[Cites 10, Cited by 0]
Bombay High Court
Covestro India Pvt Ltd vs Assistant Commissioner Of Customs ... on 16 April, 2026
Author: G.S.Kulkarni
Bench: G. S. Kulkarni
2026:BHC-AS:19076-DB 1 of 26 4.WP.11540.2024.DOC
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.11540 OF 2024
Covestro India Private Limited,
Office at SB-801, 8th floor, Empire Tower,
Cloud City Campus, Airoli,
Thane-Belapur Road, Navi Mumbai-400708. Petitioner
versus
1. Assistant Commissioner of Customs
Group II (G), NS-I, JNCS, Nhava Sheva,
Uran, Raigad-400707.
2. Commissioner of Customs (NS-III),
Turant Suvidha Kendra, First Floor,
JNCH, Nhava Sheta, Uran, Raigad-400 707.
3. Union of India through the Secretary,
Deptt. Of Revenue, Ministry of Finance,
North Block, New Delhi-110 001. Respondents
WITH
WRIT PETITION NO.12430 OF 2024
Covestro India Private Limited,
Office at SB-801, 8th floor, Empire Tower,
Cloud City Campus, Airoli,
Thane-Belapur Road, Navi Mumbai-400708. Petitioner
versus
1. Assistant Commissioner of Customs
Group II (G), NS-I, JNCS, Nhava Sheva,
Uran, Raigad-400707.
2. Commissioner of Customs (NS-III),
Turant Suvidha Kendra, First Floor,
JNCH, Nhava Sheta, Uran, Raigad-400 707.
3. Union of India through the Secretary,
Deptt. Of Revenue, Ministry of Finance,
North Block, New Delhi-110 001. Respondents
WITH
WRIT PETITION NO.12470 OF 2024
Covestro India Private Limited,
Office at SB-801, 8th floor, Empire Tower,
Cloud City Campus, Airoli,
Thane-Belapur Road, Navi Mumbai-400708. Petitioner
M.S.Thatte
2 of 26 4.WP.11540.2024.DOC
versus
1. Assistant Commissioner of Customs
Group II (G), NS-I, JNCS, Nhava Sheva,
Uran, Raigad-400707.
2. Commissioner of Customs (NS-III),
Turant Suvidha Kendra, First Floor,
JNCH, Nhava Sheta, Uran, Raigad-400 707.
3. Union of India through the Secretary,
Deptt. Of Revenue, Ministry of Finance,
North Block, New Delhi-110 001. Respondents
WITH
WRIT PETITION NO.12432 OF 2024
Covestro India Private Limited,
Office at SB-801, 8th floor, Empire Tower,
Cloud City Campus, Airoli,
Thane-Belapur Road, Navi Mumbai-400708. Petitioner
versus
1. Assistant Commissioner of Customs
Group II (G), NS-I, JNCS, Nhava Sheva,
Uran, Raigad-400707.
2. Commissioner of Customs (NS-III),
Turant Suvidha Kendra, First Floor,
JNCH, Nhava Sheta, Uran, Raigad-400 707.
3. Union of India through the Secretary,
Deptt. Of Revenue, Ministry of Finance,
North Block, New Delhi-110 001. Respondents
WITH
WRIT PETITION NO.12428 OF 2024
Covestro India Private Limited,
Office at SB-801, 8th floor, Empire Tower,
Cloud City Campus, Airoli,
Thane-Belapur Road, Navi Mumbai-400708. Petitioner
versus
1. Assistant Commissioner of Customs
Group II (G), NS-I, JNCS, Nhava Sheva,
Uran, Raigad-400707.
2. Commissioner of Customs (NS-III),
Turant Suvidha Kendra, First Floor,
JNCH, Nhava Sheta, Uran, Raigad-400 707.
3. Union of India through the Secretary,
M.S.Thatte
3 of 26 4.WP.11540.2024.DOC
Deptt. Of Revenue, Ministry of Finance,
North Block, New Delhi-110 001. Respondents
_______
Mr.Dharan Gandhi with Ms.Aanchal Vyas for Petitioner.
Mr.Siddharth Chandrashekhar with Ms.Nyati Mankad, Ms.Priyanka Singh for
Respondents in WP.11540/2024.
Mr.Siddharth Chandrashekhar with Ms.Sangeeta Yadav for Respondents in WP.
Nos.12470/2024, 12432/2024, 12428/2024, 12430/2024.
_______
CORAM: G. S. KULKARNI &
AARTI SATHE, JJ.
