Rajasthan Metals vs Union Of India & Ors on 28 April, 2026

April 29, 2026

Delhi High Court

Rajasthan Metals vs Union Of India & Ors on 28 April, 2026

1. These petitions have been filed laying challenge to the show cause
notices issued by the respondents wherein, the preferential rate of duties
under the Association of Southeast Asian Nations-India Free Trade

SPONSORED

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Agreement (―AIFTA‖) on the import of copper tubes and pipes has been
rejected on the sole ground that the impugned goods do not satisfy the
condition of the Regional Value Content (―RVC‖) addition of 35%. The
petitioners have challenged the show cause notices on the basis that the
same have been issued wholly without or in excess of jurisdiction and with
presupposed conclusions. They have also challenged the letter dated
05.07.2023 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 Products Private Limited v. Union of Indian & Ors., 2025 SCC
OnLine Bom 2367 to state that the decision therein, unequivocally held that

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where the challenge concerns the efficacy or applicability of an international
treaty, the adjudicating authority under the Customs Act, 1962 (the Act)
cannot assume jurisdiction. The Bombay High Court had at the initial stage
dismissed the petitions on the ground that the petitioners had an alternative
statutory remedy under the Customs Act, 1962. It was the Supreme Court
which had later clarified that treaty based jurisdictional questions fall within
the cognisance of Constitutional Courts and cannot be relegated to the
departmental authorities. The order of the High Court was set aside and the
matter was remanded for adjudication on the threshold issue that existence
of an alternative statutory remedy does not operate as a bar to maintain a
writ petition raising such fundamental questions of law.

5. It was submitted that on exactly the same set of facts and
circumstances, similar show cause notices were issued to other importers by
the Jaipur, Principal Commissioner of Customs who are also respondents in
the aforesaid writ petitions. He stated that the High Court of Rajasthan at
Jaipur had admitted writ petition nos. 12924/2025, 12927/2025 and
12930/2025 based on the admissions of the Customs Authorities at Jaipur
and the untenability of paragraphs 6.2, 6.3.3 and 6.3.4 of the show cause
notices. According to him, notices have been issued to the respondents and
also a stay has been granted on the operation of the show cause notices
during the pendency of the said petitions. In this regard he has placed
reliance on the order dated 26.08.2025 of the High Court of Rajasthan in the
aforementioned petitions, wherein, the subject matter of import were also
copper tubes and pipes. According to him, the entire allegation upon which
the show cause notices issued by the respondents in the said case was that
the goods did not allegedly satisfy the minimum RVC in the terms of

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AIFTA for them to be eligible for preferential rates of duties. However, in
view of the categorical admission of the respondents regarding the lacuna in
the AIFTA in respect of the verification procedure and admission of non-
verification of the Certificate of Origin (―COO‖) by the Customs
Authorities. The petitioners are entitled to the interim order. The Rajasthan
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 by the Customs Authorities while rejecting the benefit of the
AIFTA.

8. It is his case that AIFTA is a complete code in itself and in any case,
where there is a dispute between the AIFTA and the Rules of Origin 2009,

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(ROO) the provisions of the AIFTA would prevail. The same has been
accepted in Rule 8(3) of the Customs Administration of Rules of Origin
under Trade Agreements Rules, 2020 (CAROTAR) read with instruction
No.19/2022-Customs, dated 17.08.2022 and instruction No.23/2024-
Customs dated 21.10.2024. As the AIFTA is valid and binding on the
respondents, the rejection of benefits of valid COOs by the respondents is in
excess of jurisdiction and without any authority. In this regard, he placed
reliance of a decision of the Supreme Court in Commissioner of Customs,
Bangalore v. GM Exports, 2015 (324) ELT 209 (SC).

9. Mr. Balbir Singh is of the view that the AIFTA read with ROO clearly
states that the benefit of the notifications must be granted upon furnishing a
valid COO. In the present case, all the COOs are valid and the same have
not been cancelled or revoked and even the issuing authority confirmed the
authenticity of the COOs. Even if there were to be any dispute with regard to
the determination of the origin of the product, Article 18 read with appendix
D – Article 24 of the AIFTA which are the ‗Operational Certification
Procedures for the Rules of Origin for the AIFTA’ provides that the disputes
between the two countries is to be resolved through a dispute settlement
procedure under the ASEAN-India Dispute Settlement Mechanism
Agreement. However, in the present case, the respondents have directly
issued the show cause notices without following the due process of law.

10. He stated that in the counter affidavit filed by the respondent no.2,
more so, at paragraph 3, they have conceded to the position that the dispute
settlement mechanism under the AIFTA, i.e., Article 24 is available inter se
between the Member States and not between one business entity and
another. Since, the present dispute relates to non-grant of benefits under the

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AIFTA by the respondents despite the fact that the issuing authority in the
exporting country, i.e. Vietnam has vide a letter dated 16.12.2024,
28.08.2025 and 15.09.2025 specifically stated that the COOs are genuine
and satisfy the RVC criterion under the AIFTA. Therefore, this non grant of
benefit creates 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’ cost statement based on the current cost
and prices within a six month time frame prior to the date of
exportation.

iii) The issuing authority shall respond to the request promptly and

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reply within three months after receipt of the request for
retroactive check.

iv) In cases, where there is a reasonable doubt as to the authenticity
or accuracy of the document, the customs authorities of the
importing country may suspend the provision of preferential
tariff treatment while awaiting the result of the verification.

v) The retroactive check process including the actual physical
process to determine whether the subject good is originating or
not, should be completed and the result communicated within
six months.

vi) Customs authority of the importing country may request an
importer for information and documents related to the origin of
imported goods in accordance with its domestic laws and
regulations before requesting the retroactive check.

vii) Request for verification visits to the exporting party may be
done under the exceptional circumstances.

12. It is the case of Mr. Balbir Singh, that the due process for verification
of the COOs has not been followed by the customs authorities. In fact, the
COOs were not verified and the admission on this account can be found in
paragraphs 6.3.3 and 6.3.4 of the show cause notices and the same have been
reiterated in the reply so filed by the respondents in these petitions. It is
submitted that the respondents have acted while disregarding the procedure
prescribed under the statutory framework by arbitrarily denying the benefits
of the relevant exemption notifications and issued the impugned show cause
notices without any authority or basis.

13. Mr. Balbir Singh has stated, that the AIFTA read with ROO

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recognises only two methods for determining the RVC content i.e., namely
the direct method and indirect method. He submitted that in the present case
the suppliers have determined the RVC as per the direct method and has
made the declaration in Form-I to that effect, that the RVC content as per
the AIFTA in the impugned goods is more than 35%. Despite the suppliers
adopting the direct method for determination of RVC in the impugned
goods, the respondents have proceeded to determine the RVC as per a new
method on the basis of total production of the suppliers which is not
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 data came to
the reasoned conclusion that the exports to India were the outcome of bona

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fide manufacturing operations in Vietnam. These findings do not leave any
scope for disputing the fact of manufacturing and value addition in Vietnam,
and constitute binding determination which cannot be disregarded by the
respondents. Hence, Mr. Singh stated that the respondent re-agitating the
matter through the impugned notices is against the principles of res judicata.

15. Mr. Singh has also argued on behalf of the petitioners that the COOs
have not been cancelled or revoked by the issuing authority. Therefore, the
benefit of Notification No. 46/2011-Customs cannot be denied to the
petitioners. Since the issuing authority in Vietnam which has issued the
COOs is binding on the customs authorities and they cannot go behind the
COOs in terms of the AIFTA read with ROO especially when the same has
not been cancelled or revoked by the issuing authority. Furthermore, the
issuing authority has since affirmed the genuineness of its COOs vide letters
dated 16.12.2024 and 28.08.2025 this clearly proves that upon verification
of the COOs the issuing authority being respondent No. 4 has found the
COOs to be genuine and authentic and hence the petitioner have correctly
availed the benefit of preferential treatment under AIFTA and there is no
misrepresentation as to the RVC of the impugned goods. In this regard he
has relied upon the decision of the Supreme Court in Union of India v.
Azadi Bachao Andolan, (2004) 10 SCC 1, wherein it had been held that a
tax residency certificate issued by a foreign government under a treaty frame
work is conclusive and cannot be disregarded by the Indian authorities. The
principle applies to the case of COOs under trade agreements like the
AIFTA and once COOs are issued by the designated authority the of the
exporting country, the said COOs are binding and the Indian customs
authorities have no jurisdiction to question the authenticity of the same

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except through the treaty prescribed verification process, which in the
present case the respondents have failed to follow.

