2026-VIL-994-DEL-CU
  1. Home
  2. 2026-VIL-994-DEL-CU

CUSTOMS High Court Cases

Customs - Preferential tariff treatment under AIFTA, Jurisdiction of Customs Authorities to recover short-levied duty, Applicability of Article 24 of ASEAN-India Free Trade Area, Scope of dispute resolution mechanism under international treaty - Petitioner imported High Grade Tin Ingots manufactured in Malaysia and availed concessional rate of BCD under Notification No. 46/2011-Cus on the basis of Certificate of Origin issued by the designated authority of Malaysia – DRI noted that the Regional Value Content calculated on basis of a cost sheet was overstated and when assessed with reference to the actual economic activity including job work smelting charges, the regional value addition did not fulfil the criteria of origin under Rules of Origin 2009. The Customs Authorities issued demand notices - Petitioner challenged the proceedings contending that prior to invoking dispute resolution under Article 24 of AIFTA, the Customs Authorities lacked jurisdiction to proceed under Customs Act 1962 - Whether the Customs Authorities in India are required to first invoke the dispute resolution mechanism provided under Article 24 of AIFTA before proceeding against an importer under the Customs Act 1962 for recovery of duty short-levied on account of incorrect particulars in the Certificate of Origin - HELD - 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 powers validly conferred on a domestic authority by domestic statute. Article 24 of AIFTA has not been incorporated into Indian municipal law by any statute or subordinate legislation including the Rules of Origin 2009 which gives partial effect to AIFTA only for the limited purpose of prescribing origin criteria without incorporating the dispute resolution mechanism. An unincorporated treaty obligation cannot be directly enforced by a private party to displace the jurisdiction conferred by a domestic statute - The exercise of power under Section 28 of the Customs Act cannot be said to be without jurisdiction merely because the Article 24 consultation mechanism has not been separately invoked. The substantive provisions of the Customs Act 1962 have dominion over procedural aspects of international agreements where not expressly incorporated into domestic law - Accordingly, Article 24 of AIFTA not having been transformed into domestic law cannot operate to oust the jurisdiction of the Customs Authorities to proceed under the Customs Act 1962. The Customs Authorities were competent to proceed under Section 28 independently of any dispute resolution consultation under Article 24 of AIFTA. The writ petition is dismissed with liberty to file statutory appeal - Customs - Scope of recovery powers under Section 28 of Customs Act 1962 prior to insertion of Chapter V-AA and Section 28DA, Statutory basis for recovery of duty short-levied by reason of suppression of facts - Petitioner contended that prior to the insertion of Chapter V-AA including Section 28DA by the Finance Act 2020 with effect from 27.03.2020, the Customs Authorities lacked the requisite statutory power to initiate proceedings in respect of preferential tariff claims. The Petitioner sought to contend that Chapter V-AA created a new power to verify and recover duty in cases of incorrect preferential tariff claims - Whether the Customs Authorities possessed enabling power under Section 28 of the Customs Act 1962 as it stood prior to the insertion of Chapter V-AA to recover duty short-levied on account of suppression of facts in preferential tariff claims - HELD - Section 28 read with Section 46 of the Customs Act 1962 conferred sufficient power to recover duties that were short-levied by reason of suppression of facts independently of any Certificate of Origin specific verification mechanism. Section 28(4) provides that where any duty has been short-levied by reason of collusion, any wilful misstatement or suppression of facts by the importer, the proper officer shall within five years serve notice. Section 46(4) casts a statutory obligation upon the importer while presenting a Bill of Entry to make and subscribe to a declaration as to the truth of the contents and produce supporting documents. The particulars furnished in support of a preferential tariff claim including Regional Value Content particulars reflected in the Certificate of Origin fall within the scope of documents required under Section 46(4) and form part of the statutory declaration - The suppression of facts contemplated under Section 28(4) is not necessarily qualified by wilfulness and suppression simpliciter can be sufficient to invoke the extended period. Where an importer furnishes particulars which it knew or could not reasonably have been unaware were incorrect and nevertheless claims preferential duty, such non-disclosure may constitute suppression of facts. The insertion of Chapter V-AA and Section 28DA was in the nature of an additional and more elaborate procedural mechanism specifically calibrated to preferential tariff disputes and did not create a power that was until then altogether absent - Accordingly, the Customs Authorities possessed the enabling power under Section 28 read with Section 46 even prior to insertion of Chapter V-AA to recover duty short-levied by suppression of facts. The amendment was merely clarificatory and did not confer any new or substantive power. The grounds challenging the power of Customs Authorities are rejected.
Download File
show more Judgements  

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

GST Critical issues: ITC on...
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?