DATE: 16th April 2026
ORAL JUDGMENT : (Per : 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 :
M.S.Thatte
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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 12 th 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 trading of polycarbonate resins, compounds and
their intermediaries such as films, polyurethane raw materials, their formulations,
M.S.Thatte
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thermoplastic urethanes and their films, raw materials for the manufacturing of
polyurethane based coatings, adhesives and specialties. The Petitioner's case is that
for its business activities it regularly imports certain goods from the associated
enterprises viz. Makrofol (speciality film roll), Bayfol (speciality film roll),
Makrolon (polycarbonate resin), Bayblend (Polycarbonate resin) etc. Some of such
goods are used as raw material for manufacturing and they originate in Thailand.
It is the specific contention of the Petitioner that the Petitioner has been importing
such goods for more than ten years.
5. The Petitioner has contended that India has entered into Free Trade
Agreements with various South Asian countries, which inter alia provide for
preferential rate of duties on import of certain goods, which the Petitioner has been
claiming over a period of time. In such context, the Central Government notified
various products vide Notification No.85/2004 on 31 st August 2004 under the
India-Thailand Free Trade Agreement, under which the Government has
exempted duty of customs leviable thereon specified in the first schedule of the
Customs Act, 1962 (`the Act') and in excess of the amount calculated at 50% of the
rate specified in the corresponding entry in column (4) of the Table in the said
Notification. The condition prescribed for claiming such preferential rate of duty
is that the importer should prove to the satisfaction of the Deputy Commissioner
of Customs or Assistant Commissioner of Customs, as the case may be, that the
goods in respect of which the exemption under the Notification is claimed, are of
the origin of Thailand in accordance with the provisions of Interim Rules of Origin
published with the Notification of the Government of India in the Ministry of
M.S.Thatte
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Finance, Department of Revenue No.101/2004-Customs (N.T), dated 31 st august
2004, which came into force from 1 st September 2004. It is the Petitioner's case
that the Central Government had notified interim rules of origin for preferential
tariff concessions for trade between India and Thailand vide Notification
No.101/2004, dated 31st August 2004. The said Notification prescribed rules for
determining the origin of products. The consequence, according to the Petitioner,
is that for the goods originating from Thailand on a valid Country of Origin
(`CoO') certificate, if the goods were to be directly consigned to India, then the
preferential rate of duty would be granted on the basis of such valid CoO issued by
the Authority of Thailand. According to the Petitioner, the thrust is on the country
of origin of the goods and it is only when the transportation of goods is through
some other territory, that certain additional documents are required.
6. The Petitioner has set out different Notifications issued in this regard
by the Central Government involving various products granting preferential rate of
customs duty bearing Notification No.85/2004, dated 31st August 2004,
Notification No.101/2004, dated 31st August 2004, Notification No.153/2009,
dated 31st December 2009, Notification No.189/2009 dated 31st December 2009
and Notification No.153/2009, dated 31st December 2009 and Interim Rules of
Origin, whereunder the Central Government notified, that the goods in respect of
which an exemption under the notification is claimed, are of the origin of countries
specified in accordance with provisions of Customs Tariff (Determination of
Origin of Goods under the Preferential Trade Agreement between the
Governments of Member States of the Association of Southeast Asian Nations
M.S.Thatte
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(ASEAN) and the Republic of India) Rules, 2009, which also prescribe the rules
for determining the country of origin.
7. The Petitioner has also referred to subsequent Notification No.46/2011
(Customs), dated 1st June 2011, which superseded Notification No.153/2009
(supra). The Notification No.46/2011 provided for preferential rate of duty in
respect of goods specified therein from, inter alia, Thailand. In short, the case of
the Petitioner is that under all such Notifications, the Petitioner had availed the
duty benefit by claiming preferential rate of duty.
8. The Petitioner contends that Section 28DA was inserted by the Finance
Act, 2020 to determine the place of origin, under which an importer making a
claim of preferential rate of duty in terms of any trade agreement, shall make a
declaration that goods qualify as originating goods for preferential rate of duty
under such agreement. The importer was also required to provide sufficient
documents to show the country of origin, regional value of the imported goods and
to show that the products are specified in the rules of origin in the trade agreement.
Section 28DA is required to be noted, which reads thus :
"S.28DA - Procedure regarding claim of preferential rate of duty -
(1) An importer making claim for preferential rate of duty, in terms of any trade
agreement, shall,--
(i) make a declaration that goods qualify as originating goods for preferential
rate of duty under such agreement;
(ii) possess sufficient information as regards the manner in which country of
origin criteria, including the regional value content and product specific criteria,
specified in the rules of origin in the trade agreement, are satisfied;
(iii) furnish such information in such manner as may be provided by rules;
M.S.Thatte
8 of 26 4.WP.11540.2024.DOC
(iv) exercise reasonable care as to the accuracy and truthfulness of the
information furnished.
(2) The fact that the importer has submitted (proof) of origin issued by an Issuing
Authority shall not absolve the importer of the responsibility to exercise reasonable
care.