16. Another plea that has been taken by the petitioners is that respondent
have proceeded on the basis of presumptions to compute the RVC in respect
of the impugned goods without any verification and the same is evident
from paragraphs 6.3.3 and 6.3.4 of the show cause notices. Mr. 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 same have been reaffirmed as being
genuine. He stated that the respondents have also rejected the benefits which
were due to the petitioners on account of the aforesaid notifications without
any basis.

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18. Mr. Singh has argued that the extended period of limitation of five
years under Section 28(4) of the Act has been wrongly invoked in the
present cases as the demands have been raised for the disputed period
majorly covering imports from 2019-2022 vide the impugned show cause
notices especially when there is no fraud and suppression on part of the
petitioners. He pointed to the fact that the demand is beyond the normal
period of two years and is without jurisdiction. Further, the AIFTA and the
ROO directs the issuing authorities to maintain the records for the COOs for
a period of two years only. Which means that any demand of duty by
invoking the extended period of limitation under Section 28(4) of the Act for
five years is bad in law.

19. Mr. Singh has argued that the respondents are clearing the impugned
goods for home consumption upon furnishing of bank guarantee and bond in
terms of letter dated 05.07.2023 and that the respondents cannot suspend the
operation of the treaty in perpetuity under the garb of investigation. It is an
admitted case that in the present case no verification of the COOs has taken
place. Further, the suspension of the AIFTA in any event cannot be stretched
beyond a maximum period of one year i.e., for the entirety of the
verification process. However, in the present case, it is an admitted fact that
the investigation started in 2023 and the same ought to have been concluded
in 2024. Since, this process has not been concluded which is clear from the
fact that the impugned goods are even today being cleared upon furnishing
bank guarantee and bond which means that the letter dated 05.07.2023,
demanding bank guarantee is bad in law.

20. It is his case that the demand of bank guarantee by the respondents is
against Rule 6 sub Rule 4(a) of CAROTAR clearly states that if customs

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authorities start a verification process to check whether the goods qualify for
preferential tariff benefits under a trade agreement at the time of import then
they can temporarily suspend the concessional rate which is the lower rate of
duty for those goods until the verification is completed. However, in the
present case it is an admitted position that 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 jurisdiction of
this Court. He has cited the various ports which fall within the territorial
jurisdiction of this Court to state that this Court has jurisdiction to entertain
these writ petitions. He has given a brief summary of the same as follows:-

                                  S.     Petitioner                      Registered   Ministry Import Port
                                  No.                                    Office       of
                                                                                      Commerce



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                                   1.     Pallavi Copper Pipes Pvt. New Delhi New Delhi
                                                                                    INPTL6 (page
                                         Ltd. (W.P. (C) 11132 of                    165 of Writ
                                         2025)                                      Petition)
                                  2.     Micro       Coils    and New Delhi New Delhi
                                                                                    INTKD6
                                         Refrigeration Pvt. Ltd.                    (page 180 of
                                         (W.P.(C) 11127 of 2025)                    Writ Petition)

3. Havells India Limited New Delhi New Delhi INPTL6 (page
(W.P.(C) 11130 of 2025) 170 of Writ
Petition)

4. Pankaj Metals (W.P.(C) New Delhi New Delhi INTKD6
11131 of 2025) (page 153 of
Writ Petition)

5. Ess Kay Fabrication Rewar, New Delhi INGHR6
(W.P.(C) 13004/2025) Rajasthan (page 198 of
Writ Petition)

6. Zeco Aircon (W.P.(C) Mumbai New Delhi INGHR6
12999/2025) (page 198 of
Writ Petition)

23. Mr. Bhandari, learned Senior Counsel appearing in W.P.(C)
11130/2025 has only argued on the maintainability of the petitions as he has
fairly submitted that the other aspects in this petition are one and the same as
the ones argued by Mr. Singh. According to him, the show cause notices
have been issued by the Commissioner is outside the territorial jurisdiction
of this High Court although the registered office of the petitioner is located
in Delhi. Hence, a partial cause of action has arisen within the territorial
jurisdiction of this Court.

24. The present dispute pertains to the enforceability of the AIFTA, the
same was entered into by the Ministry of Commerce, which is the
respondent no. 2, located in Delhi and hence, another partial cause of action
has arisen in Delhi.

25. He has stated that apart from the above, the petitioner has imported
copper pipes and tubes at the inland container depot ports which are within
the territorial jurisdiction of this Court. In this regard, he has placed reliance
on the Bill of Entry No. 5054191 dated 15.03.2023 since the petitioner has

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imported goods at ports, which are answerable to the Custom authorities in
Delhi, the same has also been recorded in the show cause notice. Therefore,
another cause of action arises in Delhi. He has referred to the Import Port
INPTL6 in W.P.(C)11130/2025 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 across all the petitions. He has
submitted that the importing country has the authority to deny preference
despite COO. He submitted that under the ASEAN-India Trade In Goods
Agreement (―AITIGA‖) India as the importing country is legally
empowered to refuse or withdraw preferential tariff treatment even if a COO

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has been issued by the exporting country provided that there are valid
reasons to doubt that the goods fulfil the origin criteria. According to the
Rules of origin and Operational Certification Procedures (―OCP‖) under the
AITIGA, which have explicitly contemplated such a situation. This
agreement allows the customs authority of the importing nation to ―request a
retroactive check at random and/or when it has reasonable doubt as to the
authenticity of the COO or the accuracy of the information regarding the
true origin of the products‖. Thus, while a COO is a necessary document for
claiming preferential duty, it is not conclusively binding if the issuing
circumstances or contents are questionable. Under the agreement, the
importing country is also empowered to suspend preferential tariff
concessions while verification is ongoing. If the verification procedures or
evidence confirms that the goods do not meet the origin requirements, for
example, insufficient RVC or false declarations, the importing country is
well within its rights under the agreement to deny the preferential tariff
benefit.

28. He stated that the AITIGA does not divest India as an importing
nation of its sovereign right to protect revenue by investigating and rejecting
unjustified claims of preference. Rather, it establishes a framework for
lawful rejection of such claims. The Custom Authorities retain jurisdiction
to examine and adjudicate origin related issues under domestic law read
harmoniously with the AITIGA. Therefore, COOs is, subject to scrutiny and
India can lawfully deny concessional tariffs where goods are found non-
originating under AITIGA.

29. On the issue of requirement of verification before denial of
preference, Mr. Venkatraman has argued that the AITIGA’s provision do

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not make it mandatory for an importing country to seek verification from the
exporting countries’ authorities in every case before denying a preferential
tariff claim. Instead, the agreement provides for verification only as an
option. The operative language in the OCP is permissive, which states that
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 chooses to invoke the verification mechanism, certain
obligations arise for both the parties underscoring the fact that the AITIGA
and verification process under the aegis of the treaty are intended to
facilitate resolution of inquiries. For instance, where a verification request is
made, the issuing authority of the exporting country is required to respond

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within three months with the requested information. This time bound
obligation on the exporting nation indicates that the agreement provides for
a verification mechanism as a primary means to resolve questions regarding
the origin of goods. He has stated that where the circumstances permit, India
would typically seek verification rather than unilaterally rejecting a COO.
However, the agreement does not prohibit India from denying preference
without verification i.e., no clause of the agreement nullifies India’s
authority to act on clear evidence. In substance, though the AITIGA strongly
encourages the use of this mechanism but it does not make prior verification
a mandatory legal requirement before denial of preferential treatment.

32. Mr. Venkatraman has also referred to the OCP under the AITIGA
more specifically to Rules 16 and 17 to underscore the facilitative nature of
these provisions. The intent behind these provisions is that there is a process
for cooperation and information sharing rather than imposing binding
conditions on an importing country. In this regard, he has referred to the text
of the agreement to emphasise the facilitative non-binding nature for the
retroactive check in cases where there is a doubt. India is empowered to
initiate verification but is not compelled to do so in every case. He has
emphasised on the fact that discretion ultimately lies with the importing
country to determine or decide when a verification request is warranted.

33. Mr. Venkatraman has argued that once such a request is made the
provisions become binding upon the authorities of the exporting country.
For instance the issuing authority must retain all relevant application
documents for at least two years and shall furnish the information regarding
validity of the COOs upon request from the importing country. In this
manner the OCP establishes a structured avenue for verification placing

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obligation on the exporting country to operate and respond while leaving the
invocation of the said avenue subject to the 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 acting without a
confirmation from the foreign authorities.

