Page 22 of 22

application, is dismissed, with liberty to the Petitioner to avail the

statutory remedy of appeal against the Orders-in-Original dated

05.07.2019 and 27.09.2019. In the event such appeal is filed within

four (04) weeks from today, the Appellate Authority shall not dismiss

the same on the ground of limitation, provided it is otherwise

maintainable, and shall decide it on merits, in accordance with law.

51. We clarify that we have not expressed any opinion on the merits

of the quantification of duty, confiscation, or penalty under the

Impugned OIOs, and all rights and contentions of the parties in that

regard are left open to be urged before the Appellate Authority.

ANIL KSHETARPAL, J.

SHAIL JAIN, J.

SEPTEMBER 02, 2026

s.godara/hr