(3) Where the proper officer has reasons to believe that country of origin criteria
has not been met, he may require the importer to furnish further information,
consistent with the trade agreement, in such manner as may be provided by rules.
(4) Where importer fails to provide the requisite information for any reason, the
proper officer may,-
i) cause further verification consistent with the trade agreement in such
manner as may be provided by rules;
(ii) pending verification, temporarily suspend the preferential tariff treatment to
such goods:
Provided that on the basis of the information furnished by the importer or the
information available with him or on the relinquishment of the claim for
preferential rate of duty by the importer, the Principal Commissioner of Customs
or the Commissioner of Customs may, for reasons to be recorded in writing,
disallow the claim for preferential rate of duty, without further verification.
(5) Where the preferential rate of duty is suspended under sub-section (4), the
proper officer may, on the request of the importer, release the goods subject to
furnishing by the importer a security amount equal to the difference between the
duty provisionally assessed under section 18 and the preferential duty claimed:
Provided that the Principal Commissioner of Customs or the Commissioner
of Customs may, instead of security, require the importer to deposit the differential
duty amount in the ledger maintained under section 51A.
(6) Upon temporary suspension of preferential tariff treatment, the proper officer
shall inform the Issuing Authority of reasons for suspension of preferential tariff
treatment, and seek specific information as may be necessary to determine the
origin of goods within such time and in such manner as may be provided by rules.
(7) Where, subsequently, the Issuing Authority or exporter or producer, as the case
may be, furnishes the specific information within the specified time, the proper
officer may, on being satisfied with the information furnished, restore the
preferential tariff treatment.
(8) Where the Issuing Authority or exporter or producer, as the case may be, does
not furnish information within the specified time or the information furnished by
him is not found satisfactory, the proper officer shall disallow the preferential tariff
treatment for reasons to be recorded in writing:
M.S.Thatte
9 of 26 4.WP.11540.2024.DOC
Provided that in case of receipt of incomplete or non-specific information, the
proper officer may send another request to the Issuing Authority stating
specifically the shortcoming in the information furnished by such authority, in
such circumstances and in such manner as may be provided by rules.
(9) Unless otherwise specified in the trade agreement, any request for verification
shall be sent within a period of five years from the date of claim of preferential rate
of duty by an importer.
(10) Notwithstanding anything contained in this section, the preferential tariff
treatment may be refused without verification in the following circumstances,
namely:--
(i) the tariff item is not eligible for preferential tariff treatment;
(ii) complete description of goods is not contained in the (proof of origin);
(iii) any alteration in the (proof of origin) is not authenticated by the Issuing
Authority;
(iv) (the proof) of origin is produced after the period of its expiry, and in all
such cases, (the proof) of origin shall be marked as ''IN APPLICABLE''
(11) Where the verification under this section establishes non-compliance of the
imported goods with the country of origin criteria, the proper officer may reject
the preferential tariff treatment to the imports of identical goods from the same
producer or exporter, unless sufficient information is furnished to show that
identical goods meet the country of origin criteria.
Explanation.--For the purposes of this Chapter,--
[(a) "proof of origin" means a certificate or declaration issued in accordance with a
trade agreement certifying or declaring, as the case may be, that the goods fulfil the
country of origin criteria and other requirements specified in the said agreement;]
(b) "identical goods" means goods that are same in all respects with reference to the
country of origin criteria under the trade agreement;
[(c) "Issuing Authority" means an authority or person designated for the purposes
of issuing proof of origin under a trade agreement;]
(d) "trade agreement" means an agreement for trade in goods between the
Government of India and the Government of a foreign country or territory or
economic union."
9. It is the Petitioner's case that Rules for determining the country of
origin were replaced in the year 2020 and the Central Government issued Customs
M.S.Thatte
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(Administration of Rules of Origin under Trade Agreements) Rules, 2020
(`CAROTAR 2020') vide Notification No.81/2020-Customs (N.T), dated 21 st
August 2020. The Rules were brought into force with effect from 21 st September
2020. The Rules were applied to import of goods into India where the importer
makes a claim of preferential rate of duty in terms of a trade agreement. The
Petitioner has also referred to Circular No.38/2020, dated 21 st August 2020, which
was issued by the Central Board of Indirect Taxes and Customs (CBIC), Ministry
of Finance, issuing clarification in terms of Section 28DA of the Act. The Circular
aimed at supplementing the operational certification procedures related to
implementation of Rules of Origin as prescribed under the respective trade
agreements. It also stipulated that in case there is any doubt with regard to the
origin of goods, information should first be called from the importer of the goods,
in terms of Rule 5 read with Rule 4 of CAROTAR, 2020 before initiating
verification with the partner country in terms of Rule 6.