35. On the issue of the of domestic implementation under Section 28DA
of the Act and the CAROTAR he has stated that the domestic law gives full
effect to their AITIGA provisions by requiring that the verification be
undertaken consistently with the terms of the trade agreement. The parity
between the agreement and domestic law is evident from the fact that both
are aligned in substance and procedure. He stated that where overwhelming

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evidence emerging through independent investigation the agreement does
not mandate verification as a precondition for denial of preferential benefits.
The domestic implementation has institutionalised the ROO of the AITIGA
whereby a certain procedure has been created for verification and in certain
cases denial of benefit. This procedure ensures that India’s action in
rejecting improper claims of preference are grounded in national as well as
international law.

36. Mr. Ventakraman has argued that the issuance of a show cause notice
to an importer proposing to deny a claim under the AITIGA preferential
tariff benefit is consistent with the agreement and Indian laws, more
specifically in reference to Section 28 of the Act. The issuance of a show
cause notice is mandatory whenever customs propose to recover duties or
deny an exemption. The show cause notice acts as a safeguard of due
process by placing the importer on notice and to provide a basis for
proposed action at the same time according and opportunity to be heard.
This procedure dovetails with the AITIGA’s cooperative framework. In
cases where doubts arise in respect to the origin of certain goods and
services the importing country is entitled under the OCP to undertake
verification and if these goods do not satisfy the prescribed origin criteria
the importing nation within its right to deny the preference. In these cases
the show cause notice is an instrument through which those verification
outcomes and supporting evidence are formally put to the importer and thus
this procedure is a vital bridge between India’s domestic statutory
framework and International Law.

37. It is his case that in cases where preliminary fact finding indicates that
the goods fail to meet the origin test criteria the customs issue a show cause

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notice under Section 28 of the Act proposing a denial of the preferential
rates and to 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
inappropriate for the Courts to interfere at the stage of issuance of a show
cause notice by way of a writ petition accept for in rare cases where there
has been jurisdictional error or a gross violation of principles of natural
justice. Since, the intent behind the show cause notice is a final
determination of origin of the good but rather a preliminary step enquiring
from the importer after which it would be determined by way of
adjudication by the appropriate authority. He argued that the petitioner must
exhaust the available statutory remedies before invoking writ jurisdiction.

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39. The aforesaid principle underlines the fact that there is an existence of
a statutory appellate remedy which renders a direct writ petition untenable
and not maintainable. Therefore, he stated that the next procedural and
logical step would be that the petitioners exhaust the departmental
adjudication process before approaching a Writ Court. Once the
adjudicatory procedures before the departmental authorities are exhausted
the petitioners may approach the High Court by way of an appeal or revision
but not through a writ petition unless exceptional circumstances warrant
such recourse. According to Mr. Venkatraman the proper course for the
importers in this case would be to raise all defences including the arguments
which are based in the AITIGA before the adjudicating authority and
thereafter before the appellate fora provided for under the statute. Given
that such remedies are both available and adequate the High Courts have in
the past declined to entertain writ petitions against show cause notices. This
approach is consistent with the settled position of law which states where an
efficacious alternative remedy exists the High Court ought not to exercise its
writ jurisdiction and refrain from intervening at an interlocutory stage such
as in a case where just a show cause notice has been issued. He is of the
opinion that in the present case the writ petition challenging the show cause
notices are liable to be dismissed as premature and not maintainable since
the petitioners have other statutory routes to resolve the present issue.

40. Mr. Premtosh K. Mishra, learned counsel appearing on behalf of
respondent no. 2 i.e. Ministry of Commerce and Industry in W.P.(C)
11129/2025 has stated that the stance of the Ministry of Commerce &
Industry be treated as the same across the batch of these petitions and has
further stated that AIFTA has been signed by India and the ASEAN

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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 violation of a
trade agreement is only maintainable if that provision has been incorporated
into municipal law passed by the Parliament or through subordinate
legislations. He submitted that under the Government of India (Allocation of
Business Rules, 1961), the role of Ministry of Commerce and Industry is
limited to negotiation and conclusion of trade agreements including the one
such as the AIFTA. Any customs related implementation, enforcement and
administration of the AIFTA is within the purview of the customs authorities
under the Department of Revenue.

42. He has submitted that the customs authorities are the competent
authorities to address the present dispute. According to him, no provision of

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the AIFTA has been directly challenged but rather only a decision of the
custom authorities i.e., issuance of the show cause notice has been
challenged before this Court. According to him, the Indian Customs
Authorities are the implementing agency for tariffs, collection of duties,
verification of COOs and the requirements under the ROO and other
customs and trade facilitation matters. Accordingly, it is the customs
authorities which take the necessary action against any such violations.

43. Further, appendix-D of the OCP for the ROO under the AIFTA
provides that upon issuance and verification of the AIFTA COO and other
related administrative matters, it would be Articles 16 and 17 of the
appendix-D, which govern such issues. The same clearly provide that the
importing party may request the importer for any documents related to the
COO in accordance with its own domestic laws and regulations. Further, it
would be the sovereign nation, which shall be responsible for providing
legal sanctions against fraudulent acts related to the AIFTA COO. He has
emphasised the fact that any verification is to be performed by the customs
authority of the importing State and in accordance with the laws of the
importing state.

44. Lastly, he submitted that the matter falls within the domain of the
CBIC and the Department of Commerce has no direct involvement in the
implementation of the ROO and prays that the Ministry of Commerce and
Industry be removed from the array of respondents from this batch of
petitions.

45. Mr. Aditya Singla, learned Senior Standing Counsel has entered
appearance on behalf of respondent nos. 5 to 7 in W.P.(C) 11130/2025,
respondent no. 6 in W.P.(C) 11128/2025, W.P.(C) 11129/2025, W.P.(C)

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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. Summit Online Trade
Solutions (P) Ltd., (2023) 7 SCC 791, Kusum Ingots & Alloys Ltd. v.
Union of India (2004) 6 SCC 254, Nawal Kishore Sharma v. Union of
India (2014) 9 SCC 329 and H.S. Rai v. Union of India (2022) SCC Online
Del 2803.

46. The customs authorities, according to him, are empowered under
Section 28DA of the Act and the CAROTAR to verify the correctness of
claim of preferential tariff treatment under a trade agreement including the
genuineness of the COOs. Furthermore, Article 16 of the AIFTA ROO
expressly allows for the importing party to request verification in case of
reasonable doubt as to the authenticity or accuracy of the COO. Therefore,

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an argument that the Indian authorities lack jurisdiction to question the COO
is untenable.

47. He has stated that the petitioners herein filed bills of entry for copper
tubes and pipes from Vietnam under CTH 7411 and paid zero Basic
Customs Duty (BCD) and IGST at the rate of 18% by Customs notification
no. 46/2011 dated 01.06.2011 read with Customs notification no. 189/2009
dated 31.12.2009. During the investigation, it was revealed that the import
of copper tubes and pipes from Vietnam under AIFTA had rapidly increased
to India and these goods are imported to India at a nil rate of duty. He has
argued that the domestic production of copper in Vietnam was only 21,900
metric tonnes, despite of which Vietnam has emerged as a major source of
copper products exported to India, which raises serious doubts about the
authenticity of origin and the possibility of third-country routing, which is
being used as a means to potentially exploit tariff concessions under the
AIFTA. In support of his submission, he has relied upon the judgments of in
the cases of Prathibha Processor v. Union of India, (1996) 88 ELT 12 (SC)
and U.M. Cables Ltd. v. Union of India, 2017 (347) ELT 78 (Guj.).

48. He has stated that the relevant authorities reviewed the import and
export data between Vietnam and other countries to find that there were
several inconsistencies which were identified particularly regarding
Vietnam’s importation of a large volume of copper cathodes from non-
ASEAN countries. This he stated suggests that a substantial portion of the
copper cathodes originate from non-ASEAN countries and affects the
accuracy of the declaration of the COO. The declarations made by key
importers in their FORM-I and the CAROTAR states that the copper used in
the production of the copper tubes and pipes meets the RVC requirements

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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 giving name of
Supplier. The complete details in tabular form which should add up to
total copper processed by the company.

g) Total quantity of local Vietnam origin copper processed during 2018
to 2023 (each year wise) and the total quantity of Vietnam origin
copper exported by the supplier to the Importer in India.

h) Audited Financial Statement of the Supplier from 2018 onwards.

49. In this regard, he has drawn our attention to the AIFTA ROO and the

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Custom Tariff Rules, 2009, more specifically, to Articles 7 , 14 and 16 of the
AIFTA and Annexure-2 of Rule 4 of the ROO along with Rule 13 with
Appendix D as well as Article 16A and 16B. Additionally, he has also relied
on Articles 22 and 23 of the ROO along with Rules 5 and 13 of the Customs
Tariff [Determination of Origin of Goods under the Preferential Trade
Agreement between the Governments of Member State of the Association of
Southeast Asian Nations (ASEAN) and the Republic of India] Rules, 2009
(―CTR‖) to state that the procedure laid down within this legal framework
allows for the importing country to ensure the appropriate enforcement of
the agreement in India including the fact that the customs authority in India
are within their powers to investigate the veracity of the COO.

