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2026 Supreme(Bom) 992
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G. S. Kulkarni, Aarti Sathe, JJ.
Covestro India Private Limited - Petitioner
Versus
Assistant Commissioner of Customs - Respondent
Writ Petition No.11540 of 2024, Writ Petition No.12428 of 2024, Writ Petition No.12430 of 2024, Writ Petition No.12432 of 2024, Writ Petition No.12470 of 2024
Decided On : 16-04-2026
For the Petitioner: Mr.Dharan Gandhi with Ms.Aanchal Vyas
For the Respondent: Mr.Siddharth Chandrashekhar with Ms.Nyati Mankad, Ms.Priyanka Singh, Mr. Siddharth Chandrashekhar with Ms.Sangeeta Yadav
Subordinate regulatory authorities cannot issue administrative circulars or public notices that impose additional requirements contradicting statutory rules, trade agreements, or instructions issued by the central governing board, as such actions exceed their jurisdiction and violate the principle of consistent legal application in tax and trade matters.
Headnote:(A) Customs Act, 1962 - Section 28DA - Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 - Claim of preferential rate of duty - Verification of country of origin - Requirement that administrative instructions must be in consonance with Section 151A and established statutory provisions - Public notices issued by local custom authorities cannot override or dilute benefits derived from treaty-based trade agreements or instructions issued by the central revenue board. (Paras 8, 9, 22)
(B) Administrative Law - Hierarchy of orders - Subordinate authorities cannot issue administrative notices that impose additional procedural burdens beyond those prescribed by statutory rules or superior circulars - Rejection of preferential tariff claims based on unauthorized administrative mandates is legally unsustainable and subject to judicial review under Article 226. (Paras 12, 18, 22)
Facts of the case:
Importers claimed preferential tariff benefits under international trade agreements by submitting required certificates of origin. Local customs authorities introduced additional documentation requirements through public notices, specifically concerning disclosures in third-party invoicing, which were not provided for in the governing trade agreements or central statutory rules. The initial assessment orders rejected the claims for preferential duty based on non-compliance with these specific local public directives.
Findings of Court:
The court observed that local custom houses lack the jurisdiction to issue administrative notices that conflict with or expand upon statutory rules set by the apex board. The rejection of claims based on such notices caused prejudice to the trade and violated the principles of consistent statutory implementation. The court held that administrative procedures must remain aligned with the specific provisions of trade agreements and the parent act.
Issues: Whether subordinate customs authorities possess the legal authority to issue public notices that impose procedural obligations beyond those established by statutory rules, and whether such notices can form the sole basis for denying statutory preferential tariff benefits.
Ratio Decidendi: Administrative directions issued by subordinate authorities cannot be used to circumvent or nullify rights granted under international trade agreements or statutory rules. When conflict arises between local administrative notices and the broader regulatory framework, the statutory rules and central circulars must prevail. The duty of the tax authority is to ensure compliance in accordance with the legislative intent and treaty obligations rather than imposing arbitrary administrative barriers.
Result: Impugned orders set aside and matters remanded back to the assessing authority for fresh consideration in accordance with law.
| Table of Content |
|---|
| 1. legal framework for fta preferential duty claims and carotar requirements. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 2. administrative challenges to fta verification procedures and impugned assessment orders. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17) |
| 3. supervening instructional clarity from cbic renders prior verification procedures obsolete. (Para 18 , 19 , 20) |
| 4. public notices cannot contravene superior tariff legislation or trade agreements. (Para 21 , 22) |
| 5. remand of assessment proceedings for de novo consideration under current legal guidelines. (Para 23 , 24) |
JUDGMENT :
G.S.Kulkarni, J.
1. This is a batch of Petitions by the common Petitioner, hence the same are being disposed of by this common Judgment. Writ Petition No.11540 of 2024 is argued as a lead matter. The decision on this petition would also govern the other connected petitions. For convenience, we refer to the proceedings of Writ Petition No.11540 of 2024.
2. The Writ Petition in question is filed praying for the following substantive reliefs :
“(a) that this Hon’ble Court may be pleased to issue a Writ of Certiorari or a Writ in the nature of Certiorari or Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, Order or direction, calling for the records of the Petitioner’s case and after going into the legality and propriety thereof, to quash and set aside the impugned order dated 12.06.2024 (Exhibit Q) passed by Respondent no.1 and to allow the claim of preferential rate of duty as claimed in the Bill of Entries (Exhibit K to O).
(b) This Hon’ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, Order or direction, directing the Respondents, its servants, subordinates, agents and successors in office :
i. to forthwith withdraw and/or cancel the impugned order dated 12.06.2024 (Exhibit Q) passed by Respondent no.1 and to allow the claim of preferential rate of duty as claimed in the Bill of Entries (Exhibit K to O).
ii. to forthwith forbear from taking any steps whatsoever pursuant to or in implementation of the impugned order dated 12.06.2024 (Exhibit Q) passed by Respondent no.1.
(c) that this Hon’ble Court be pleased to issue a writ of prohibition or a writ in the nature of prohibition or any other appropriate writ, order or direction under Article 226 of the Constitution of India prohibiting Respondents from taking any steps in furtherance of the impugned order dated 12.06.2024 (Exhibit Q) passed by Respondent no.1.
(e) that this Hon’ble Court be pleased to declare the Public Notice bearing number 33/2024 dated 20.03.2024 (Exhibit H) and Public Notice bearing number 55/2024 dated 20.03.2024 (Exhibit J) issued by Respondent no.2 as unconstitutional and ultra vires the provisions of the Customs Act, Notifications and Rules issued thereunder and Article 14, 191(g) and 265 of the Constitution of India.”
3. The Petitioner is aggrieved by the order dated 12th June 2024 passed by the Assistant Commissioner of Customs, Group-II, Nhava Sheva, Uran, Raigad, whereby the Petitioner’s claim for the preferential rate of duty under the Notification No.046/2011 (ASIAN-India Free Trade Agreement (AIFTA), as asserted by the Petitioner under the Bills of Entry subject matter of the petition, has been rejected. The operative order is required to be noted, which reads thus :
“ORDER
9. I reject the claim of preferential rate of duty under notification No.046/ 2011 (ASEAN-India Free Trade Agreement [AIFTA]) claimed by the importer under Bills of Entry mentioned in the Table-A.
10. This order is issued without prejudice to any other action that may be taken against aforesaid goods and noticee or any other persons concerned under the Customs Act, 1962 or Rules made thereunder and being in force in India.”
4. In the memo of the petition, the Petitioner has contended that it is incorporated in India and belongs to the Covestro group, which is engaged in the business of manufacturing and