10. It is on the aforesaid backdrop the Petitioner has contended that on 20 th
March 2024, the Respondent no.2 Commissioner of Customs, (NS-III), Turant
Suvidha Kendra, Nhava Sheva, issued a public notice No.33/2024 stating that
there are practical problems faced in case of third party invoicing, including cases
where FOB value is not indicated in the CoO certificate, third party invoices do
not mention FOB value etc and thereby prescribing additional requirements. As
the Petitioner is aggrieved by issuance of such public notice, which according to the
Petitioner has led to the passing of the impugned order, the said public notice is
required to be extracted, which reads thus :
M.S.Thatte
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"OFFICE OF THE COMMISSIONER OF CUSTOMS (NS-III),
TURANT SUVIDHA KENDRA, FIRST FLOOR, JAWAHARLAL
NEHRU CUSTOM HOUSE,
POST: SHEVA, TALUKA: URAN, DIST: RAIGAD,
MAHARASHTRA -- 400707
DIN:20240378NV0000000C54 DATE:20.03.2024
Subject: Certain FTA certificate verification in TSK
under CAROTAR Rules-2020-reg.
Attention is drawn towards Rule 4, 5 and 6 of Customs (Administration of
Rules of Origin under Trade Agreements) Rules, 2020 (Notification No. 81/2020 -
Customs (N.T.) dated 21st August, 2020) also known as CAROTAR Rules-2020,
which mandates requisition of certain information from exporter of originating
country. In cases where there is reason to believe that origin criteria prescribed in the
respective Rules of Origin have not been met, Customs official may seek
information and supporting documents, as may be deemed necessary. This
requirement is further cemented by section 28DA(3) of the Customs Act, 1962
mandating importer to furnish further information to the proper officer in case of
reasonable doubt regarding country of origin criteria.
2. The Turant Suvidha Kendra (TSK) official is responsible for verification of
certain documents uploaded in e-sanchit module of ICES and defacing of original
documents including FTA prescribed Country of Origin (COO) certificate (FTA
certificate). In recent past, the following difficulties are being faced by the TSK
official during verification and defacing of FTA certificate in case of 3rd Party
invoicing:
(i) The presented FTA certificate does not provide FOB value in the requisite
column.
(ii) The 3rd Party invoice does not indicate FOB value as mentioned in the FTA
certificate along with other cost and services,
(iii) The 3rd Party invoice contains a greater number of items than mentioned in
FTA certificate,
(iv) The CTH in the Bill of Entry filed on the basis of 3rd Party invoice does
not match with the CTH indicated in the FTA Certificate.
3. As an alternative to rigorous process of verification of FTA certificate from
the exporting country as laid down in CAROTAR Rules-2020 in each case, and as a
measure to ease the verification and defacing procedure of such FTA certificate by
TSK official, following procedures are being prescribed:
(i) The 3rd Party invoice which does not indicate FOB value as mentioned in
FTA certificate along with other cost and services:
The importer will submit invoice of exporter of originating country on the basis of
which FTA certificate was issued.
(ii) The 3rd Party invoice contains a greater number of items than mentioned in FTA
certificate. The importer will submit invoice of exporter of originating country on the basis of
which FTA certificate was issued and amend the Bill of Entry accordingly.
(iii) The CTH in the Bill of Entry filed on the basis of 3rd Party invoice does
M.S.Thatte
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not match with the CTH indicated in the FTA Certificate:
The importer will submit invoice of exporter of originating country on the basis of
which FTA certificate was issued and amend Bill of Entry accordingly.
4. In case, the presented FTA certificate does not provide even FOB value in
the requisite column, except the FTA certificate which do not have FOB value
column (e.g. CEPA), the FTA certificate may be referred to Group for necessary verification
from exporting country in terms of CAROTAR Rules- 2020.
5. It may be emphasized that section 28DA(4) of the Customs Act, 1962
provides that if importer fails to provide requisite information proper officer may cause
verification of FTA certificate in terms of CAROTAR Rules, 2020.
6. All the previous Public Notices and Standing Orders on this issue stand
modified to the above extent.
7. This Public Notice should be considered as a Standing Order for the
concerned Officers and Staff of this Custom House.
8. Any difficulty faced in implementation of this public notice may be brought
to the notice of AC/DC recharge of TSK.
Sd/-
(Ashwini Kumar)
Commssioner Of Customs (NS-III)
Copy to :
1. The Chief Commissioner of Customs, Mumbai Zone-II, Nhava Sheva.
2. The Commissioner of Customs, NS-I, NS-II, NS-III, NS-IV, NS-V, NS-GJNCH, Nhava
Sheva.