50. It has been ascertained during the investigation that two major
exporters of copper tubes and pipes from Vietnam to India are M/s. Hailing
Copper Manufacturing Co. Ltd. and M/s. Jintian Copper Industrial Co. Ltd.
who have deliberately falsely declared the origin of copper used in their
exports to state that the same is of Indonesian origin in order to satisfy the
ROO under the AIFTA. However, enquiries have revealed that Vietnam
does not possess adequate copper resource to support such large scale
exports, instead these exporters have been sourcing copper from Hong Kong
and China and thereafter, routing the same through Vietnam for re-export to
India. This fact is substantiated with the fact that the Indian importers of
copper tubes and pipes have been making payments into bank accounts
located in mainland China even though the declared suppliers are based in
Vietnam. In this regard, he has referred to the extracts of the show cause
notice in the case of W.P.(C) 11130/2025 as an example to show the actual
RVC contents, which reads as follows:-

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TABLE-B

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51. It has further been revealed that many of the manufacturing units in
Vietnam are owned or controlled by Hong Kong or China based parent
companies and this pattern would suggest that Chinese companies
deliberately route copper through Vietnam and other ASEAN countries to
claim duty exemptions under the AIFTA while the actual origin is most
likely Chinese or even other non-eligible countries. He has further argued
that there is a strong possibility of data manipulation and origin falsification
by the Chinese parent entities to channel their goods in India in
circumvention of Indian customs regulations. By such suppression of facts
and misrepresentation of origin even the Indian importers have sought to
fraudulently availed or preferential duties under the AIFTA which otherwise
they are not entitled to. This amounts to wilful false declaration and is in
contravention of the CTR read with CAROTAR.

52. He stated at goods imported from ASEAN countries that merely
undergo minimal processing without meeting the prescribed RVC criteria
under the AIFTA ROO cannot be deemed as goods originating within the

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ASEAN and hence, liable to be denied from the benefit of AIFTA.

53. In support of his case, Mr. Singla has relied upon in the judgement in
the cases of Purple Products Private Limited (supra), and Trafigura India
Pvt. Ltd. v. Union of India, 2023 SCC OnLine Guj 5086 of the Gujarat
High Court.

54. He challenges the maintainability of these petitions on the ground of
lack of territorial jurisdiction and the fact that only the show cause notices
have been challenged. The show cause notices were duly issued to the
petitioners and thereafter, three opportunities for personal hearings were
granted despite of which the petitioner chose not to file any reply or
participate in the adjudication proceedings and have instead chosen to
approach this Court seeking to bypass the statutory process cannot now
invoke extraordinary writ jurisdiction under Article 226 of the Constitution
of India to bypass a lawful 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:-

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S Particulars Imports at Office Address SCN issued by
No

1. Rajasthan Metals vs. ICD Tughlakabad, New B-34/6, 2nd Floor, Principal
Union of India & Ors. Delhi G T, Karnal Road, Commissioner of
W.P.(C)-11126/2025 North West Delhi – Customs (Import),
CM APPL. 45750/2025 ICD Garhi Harsaru, 110033. ICD Tughlakabad,
CM APPL. 45751/2025 Gurugram, Haryana New Delhi

2. Micro Coils and ICD Khatuwas, Alwar BA-72-B Principal
Refrigeration Pvt. Ltd. Rajasthan Janakpuri, West Commissioner,
vs. Union of India & ICD Garhi Harsaru, Delhi, Delhi, Jodhpur
Ors. Gurgaon 110058 (Preventive),
Port of Chennai, Tamil Jaipur
W.P.(C)-11127/2025 Nadu
CM APPL. 45752/2025 ICD Patparganj, New Delhi
CM APPL. 45753/2025

3. Mardia Metals vs. Union ICD Tughlakabad, New B-34/6, 2nd Floor, Principal
of India & Ors. Delhi G T, Karnal Road, Commissioner of
ICD Garhi Harsaru, North West Delhi – Customs (Import),
W.P.(C)-11128/2025 Gurugram, Haryana 110033 ICD Tughlakabad,
CM APPL. 45754/2025 New Delhi
CM APPL. 45755/2025

4. Spirotech Heat ICD Tughlakabad, New A-45, 46, & A51, Principal
Exchangers Pvt. Ltd. vs. Delhi 52, Industrial Commissioner of
Union of India & Ors. ICD Garhi Harsaru, Kahrani, Customs (Import),
W.P.(C)-11129/2025 Gurugram, Haryana Bhiwadi Extn, ICD Tughlakabad,
CM APPL. 45756/2025 ICD Khatuwas, Alwar, Distt — Alwar, New Delhi
CM APPL. 45757/2025 Rajasthan Nhava Sheva Rajasthan, 301019
Port, Jawaharlal Nehru Port
Trust, Maharashtra

5. Havells India Ltd. vs. ICD Garhi Harsaru, SP1-133, RIICO Principal
Union of India & Ors. Gurugram, Haryana Industrial Area, Commissioner,
W.P.(C)-11130/2025 ICD Dadri, Noida, Uttar Ror Ghiloth, Distt Jodhpur
CM APPL. 45758/2025 Pradesh Alwar-301706 (Preventive),
CM APPL. 45759/2025 ICD Garhi Harsaru, Jaipur
Gurugram, Haryana
Port of Chennai, Tamil
Nadu
Mundra Port, Gujarat
ICD Gurgaon Patli, Haryana
ICD Patparganj, New Delhi

6. Pankaj Metals vs. Union Mundra Port, Gujarat 46, Ajmeri Gate, Commissioner of
of India & Ors. ICD Tughlakabad, New North Delhi, Customs, Mundra
W.P.(C)-11131/2025 Delhi Delhi- 110006, Port, Gujarat
CM APPL. 45760/2025
CM APPL. 45761/2025

7. Pallavi Copper Pipes ICD Khatuwas, Alwar, 16 Birbal Road, Principal
Pvt. Ltd. vs. Union of Rajasthan Jungpura Ext., Commissioner of
India & Ors. ICD Dadri, Noida, Uttar New Delhi , Delhi, Customs (Import),

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W.P.(C)- 11132/2025 Pradesh 110016 Jodhpur
CM APPL. 45762/2025 ICD Gurgaon Patli, Haryana (Preventive),
CM APPL. 45763/2025 ICD Garhi Harsaru, Jaipur
Gurugram, Haryana

8. Honeycool Vs. Union of ICD Garhi Harsaru, KH NO. 14/12/2, Principal
India & Ors. Gurugram, Haryana Shamlaka, South Commissioner of
W.P.(C)-12998/2025 ICD Tughlakabad, New West Delhi, New Customs (Import),
CM APPL. 53203/2025 Delhi Delhi – 110037 ICD Tughlakabad,
CM APPL. 53204/2025 New Delhi

9. Zeco Aircon Limited Vs. Nhava Sheva Port, Office No. 105, Commissioner of
Union of India & Ors. Jawaharlal Nehru Port First Floor, Padma Customs NS-III,
W.P.(C)-12999/2025 Trust, Maharashtra Tower 1, Rajendra Jnch, Nava Sheva
CM APPL. 53206/2025 ICD Garhi Harsaru, Place, Patel Nagar Port, Maharashtra
CM APPL. 53207/2025 Gurugram, Haryana , New Delhi –

                                                           ICD Dadri, Noida, Uttar       110008
                                                           Pradesh

                          10.   BMR HVAC Limited Vs        ICD Tughlakabad New           Plot No. M-137,       Principal
                                Union of India & Ors.      Delhi                         M1DC,      Waluj,     Commissioner of
                                W.P.(C)-13001/2025         Nhava       Sheva     Port,   Aurangabad,           Customs (Import),
                                CM APPL. 53212/2025        Jawaharlal Nehru Port         Maharashtra,          ICD Tughlakabad,
                                CM APPL. 53213/2025        Trust, Maharashtra            431136                New Delhi
                                                           ICD Dadri, Noida, Uttar
                                                           Pradesh
                                                           ICD Patparganj, New Delhi

                          11.   Heatcraft Industries Vs    ICD Tughlakabad,      New     Plot No. 3/26         Principal
                                Union of India & Ors.      Delhi                         Ajanta Industrial     Commissioner of
                                W.P.(C)-13002/2025                                       Complex,              Customs (Import),
                                CM APPL. 53214/2025                                      Industrial   Area,    ICD Tughlakabad,
                                CM APPL. 53215/2025                                      Site 2, Loni Road,    New Delhi
                                                                                         Mohan        Nagar
                                                                                         Ghaziabad, Uttar
                                                                                         Pradesh, 201007

                          12.   Fitspark India Vs Union    ICD Tughlakabad, New          135,     Engineers    Principal
                                of India & Ors.            Delhi (via Nhava Sheva,       Enclave, 2nd floor,   Commissioner of
                                W.P.(C)- 13003/2025        India)                        Pitampura, New        Customs (Import),
                                CM APPL. 53216/2025                                      Delhi - 110034        ICD Tughlakabad,
                                CM APPL. 53217/2025                                                            New Delhi

                          13.   Ess Kay Vs Union of        ICD Khatuwas, Rajasthan       Plot No. 351,         Principle
                                India & Ors.               ICD     Garhi     Harsaru,    Sector -3, Phase-     Commissioner    of
                                W.P.(C)-13004/2025         Gurugram, Haryana             II,       HSIIDC      Customs
                                CM APPL. 53218/2025                                      Growth     Centre,    Jodhpur
                                CM APPL. 53219/2025                                      Bawal,    Rewari-     (Preventive),
                                                                                         123501                Jaipur

                          14.   Edgetech Vs Union of       ICD     Garhi     Harsaru,    403 - 404, Gopal      Commissioner of
                                India & Ors.               Gurugram, Haryana             Heights,   Netaji     Customs      ICD
                                W.P.(C)-13005/2025         ICD Tughlakabad, New          Subhash    Place,     Patparganj      &
                                CM                         Delhi                         Pitampura, Delhi,     Other ICDs, Delhi



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                                 APPL. 53220/2025 CM                                      110034
                                APPL. 53221/2025

                          15.   Diwach Industries Vs.      ICD     Garhi      Harsaru,   A-213,      RIICO     Commissioner of
                                Union of India & Ors.      Gurugram, Haryana             Industrial    Area    Customs      ICD
                                W.P.(C)-13006/2025         ICD Patparganj, Delhi         Ghiloth,    Alwar,    Patparganj      &
                                CMAPPL. 53222/2025         ICD Tughlakabad, New          Rajasthan, 301019     Other ICDs, Delhi
                                CM                         Delhi
                                APPL. 53223/2025

                          16.   Amapai      Corporation    ICD Patparganj, Delhi and     B - 2, Sector - 2     Commissioner of
                                India Private Limited      Other ICDs                    Noida,    Guatam      Customs      ICD
                                Vs. Union of India                                       Budhha Nagar          Patparganj      &
                                W.P.(C)-19108/2025                                       Uttar Pradesh -       Other ICDs, Delhi
                                CM APPL. 79511/2025                                      201 301

                          17.   Koolking       Udhyog      ICD     Dhandari   Kalan,     Dhuri        Road     Principal
                                Private Vs. Union of       Ludhiana, Punjab              Malerkotla,           Commissioner Of
                                India & Ors.               ICD Sahnewal , Ludhiana,      Sangrur     Punjab    Customs,
                                W.P.(C)-19110/2025         Punjab                        148023                Ludhiana
                                CM APPL. 79514/2025        ICD             Chawapail,
                                CM APPL. 79515/2025        Ludhiana,Punjab
                                                           ICD Dadri, Noida, Uttar
                                                           Pradesh
                                                           ICD Khatuwas, Alwar,
                                                           Rajasthan
                                                           ICD      Garhi    Harsaru,
                                                           Gurugram, Haryana
                                                           ICD Tughlakabad, New
                                                           Delhi

                          18.   Mistcold     Sales and     ICD Tughlakabad,      New     721-       Hemkunt    Principal
                                Services Vs. Union of      Delhi                         Chambers,       89-   Commissioner of
                                India & Ors.                                             Nehru        Place,   Customs (Import),
                                W.P.(C)-19111/2025                                       Contact        No:    ICD Tughlakabad,
                                CM APPL. 79516/2025                                      26288122,     New     New Delhi
                                CM APPL. 79517/2025                                      Delhi, South Delhi
                                                                                         , Delhi, 110019

                          19.   Epack Durable Limited      ICD Dadri, Noida, Uttar       A-1, A-2, Elcina      Principal
                                Vs Union of India &        Pradesh                       Cluster, Salarpur,    Commissioner of
                                Ors.                       ICD      Garhi     Harsaru,   Bhiwadi,              Customs, Noida
                                W.P.(C)-19112/2025         Gurugram, Haryana             Rajasthan -301019
                                CMAPPL. 79518/2025         Chennai Sea Port, Chennai,
                                CM                         Tamil Nadu
                                APPL. 79519/2025           ICD Tughlakabad, New
                                                           Delhi
                                                           Delhi Air Cargo, Delhi

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

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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 Form-I,
Section II and Section III, ROO and Section 28DA of the Act.

57. He has also stated that as per Article 253 of the Constitution of India
the Parliament has inter-alia the power to make a law for implementing any
treaty, agreement or convention with any other country. Accordingly, the
relevant domestic/municipal law which incorporates the provision of the
treaty are the ROO, which have been made in compliance of Section 5(1) of
the Customs Tariff Act, 1975 (CTA). He states that the ROO incorporate the
Rules as contemplated under the AIFTA.

58. On a conjoint reading of the above, it is clear that there is a
consistency between the Municipal Law and the International Law. The said
procedure permits verification of the COO and in any event, the AIFTA
permits that preferential duty can be suspended as per Appendix-D Article
16(a)(iii). The Customs Authorities are empowered under Section 28DA of
the Act and CAROTAR to verify the correctness of the claims of
preferential tariff treatment under the AIFTA including the genuineness of
the COOs. Article 16 of the AIFTA specifically allows that the importing
party may request for a verification if there is a reasonable doubt as to the
authenticity of the COO or the accuracy of the information regarding the

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true origin. Hence, the petitioners’ claim that the Indian authorities lack
jurisdiction to question the authenticity of COOs is untenable.

59. Mr. Singla stated that the show cause notices have been issued by the
competent authority in exercise of statutory powers and the petitioners have
been given due opportunities to submit the written statements of defence as
well as opportunities to be heard in person. The said show cause notices are
only a vehicle provided for verification mechanism contemplated under the
treaty and the municipal laws of the country, more specifically, Section
28DA of the Act. The entire challenge raised by the petitioner proceeds on a
fundamental misconception of law namely that the AIFTA by itself restricts
the statutory powers of the Indian Customs Authorities. This assumption on
behalf of the petitioners is incorrect since under the Constitution of India, a
treaty is executed by the Executive but becomes enforceable in India only to
the extent it is incorporation in the municipal law by the Parliament and it is
this portion which can be enforced by the Indian Courts. Therefore, 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

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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 notices are supported by judicial
precedents and law.

61. He relied on a judgment of the Supreme Court in Assessing Office
Circle (International Taxation) v. M/s Nestlé SA, (2023) 458 ITR 756
wherein it has been categorically held that an international treaty or an
agreement does not automatically become enforceable in domestic law
unless it has been incorporated by an act of Parliament, where the
Parliament has enacted a statutory framework to implement a treaty, rights,
obligations and powers of authority governed by domestic statutes and treaty
provisions cannot be relied upon to dilute or override express statutory
provisions. Applying the said principle, he submitted the AIFTA is
enforceable in India only through Section 28DA of the Act, the ROO and
the CAROTAR.

62. He stated that it is an admitted position of fact that the goods are
declared as originating from Vietnam; however, the country of origin
declaration alone is not conclusive for claiming preferential tariff treatment.

As per Section 28DA(2) of the Act, the submission of the COO does not
absolve the importer of the responsibility to establish compliance of the
origin criteria. This burden squarely lies on the petitioners and not the
respondents or the foreign issuing authority. It is incumbent on the
petitioners that they have the opportunity to discharge the said burden of

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proof during the adjudication process.

63. According to Mr. Singla, under Rule 13 of the OCP (Annexe 8), the
importer is required to submit the COO along with the supporting
documents as required by the Customs Authorities in accordance with the
Rules and Regulations of the importing country. While Rule 13(3) provides
that the clarification furnished by the issuing authority could be considered
but their acceptance is not mandated. The Rules clearly preserve the
discretion of the importing authority to assess whether such clarifications
satisfactorily address the grounds of denial. Where the clarifications are
found to be inadequate or insufficient, the customs are legally empowered to
maintain the rejection of preferential tariff treatment in accordance with law.