3. Additional/ Joint/ Dy./ Asstt. Commissioners of Customs, JNCH, NhavaSheva.
4. AC/DC, EDI for uploading on JNCH website.
5. Office Copy"
11. The said public notice No.33/2024 in fact is stated to be suffering from
serious infirmities including of the jurisdiction of the Commissioner of Customs
who issued the same, which according to the Petitioner has brought the entire
trade of the Petitioner and other similar importers to a stand still. It is the
Petitioner's case that lot of hue and cry was raised against the said public notice and
against the same many importers had approached CBIC being aggrieved by the
criteria which was prescribed, which in fact according to the Petitioner had
M.S.Thatte
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amounted to complete deviation from the free trade agreement in question and
also re-writing of the rules by publishing the public notice.
12. In such context, according to the Petitioner, on 8 th June 2024 the CBIC
specifically issued a letter addressed to the Commissioner of Customs, Mumbai
Customs Zone-II, JNCH, Raigad issuing the following communication in regard to
verification of FOB value indicated in the CoO Certificates issued as per ASEAN-
India Trade in Goods Agreement, Notification No.189/2009-Cus (NT) dated 31 st
December 2009. The said communication is required to be noted, which reads
thus :
"F.No. 20000/6/2015-OSD(ICD)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes & Customs
International Customs Division
Room No. 277 A, North Block, New Delhi- 110 001
Dated the 8th June, 2024
To,
The Chief Commissioner of Customs
Mumbai Customs Zone - II
JNCH, Raigad, Maharashtra.
Sir,
Subject: Verification of FOB value indicated on COO Certificates issued as per
ASEAN-India Trade in Goods Agreement - Notification No. 189/2009-Cus (NT)
dated 31.12.2009 - regarding.
Please refer to your letter dated 27.05.2024 in respect of the above-
mentioned subject.
2. The issue raised has been examined. In this regard, observations are as
follows:
i. As per extant provisions of CAROTAR, 2020 while the importer may be
requested for supporting information but he is under no compulsion to submit
commercially sensitive information such as the export invoice in case of third-party
M.S.Thatte
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invoicing. The bill-to-ship-to business model ensures commercial confidentiality
in global value chains.
CAROTAR, 2020 does not require an importer to seek details, which may be
business confidential. Rule 5(4) of CAROTAR 2020 provides that in case the
importer fails to or is unable to provide sufficient information/documents, the
verification process as prescribed under the trade agreement shall have to be
initiated.
ii. Section 28DA read with Rule 3(2) of CAROTAR 2020 specifies the
limited conditions under which the preference may be denied without initiating a
venfication. In addition, Rule 5(5) specifies that a preferential claim can be denied
without further veritication only when the intormation and documents fumished
by the importer and available on record provide sufficient evidence to prove that
goods do not meet the origin criteria prescribed in the respective Rules of Origin.
In the present case, it appears that the field officers are finding it difficult to
verify value addition due to the unavailability of the export invoice, where third-
party invoicing is taking place. Any verification, if required to be done, should
only be carried out in terms of above legal provisions.
iii. Further, it is submitted that Article 22 of the Operational Certification
Procedures for the Rules of Origin of AIFTA, allows third country invoicing
provided the product meets the Origin Criteria under the AIFTA Rules of Origin.
As per Appendix A of AIFTA, FOB Price equals a sum of Ex-Factory Price
and other costs. It is pertinent to mention that `other costs' covers those costs
which are incurred in placing the products in the ship for export. Therefore, the
Value Addition (VA) is to be calculated on the FOB value mentioned in the
commercial invoice, issued by the manufacturer/supplier/consignor of AIFTA
state. Moreover, the value indicated in the invoice raised by the consignor of
AIFTA to the third party shall, in all probability, not be the same as the one
mentioned in the sales invoice raised by the third party.
iv. The fact of VA at AIFTA country and VA considering third party invoice
should also be determining factor whether a verification process is required under
CAROTAR, 2020.
3. In view of the above, it is requested to re-examine the matter and provide
comments/action taken in the matter. Further, it is mentioned that trade has
represented delay in clearance of goods on account of the Public Notice issued by
NS-II Customs Commissionerate. It is requested that goods may be released
withut delay, if required including under the provisions of CAROTAR, 2020.
Encl : as above. Yours Sincerely,
Sd/-
(Neetisha Verma)
STO(ICD)
Telephone no.(+91)1123094510
e-mail: [email protected]"
M.S.Thatte
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13. Consequent thereto and in supersession of the earlier public notice, a
fresh public notice No.55/2024, dated 24th June 2024 was issued by the
Commissioner of Customs, this time with the approval of the Commissioner of
Customs, Respondent no.2, setting out guidelines for verification under the
CAROTAR, 2020 of the CoO certificates issued under various preferential trade
agreements commonly referred as Free Trade Agreements prescribing the
procedure, rectifying the public notice No.33/2024 dated 20 th March 2024. The
said public notice No.55/2024, dated 24th June 2024 reads thus :
"OFFICE OF THE COMMISSIONER OF CUSTOMS (NS-III),
TURANT SUVIDHA KENDRA, GROUND FLOOR,
JAWAHARLAL NEHRU CUSTOM HOUSE,
POST: SHEVA, TALUKA: URAN, DIST: RAIGAD,
MAHARASHTRA -- 400 707
DIN: 20240678NV000000BA3C Dated:24.06.2024
Subject: Guidelines for verification under CAROTAR 2020, of the Country of
Origin Certificates (COO) issued under various Preferential Trade Agreements
(commonly also referred to as Free Trade Agreements -- FTAs) - reg.
Attention is drawn towards Section 28DA of the Customs Act, 1962, read
with Rules 4, 5 and 6 of the Customs (Administration of Rules of Origin under
Trade Agreements) Rules, 2020, notified vide Notification No. 81/2020-Customs
(N.T.) dated, 21st August, 2020, also known as CAROTAR 2020, and CBIC
Circular No. 38/2020-Customs dated 21.08.2020, which empower the proper
officer to seek information and supporting documents from the importer claiming
preferential rate of duty, if the proper officer has reason to believe that origin
criteria prescribed in the respective Rules of Origin have not been met.
2. The officials of Turant Suvidha Kendra (TSK) are responsible for verification
of relevant documents uploaded in e-Sanchit module of ICES and defacing of
original documents, including the Country of Origin Certificate issued under the
Preferential Trade Agreements (hereinafter referred to as FTA-COO). In recent
past, following difficulties were being faced by the officials of TSK in verification
and defacing of FTA-COO in case of third country invoicing:
(i) The presented FTA-COO does not provide FOB value in the relevant column;
(ii) The third country invoice does not indicate FOB value indicated in the
FTA-COO;
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(iii) The third country invoice indicates a greater number of items than indicated
in the FTA-COO;
(iv) The Bill of Entry presented before Customs on the basis of third country
invoice indicates a different CTH as compared to the CTH indicated in the FTA-
COO.
3. The procedure for verification of the FTA-COO, as provided in Public Notice
No.33/2024 dated 20.03.2024 has been reviewed in detail, taking into account
the pattern of documentation in respect of third country invoicing for imports
made with claim of benefit under the Preferential Trade Agreements, trade
practices in vogue and in light of the relevant statutory provisions. In supersession
of the procedure prescribed vide the said Public Notice, for verification of
eligibility of benefit of the relevant FTA on the basis of scrutiny of documents, the
following procedure is prescribed :
i. The importer will need to submit the FTA-COO indicating the FOB value
in the relevant column of the FTA-COO, along with the third country invoice
details. The amount of freight and insurance will also need to be disclosed, either
in the third country invoice or by submission of freight certificate and insurance
receipt. However, this will not be applicable in case of FTA-COO which does not
have FOB value column, e.g. FTA-COO issued under India-Japan CEPA.
ii. If the INCOTERMS of third country invoices is FOB, and the FOB value
indicated on the third country invoice is same as that indicated on the FTA-COO,
the same prima facie indicates that the FOB value indicated on the FTA-COO
includes the value addition (profit and other charges) of the third country supplier.
The same is not permitted under the preferential Trade Agreements. In such
cases, the importer shall include an explanation for the identical FOB values
mentioned in the two documents, include an explanation for the identical FOB
values mentioned in the two document, viz. FTA-COO and the third country
invoice at the time of submission of self-assessed Bill of Entry.
iii. If the Bill of Lading which indicates "FREIGHT PREPAID", and which is
issued in favour of the Shipper located in the country of the origin (exporting
country), then the importer will need to submit freight certificate if the freight has
been paid by any person other than the Shipper indicated on the Bill of Lading.
iv. In the cases wherein the FTA-COO is issued on the basis of third country
invoice, i.e. the details of the third country invoices are mentioned in the FTA-
COO, then the values mentioned in the said two documents FTA-COO and third
country invoice need to be in the same currency. This will help in quick
verification of eligibility of benefit of the relevant FTA on the basis of scrutiny of
documents.
v. If the third country invoice indicates a greater number of items than
indicated in the FTA-COO, then benefit of FTA will be admissible to only the
items covered in the FTA-COO and the balance items will be assessed at merit
rate.
vi. If the third country invoice indicates a different CTH as compared to the
CTH indicated in the FTA-COO, and the product description is the same in both
the documents, then the importer will be required to self declare the preferred
CTH in the Bill of Entry. The proper officer will scrutinize the documents and
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17 of 26 4.WP.11540.2024.DOC
take appropriate decision as part of assessment and as per provisions of the relevant
FTA notifications including related non-tariff notification. In case the product
description in the third country invoice and FTA-COO are different, the eligibility
for FTA benefits will be scrutinized as per the provisions of the law.