64. It is his case that Rules 18 and 19 of the OCP further empowers
Customs to suspend preferential treatment, conduct retroactive cheques and
in exceptional cases conduct verification visits. None of these provisions
mandate that customs must first 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

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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 case, the foreign supplier of
the petitioner has not provided any documentation confirming segregation
between the raw materials sourced from ASEAN countries and from those
sourced from non-ASEAN countries. Without such segregation and
traceability records, it is impossible to verify whether the copper used in the
exported goods was from ASEAN origin material as claimed, which is a
fundamental requirement for establishing entitlement to preferential duty.

68. In the absence of the aforementioned information, it is not possible for
the respondents to conclusively determine that the imported goods complied
with the originating criteria under the AIFTA. In the absence of
corroborative evidence regarding material segregation, batch tracking and
production logs cannot be concluded that the COOs and the commercial
invoice are sufficient for claiming preferential treatment. He stated that in
order to overcome such practices regarding misrepresentation or
misstatement of origin must be carefully examined in the process of
verification by the proper officer. Since, the COOs did not truly reflect the
origin of the goods, it was pertinent in such a background that the competent
authorities scrutinised the material before granting preferential duty benefit.

69. Mr. Singla is of the view since that it was not possible to ascertain
whether the copper used in the manufacture of goods exported to India
originated or were not originating in the said ASEAN countries using the

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direct method provided in the AIFTA ROO. Accordingly, as these facts
could not be verified through the direct method, the customs authorities
resorted to the indirect method of RVC calculation to determine the true
origin of goods which essentially involves computation of the percentage
value of non-ASEAN materials in relation to the FOB price of the finished
product. These methods are prescribed in the AIFTA itself vide Rule 4 (Not
Wholly Produced or Obtained Products) Annexure-2, hence, action of the
respondent is within the ambit of the treaty not contrary.

70. It is submitted that notification 189/2009 implements the AIFTA
ROO more specifically in reference to Rule 12 to address fungible materials
like copper cathodes and it allows the exporters to use inventory
management systems [First-In-First-Out (FIFO), Last-In-First-Out (LIFO)
and weighted average method]. The exporters must follow a consistent
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

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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. So, every shipment is valued
based on that running average and not one specific lot, which means the
ratio does not remain fixed, it shifts whenever a new shipment arrives.

72. When the Indian Customs requested supporting records the foreign
suppliers were unable to produce the detailed ERP ledger or stock
movement documents that would normally show the running weighted
average of each receipt and the issue records for production batches i.e.
when raw materials are taken out of the warehouse and send to the factory
floor to make the finished goods, which is when a note or entry is made in
the system. That note would show what quantity was taken on what date and
for which production ran or the batch details. These factors are called issue
records for production batches and they prove how much material went into
each batch of finished products and how the ASEAN cathodes were blended
with other imports in inventory pool.

73. Mr. Singla submitted that only a summary allocation for a shipment
under COO was provided while the summary shows the presence of
Indonesian origin cathodes; it does not demonstrate how the perpetual
averaging system was actually applied over time. This according to Mr.
Singla has created certain problems such as under the perpetual weighted
average systems, the ratios of ASEAN and non-ASEAN content changes as
new material arrives. Without a stock ledger maintaining each transaction
the Indian Customs cannot confirm the ratio applied to the month wise
export, which truly reflects the weighted average at that point in time. A

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single shipment level summary is not enough for this purpose as Rule 12 of
the ROO requires a verifiable audit trail of the inventory method in
operation. Thus, Rule 12 precisely exists to avoid cherry picking of
favourable lots. The foreign suppliers declared the weighted average method
in its audited financial statement but failed to produce the detailed records
that prove it was applicable in practice. This gap makes it impossible to
verify whether the ASEAN origin cathodes were consistently average into
production stock as required. As a result, the origin claim under the AIFTA
remains doubtful as full documentary evidence (ERP records, GRNs, issue
slips, stock cards) were not produced. In the absence of continuous
inventory records, there is a reasonable doubt created in the minds of the
Customs Authorities as 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

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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 jurisdiction as per Article 226 of the Constitution of India.
The present case involves invoices from third parties which has a direct
bearing on the computation of the RVC particularly where discrepancies
exists between the values declared in the COO and the commercial invoices.

75. The determination of origin in the present case is governed by Rule 12
of the ROO under the AIFTA which clearly provides that where a product is
manufactured using a mix of ASEAN originating and non-ASEAN
originating material that are mixed or physically combined the origin of such
material is to be determined based on generally accepted accounting
principles of stock control or inventory management followed in the
exporting country. Thus, the Rule itself recognised that physical segregation
or consignment wise co-relation of inputs is not required and what is
relevant is whether the exporter maintains a reliable and recognised system
of inventory records.

76. Mr. Singla has stated that the show cause notices record that after
detailed examination of the material placed by the importer to state that the
consignment wise co-relation between originating and non-originating
materials could not be established. The importer failed to furnish verifiable
and complete data to enable such a co-relation. The information supplied
during investigation was found to be incomplete, non-specific and
insufficient to enable the customs authorities to independently verify the
claimed value addition. The show cause notices further record that the
absence of reliable and verifiable data, the method of computation adopted
by the importer could not be tested or validated in accordance with the

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ROO. The difficulty in verification arose not due to arbitrariness on the part
of the Customs Authorities but solely due to the failure of the importers to
substantiate their claim with supporting documentary evidence.

77. As per Mr. Singla, the petitioners have not substituted, modified or
invented a new formula for RVC computation. The respondents have merely
questioned the verifiability, accuracy and sufficiency of the data furnished
by the importer for applying the prescribed formula. Such a scrutiny is
expressly contemplated under the statutory schemes governing claims of
preferential tariff treatment.

78. Whether FOB value are correctly declared or whether the RVC
content has been computed in 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

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importer to truthfully and correctly substantiate the origin claims. Such
misuse itself constitutes an independent ground for verification and issuance
of show cause notice.

80. Mr. Singla has stated that the respondent/department places reliance
on the CBIC instruction no. 23/2024-Customs, which clarifies that India as
importing country is legally authorised to deny preferential tariff treatment
even where a COO has been produced provided there are valid reasons to
doubt the origin of goods. The instruction expressly recognises that a
certificate of origin is not conclusive and that verification is necessary where
suspicious circumstances exist.

81. He contended that the reliance placed on the CBIC instruction no.
19/2022-Customs is misplaced. The said instruction merely clarifies that in
case of conflict, the provisions of trade agreement shall prevail. However, it
does not prohibit the verification or bar the denial of preferential benefit
where the importer fails to establish compliance with the origin criteria
under the trade agreement itself. He stated that the impugned show cause
notices have been issued strictly in accordance with the Act. He stated that
the present writ petitions are premature and seek to bypass the adjudicatory
process of law and therefore, deserve to be dismissed.

REJOINDER SUBMISSIONS ON BEHALF OF THE PETITIONERS

82. Mr. Balbir Singh has contended that the reliance placed by the
respondents on the judgments in the cases of Purple Products Private
Limited (supra), Trafigura India Pvt. Ltd. (supra) and Alfa Traders v.
Commissioner of Customs, Cochin, 2007(217) ELT 437 are not applicable
in the present cases as the facts in the aforementioned judgments are
completely different. Furthermore, these decisions cannot be relied upon in

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the present case as the customs authorities had undertaken verification as per
the AIFTA read with the ROO by way of retroactive check and later a
verification visit to verify the regional value content in the tin ingots and the
genuineness of COO. However, in the present case, the show cause notices
have been issued without following the process of law and as such the
decisions relied upon by the respondents are distinguishable. The decision in
the case of Alfa Traders (supra), according to him, is not applicable in the
present case as in that case the Tribunal had refused to accept the COO as
the importer had not submitted any substantive evidence that the cloves had
actually grown in Pakistan. It is 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 this particular petition is Article 24 of the

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AIFTA which provides the dispute resolution mechanism. The ROO is the
domestic legislation which incorporates the AIFTA as domestic law. These
rules are very much applicable to the imports in question and they continued
to be in force. The CAROTAR rules are in addition to these rules and do not
replace the earlier rules.

84. Section 28DA(4) of the Act specifically provides that the verification
has to be in line with the trade agreement. The subsequent circular dated
21.10.2024 specifically clarifies the position that the information sought and
the verification must be consistent with the trade agreement. The ROO as
well as the CAROTAR do not allow for denial of exemption notification
without following the verification process. Rule 6(7) of the CAROTAR
specifically provides for denial of preferential claim of duty without
verification in specific circumstances only, which is not the case here.