4. The proper officer will give option to the importer for early clearance against
bond and Bank Guarantee if the importer needs more time to submit information
and supporting documents sought by the proper officer under Rule 5 of
CAROTAR, 2020.
5. If verification request under Rule 6 of CAROTAR, 2020 is required to be
sent, then the proper officer shall submit specific questionnaire to DIC
(Directorate of International Customs), after obtaining necessary details from the
importer.
6. This Public Notice should be considered as a Standing Order for the
concerned officers and staff of the Custom House.
7. Any difficulty faced in implementation of this public notice may be brought
to the notice of Assistant Commissioner in charge of TSK at e-mail address : tsk-
[email protected].
8. This is issued with approval of the Chief Commissioner of Customs, Zone-II.
Sd/-
(Ashwini Kumar)
Commissioner of Customs,
NS-III, JNCH, Mumbai-II
Copy to :-
1. The Chief Commissioner of Customs, Mumbai Zone-II, JNCH.
2. The Commissioner of Customs, Nhave Sheva-General, I, II, III, IV & V,
JNCH
3. The Deputy Commissioner of Customs, EDI Section, JNCH for uploading
on website.
4. Office copy."
14. It is thus clear that in supersession of the public notice No.33/2024,
dated 20th March 2024, a new procedure was prescribed for verification of
eligibility for benefit to be availed under the relevant FTA on the scrutiny of
documents in clauses 3(i) to (vi).
15. The Petitioner contends that insofar as the Bills of Entries (BoE) of the
Petitioner are concerned, as per the requirements of law, the Petitioner made
declarations referring to such notification under which preferential rate of duty was
M.S.Thatte
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claimed. Also, the relevant documents namely the seaway bill, commercial invoice
with packing list, inspection certificate, certificate of origin, and end user letter
were uploaded by the Petitioner. The Petitioner contends that, however, the
Turant Suvidha Kendra while defacing the CoO (FTA), raised additional
requirements as per public notice No.33/2024 (supra), which was in fact
superseded by a subsequent public notice dated 24 th June 2024. The additional
requirements included the invoice by the exporter in the originating country to the
supplier of the Petitioner. The Petitioner was unable to obtain such documents in
time, as also the Petitioner required the goods urgently for its business purpose.
In these circumstances, the Petitioner filed letters dated 25 th April 2024, 4th May
2024, 9th May 2024 and 14th May 2024 and submitted that the BoE may be
provisionally assessed as the Petitioner was ready to pay full duty under protest till
the issues are resolved.
16. The Petitioner contends that, however, without an opportunity of being
heard, the Respondent no.1 passed the impugned assessment order dated 12 th June
2024, which does not dispute that the manufacturer of the goods is M/s.Covestro
(Thailand) Co. Limited, Thailand and the supplier was M/s.Covestro (Hong Kong)
Limited. The Petitioner contends that the limited doubt raised in the impugned
order is that in the FTA, the FOB value is mentioned whereas in the invoice, CIF
value is mentioned, as a result of which the FOB value cannot be ascertained from
the invoice, and the breakup of third country invoice was not given as per public
notice no.33/2024 (supra). In the absence of the manufacturer's invoice and
breakup in respect thereto, the FTA benefit was denied to the Petitioner
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19 of 26 4.WP.11540.2024.DOC
purportedly under Section 28DA(4) and Rule 5(5) of the CAROTAR 2020. It
was also held that the Petitioner has obtained the FTA certificate through mis-
representation of actual FOB value.
17. It is on such backdrop, the Petitioner has filed this petition praying for
the reliefs as noted by us hereinabove, contending that the impugned order dated
12th June 2024 is, per se, illegal and has caused serious prejudice to the Petitioner,
as also it is passed without jurisdiction and solely based on a public notice which
does not have any legal repercussions in law.
18. The Petition is opposed by filing a reply affidavit dated 21 st September
2024 of Mr.A.K.Suman, the Assistant Commissioner of Customs, justifying the
actions taken on the basis of public notice No.33/2024, dated 20 th March 2024
and the impugned order. There is a rejoinder affidavit filed on behalf of the
Petitioner dated 24th March 2026, inter alia, contending that the Central Board of
Indirect Taxes & Customs International, Customs Division, Ministry of Finance,
Department of Revenue, Government of India has stepped in and a clarification on
certain aspects of origin procedures under free trade agreements is issued vide
Instruction No.23/2024-Customs dated 21 st October 2024. The clarification as
issued by CBIC is required to be noted, which reads thus:
"Instruction No.23/2024-Customs
F.NO.20000/6/2015-OSD(ICD)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes & Customs International
Customs Division
Room No.277 A, North Block, New Delhi
Dated the 21st October 2024.