85. He stated that insofar as Article 24 of the AIFTA is concerned, there
is no requirement of incorporation of the same in domestic law. A dispute
settlement mechanism within an international treaty operates on an
international plane to resolve conflicts between the two sovereign states
distinguishing it fundamentally from the substantive provisions that regulate
private conduct or rights within the domestic territory. While the substantive
rules of a treaty such as tariff adjustment or rules of origin must be enacted
into domestic legislation in order to create enforceable municipal laws; the
dispute resolution mechanism is a procedural apparatus designed for treaty
signatories only. Incorporating the dispute settlement mechanism into
national law is therefore legally redundant and conceptually flawed as the
domestic courts neither possess the jurisdiction nor the capacity to
adjudicate international treaty disputes and the mechanism itself does not

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impact domestic legal rights until an international ruling specifically
mandates a legislative change. He has argued that the petitioners are not
seeking that the dispute resolution procedure be followed in the case of the
petitioners.

86. Mr. Balbir Singh submitted that the petitioners in the aforesaid writ
petitions have challenged the show cause notices issued by the respondent
wherein the preferential trade of duties under the AIFTA on import of
copper tubes and pipes 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, therefore, the respondents have issued the show cause notices.
To this, he submitted that there is no lacuna in the treaty. Assuming even if

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there is a lacuna it is for the government to address those shortcomings
through proper mechanisms and in the absence of any directions to this
effect from the Government of India and its counterparty the AIFTA would
still hold ground. It is on this basis that Mr. Balbir Singh stated that the
show cause notices have been issued without any authority of law and
without jurisdiction.

88. Mr. Singh has pointed out that the respondents have devised and
entirely new formula for determining the RVC content on the basis of the
production capacity of the exporters. The same is against the defined
formulas in the AIFTA read with ROO which only recognise two methods
for determining the AIFTA content i.e., RVC namely the direct and indirect
method. Such action is ex facie contrary to the provisions of the AIFTA read
with ROO. Since the petitioners have challenged the show cause notices on
various grounds therefore, the submission of the learned ASG that the writ
petition are filed only on the account of violation of Article 24 of Appendix
D of the AIFTA is incorrect.

89. He submitted the reliance placed on the decisions of Trafigura
(supra) and Kothari Metals (supra) is incorrect and the said decisions are
not applicable to the present case since the customs authority had undertaken
verification as per the AIFTA and ROO by way of a retroactive check and
later a verification visit to assess and the RVC in tin ingots and the
genuineness of the COO. However, in the present case the impugned show
cause notices have been issued without following the due process of law as
stated above and therefore the above decisions are distinguishable.

90. Mr. Singh has raised another issue that the show cause notices have
been issued without following the due process of law and the said fact has

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been recorded by the High Courts of Gujarat and Rajasthan in their orders
dated 27.11.2025 and 26.08.2025, respectively. He further submitted that it
is not his case that the customs authorities cannot investigate the
genuineness of the COOs or issue show cause notices in the event of non-
compliance of the treaty norms. Although the respondents can issue show
cause notices only after following the due process of verification of the
COOs as per the AIFTA 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 verification. The retroactive check
process including the actual process and determination of whether the
subject good originate from the said country ought to be completed and the

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result communicated within six months. The customs authorities of the
importing country may request an importer for information or documents
relating to the origin of importing good in accordance with its domestic laws
and regulation before requesting for a retroactive check. The request for
verification visit to the exporting country may be conducted under
exceptional circumstances if the retroactive check is not satisfactory. The
verification process needs to be concluded within six months from the date
of request for physical verification.

92. Mr. Singh has contended that in the present case admittedly the
aforesaid due process for verification of the COOs has not been followed by
the customs authorities. In fact the COOs were not verified and the same
stand admitted in paragraphs 6.3.3 and 6.3.4 of the show cause notices and
the same has been reiterated in the reply filed by the respondent in the writ
petition. This according to Mr. Singh goes to show the fact that the
respondents have acted in disregard to the procedure prescribed under law
by denying the benefits of relevant exemption notification and issuing the
impugned show cause notice without any authority and basis.

93. It is his case that Articles 16 and 17 of the AIFTA read with ROO are
mandatory and even though the word ―may‖ is used in the Articles it is not
discretionary or optional, rather the same is obligatory upon the importing
country to undertake verification i.e., retroactive check and verification visit
before rejecting the benefits under the treaty. Further it is the settled
principle of law that the word ―may‖ will be treated as ―shall‖ in
circumstances where the context, purpose and object of the statute indicate
that the provision is intended to be mandatory rather than discretionary. He
has relied upon the judgments of the Supreme Court in the cases of Sardar

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Govindrao v. State of M.P., AIR 1965 SC 1222 and Shri Rangaswami, the
Textile Commissioner v. Sagar Textile Mills (P) Ltd., Air 1977 SC 1516. In
the present case the AIFTA read with Section 28DA, CAROTAR and the
aforesaid instructions cast and obligation upon the proper officer to verify
the genuineness of the COOs in terms of Articles 16 and 17 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
country i.e. respondent No. 4 vide its letters dated 16.12.2024, 28.08.2025
and 15.09.2025 has confirmed that the COOs are genuine. According to Mr.
Singh the entire argument in relation to the verification of the COO being
optional and facilitative in nature is beyond the scope of the impugned show

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cause notices. He is of the view that respondent No. 5 has only admitted that
lacuna in the AIFTA and as such assumed jurisdiction which has not been
conferred upon it. However, no such allegation or any reference has been
made in the impugned show cause notices regarding the verification process
as being optional. According to him the entire argument advanced by the
respondent Nos. 1 and 3 is beyond the scope of the show cause notices in an
attempt to better their case.

96. According to him the learned ASG has rewritten the AIFTA by
employing a new interpretation of Article 16(a) and 16(b) to justify the
actions of the respondents is totally wrong. The treaty clearly provides that
for verification of the COOs the importing country has to reach out by way
of a retroactive check and the exporting country has to reply to the importing
party and this process is to be completed within a period of six months. This
entire process must be completed within a maximum period of one year.
However, in the present case no verification process was done as stated
above and the respondents has suspended the AIFTA from 2023 which is
beyond one year. Thus, the action of the respondent in issuing the show
cause notice and demanding the bank guarantees is contradicting the
verification process provided under the treaty. Hence, the argument that
Articles 16(a) and 16(b) being required to conduct the verification process
does not stand. According to Mr. Singh, Article 16 of the AIFTA as in
Clause 16 of the ROO states that it is not a case where there are two options
for verification but rather a two step verification process, wherein the first
step is to seek information and the same is optional. In the present case, the
information as sought is to be obtained from the exporters and not the
importers being the petitioners.

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97. He argued that merely because the exporter has provided the
information through a law firm does not mean that the respondents are
allowed to disregard the due process of law for verification of the COOs
provided under the treaty. He submitted that the respondent 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 show cause notices. He stated that only
the High Court would have jurisdiction to entertain matters pertaining to the
enforceability of the International Treaties and that there is no alternate
remedy other than approaching this Court. He prays that the show cause
notices as well as the letter dated 05.07.2023 be set aside.

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ANALYSIS AND CONCLUSION

99. Having heard the learned counsel for the parties and perused the
record, the first issue which need to be decided is whether the writ petitions
are maintainable before this Court, as according to Mr. Venkataraman and
other learned counsel for the respondents, the cause of action, if any, has
arisen outside the territorial jurisdiction of this Court.

100. On the other hand, Mr Balbir Singh, and Mr Bhandari learned Senior
Counsel for the petitioners would submit that as part of cause of action has
arisen within the territorial jurisdiction of this Court in as much as in some
cases the inland container depots, from where the goods are imported which
are subject matter of the notices are in Delhi; some of the petitioners are
situated in Delhi; in some cases the notices have been issued from the office
of the respondents in Delhi and as such the petitions are maintainable. We
have already set out the chart giving the relevant facts on the aspect of the
territorial jurisdiction, in paragraph 54 above.

101. We note that in certain cases the goods have been received at ICDs in
Delhi; some of the petitioners are situated in Delhi; and in some cases, the
show cause notices have been issued from the office of the Customs based at
Delhi, as such this Court shall have the jurisdiction to entertain the petitions,
but at the same time, we find that there is one petition viz. WP(C)
13004/2025 where the goods have neither been received in Delhi; nor the
petitioner is situated in Delhi nor notice has been issued from Delhi. To that
limited extent, such petition shall be beyond the territorial jurisdiction of this
Court.

102. In so far as the one petition is concerned, noting the fact that we have
heard all the petitions (including the above one petition) extensively and as

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we are deciding the writ petitions on the plea of Mr. Venkataraman and
other counsel for the respondents that the challenge is primarily to the show
cause notices and the petitions are pre-mature and petitioners must be
relegated to the adjudicating 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 that these writ petitions filed against
the show-cause-notices are not maintainable. He further relied
upon the judgment passed by the Hon’ble Supreme Court in the
matter of M/s Trillion Lead Factory Private Ltd. Vs.
Superintendent of Central Tax (Special Leave to Appeal (C)
No(s).7101/2026) decided on 27.02.2026, wherein, para No.4,
it was held as under:-

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“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
Commissionerate Vs. M/s. Krishna Wax (P) Ltd,
Civil Appeal No.8609/2019 disposed of on
14.11.2019 vide paragraph 12.”

Having perused the record, it is an admitted position that the
present writ petitions have been filed challenging the show-
cause notices. Accordingly, in view of the judgment rendered by
the Hon’ble Supreme Court in the matter of M/s Trillion Lead
Factory Private Ltd. (supra), the writ petitions stand
dismissed.”

104. The law is well settled in terms of the Supreme Court judgment in the
case of Commissioner of Central Excise, Haldia v. M/s. Krishna Wax (P)
Ltd., 2019 INSC 1246, wherein the Court has held:-

“12. It has been laid down by this Court that the excise law is a
complete code in itself and it would normally not be
appropriate for a Writ Court to entertain a petition under
Article 226 of the Constitution and that the concerned person
must first raise all the objections before the authority who had
issued a show cause notice and the redressal in terms of the
existing provisions of the law could be taken resort to if an
adverse order was passed against such person. For example in
Union of India and another vs. Guwahati Carbon Limited,
(2012) 11 SCC 651, it was concluded; “The Excise Law is a
complete code in order to seek redress in excise matters and
hence may not be appropriate for the writ court to entertain a
petition under Article 226 of the Constitution”, while in
Malladi Drugs and Pharma Ltd. vs. Union of India, 2004 (166)
ELT 153 (S.C.), it was observed:-

“…The High Court, has, by the impugned
judgment held that the Appellant should first raise

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all the objections before the Authority who have
issued the 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 Commissionerate v. M/s. Krishna Wax (P) Ltd.,
in Civil Appeal no.8609/2019 disposed of on 14.11.2019 vide
paragraph 12.

106. At this stage, we may also refer to the submission of Mr. Singh on the
maintainability of petitions at the stage of show cause notice to mean that
the due process of verification as envisaged by the treaty and incorporated in
the domestic law has not been followed. Whereas Mr. Venkataraman would
submit that the AITIGA does not divest India as an importing nation of the
sovereign right to protect revenue by investigating and rejecting unjustified

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claims of preferential tariff treatment. Rather it establishes a framework for
lawful rejection of such claims. The authorities retain jurisdiction to
examine and adjudicate origin related issues under domestic law. Therefore,
COO is subject to scrutiny and India can deny concessional tariff where
goods are found non-originating under AITIGA. He has relied upon the
judgment in Trafigura India Pvt. Ltd. (supra).

107. We agree with the submission of Mr. Venkatraman. This we say so,
because as contended by Mr. Venkatraman that the language of AITIGA
uses the word ―may‖ instead of ―shall‖, which is indicative that the
mechanism for requesting official verification is facilitative in nature and
not obligatory. So it follows that the objective of the verification process is
verification of fact, which in a given case is not required on the face of
evidence emerging through independent investigation including, as in this
case, the information given by the exporter through its representative law
firm. In so far as the reliance placed by Mr. Singh on the judgment passed
by the Supreme Court in the case of Kothari Metals (supra) is concerned,
the Supreme Court has held that the issue raised regarding the efficacy of
Article 24 cannot be adjudicated by the competent authority. It is not such a
case in these petitions. Hence the judgment is not applicable. The Gujarat
High Court in Trafigura India Pvt. Ltd. (supra) while dealing with similar
show cause notices issued under the provisions of the Customs Act has also
held as under:-

“18. In light of forgoing discussion and delineation, the
following propositions could be deduced.

xxx xxx xxx

(x) Non-observance of mechanism for dispute resolution as
per AIFTA Article 24 cannot have the effect and consequence

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of invalidating the 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
formed a part of the domestic or municipal laws or transformed
into domestic or municipal laws to seek their enforcement
before a domestic or municipal Court.

52. A Division Bench in the Gujarat High Court in Trafigura
(supra) has summarised the legal position precisely in the
context of the invocability of Article 24 of AIFTA by detailed
reference to the DOGPTA Rules of 2009. This decision affords
answers to most of the issues raised by the petitioners. Even the
factual base in the two matters does not differ significantly. In
the Gujarat case, the challenge was to the orders holding that
there was fraud, suppression and misrepresentation in availing
the benefits of the Customs exemption notification in respect of

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tin ingots imported from Malaysia. Since there was ample
material and the show cause notices suffered from no
infirmities, the orders were upheld. In the cases at hand, the
challenge is to the show cause notices making the same or
similar allegations. The allegations in the show-cause notices
have yet to be adjudicated. The primary challenge before both
courts was that the Customs authorities were denuded of their
statutory powers in such cases due to the specialised dispute
resolution mechanism outlined in Article 24 of the AIFTA.

xxxx xxxx xxxx xxxx

56. Section 28 of the Customs Act confers ample powers upon
the Customs authorities to investigate into and adjudicate upon
violations due to misrepresentation, suppression or fraud.

Based on the material collected by the Customs authorities, a
show cause notice has been issued to the Petitioners giving
them full opportunity to explain how there was
misrepresentation, suppression or fraud on the issue of RCV.
There is no legal or jurisdictional infirmity in the issue of such
show cause notices. The provisions of Article 24 of AIFTA do
not deprive the customs authorities of their powers or
jurisdiction to issue such show cause notices. The Petitioners
virtually insist that the treaty provisions prevail over national
laws, even though the treaty provisions on which they rely have
not been incorporated into any national law. This is clearly
impermissible, and the challenge on the lack of jurisdiction to
issue the show cause notices cannot be sustained.

57. Incidentally, we must note the observations made by the
Gujarat High Court in Trafigura (supra), which express doubts
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

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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 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.

60. The arguments about COO being conclusive, etc., have
never been elaborated in the pleadings. If Mr. Mishra’s
submission is correct, then, in several matters concerning
imports of Tin Ingots from Malaysia, a detailed investigation
revealed the extent of misrepresentation, suppression and
fraud. In Trafigura (supra), the Gujarat High Court was
dealing with a final order made by the Customs Authorities.
Based on the materials on record, the Gujarat High Court
found no reason to interfere with the factual findings recorded
by the authorities and declined to interfere.

61. In the present case, the Customs Authorities are yet to
adjudicate the matter, and therefore, it is not for this Court to
make any observations that would even remotely prejudice the
interest of the Petitioners or the Respondents. However,
attempts to stall or prevent the adjudication proceedings, as
outlined in the impugned show cause notices, cannot be
encouraged when exercising our extraordinary and equitable

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jurisdiction under Article 226 of the Constitution.

62. The primary argument that the impugned show cause
notices are ultra vires for failing to comply with the provisions
of Article 24 of AIFTA lacks merit. The Gujarat High Court has
addressed this issue in detail and rejected the identical
contention regarding the importation of tin ingots from
Malaysia. Mr. Nankani’s assertion that the Gujarat High Court
failed to consider certain matters is untenable. In any event,
even when considering those matters, we see no reason to
adopt a view different from that taken by the Gujarat High
Court.”

(emphasis supplied)

109. At this stage, we may also refer to the judgment referred to by Mr.
Balbir Singh in the cases of Bullion and Jewellers Association (supra) and
Noble Import Pvt. Ltd.(supra) to contend that the process which has been
laid down under the AIFTA being a mandatory process and such process
having not been followed rather a show cause notice has been issued, a writ
petition shall be maintainable is concerned, the said judgment has no
applicability in the facts of this case, inasmuch as, the issue in the said
petitions was only based on Certificate of Origin (COO). Moreover, the said
judgement precedes the 2020 amendment through which Section 28DA
came into force which has changed the statutory background concerning the
procedure to be followed to look into the claims of preferential duty. Hence,
it was in that context the Court held the petition to be maintainable.

110. In view of the settled position of law, as noted above, more so, the
High Court of Rajasthan on identical notices has dismissed the writ
petitions, there is no reason for this Court to take a different view. We are of
the view that these petitions filed by the petitioners are liable to be
dismissed. We order accordingly. Suffice to state that the petitioners shall be

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at liberty to raise all pleas before the authority considering the show cause
notices and it is required for the adjudicating authority to pass a reasoned
and speaking order(s). No costs.

V. KAMESWAR RAO, J

VINOD KUMAR, J
APRIL 28, 2026
sr/rk/mk

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Rajasthan Metals vs Union Of India & Ors on 28 April, 2026

Delhi High Court