To,
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20 of 26 4.WP.11540.2024.DOC
All Principal Chief Commissioners/Chief Commissioners of Customs/Customs
(Preventive)/Customs and Central Tax
All Principal Commissioners/Commissioner of Customs/Customs (Preventive)
All Principal Directors General/Directors General under CBIC.
Madam/Sir,
Subject : Clarification on certain aspects of origin procedures under free trade
agreements (FTAs) - regarding.
The Board is in receipt of various representations, citing difficulties
encountered in import clearance where third-party invoicing, allowed under the
provisions of a trade agreement, has been used.
1.1 It has been represented that certain field formations are questioning the origin
status of products imported under FTAs with third-party invoicing, particularly
under the ASEAN-India FTA (AIFTA) upon comparing the value recorded on the
certificate of origin (COO) and that declared on the third-party invoice. Instances
have also been brought to notice where preferential claims have been denied in
such cases without conducting verification of COO with the issuing authority to
check its authenticity and/or accuracy of information contained therein.
2. In this regard, it is to note that third-party invoicing is a common business
practice and a few trade agreements explicitly provide for it. For example, Article
22 of Operational Certification Procedures for the Rules of Origin for the AIFTA
states that :
"The Customs Authority in the importing Party shall accept an
AIFTA Certificate of Origin where the sales invoice is issued either
by a company located in a third country or an AIFTA exporter for
the account of the said company, provided that the product meets
the requirements of the AIFTA Rules of Origin."
3. It is pertinent to underline here that the purpose of a COO is to serve as a
proof that the goods qualify as originating within the terms of an FTA irrespective
of whether third party invoicing is involved or not. On the other hand, the seller's
invoice, including a third party invoice where applicable, is the document relevant
for customs valuation.
4. Where the proper officer has reason to believe that the subject product does
not meet the prescribed originating criteria, he/she may seek information and
supporting documents in relation to the originating status of the product, as may
be deemed necessary, from the importer consistent with the trade agreement.
When the requisite information is not provided by the importer or the information
furnished is insufficient to assess origin criteria, the laid down process of
verification gets triggered in terms of the Customs (Administration of Rules of
Origin under Trade Agreements) Rules, 2020 (CAROTAR in brief) read with
Section 28DA of the Customs Act, for which a reference is to be made by the
proper officer to the issuing authority through the FTA Cell (under the
Directorate of International Customs).
5. Further, it may be noted that both - the information being sought and the
process of verification must be consistent with the trade agreement. It may also be
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21 of 26 4.WP.11540.2024.DOC
noted that CAROTAR does not obligate the importer to provide commercially
confidential information, pertaining to the exporter/third party. Also, CAROTAR
does not require an issuing authority or a seller to use a specific or same currency
for declaring value in COO and invoice respectively.
6. Rule 5(5) of CAROTAR provides that the proper officer may deny a
preferential duty claim without causing further verification on the basis of the
information and documents furnished by the importer and available on record.
However, it is emphasised that if the concerned trade agreement does not allow for
outright denial without causing a verification in accordance with provisions laid
down in the subject agreement, the provision of the trade agreement shall prevail.
CBIC vide its Instruction No.19/2022-Customs dated 17.08.2022 has reiterated
that in the event of conflict between the provisions of the trade agreement and
CAROTAR read with Section 28DA, the provisions of the trade agreement shall
prevail to the extent of the conflict.
7. In cases where non-compliance of origin criteria is established after following
the due process, an speaking order must be passed following the principles of
natural justice as well as the specific obligations in this regard covered in the
respective FTA. Merely pointing out that the value addition is artificially inflated
by wrongfully adding certain ineligible elements (e.g. freight) may not be sufficient
to reject a claim, unless it is demonstrated that the value addition calculated as per
formula prescribed in the trade agreement does not meet the threshold percentage
point when such elements are removed.
8. It is requested that custom formations under your jurisdiction may be suitably
sensitized on the issues elaborated above.
Yours sincerely,
Sd/-
(Neetisha Verma)
OSD (ICD)"
19. In pursuance of the said clarification, as issued by the CBIC, a fresh
public notice No.10/2025, dated 23rd January 2025 has been issued by the
Commissioner of Customs (NS-III),JNCH, Nhava Sheva, Uran clearly recording
that in pursuance of the Board Instruction No.23/2024-Customs, dated
21.10.2024, Public Notice No.55/2024 dated 24.06.2024 issued by his Custom
House, stands modified to the extent as written in the said instructions. It was also
specified that the public notice shall be considered as a Standing Order for the
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22 of 26 4.WP.11540.2024.DOC
concerned officers and staff of his Custom House. The said public notice
No.10/2025, dated 23rd January 2025 is required to be noted, which reads thus :
"OFFICE OF THE COMMISSIONER OF CUSTOMS (NS-III),
TURANT SUVIDHA KENDRA, FIRST FLOOR,
JAWAHARLAL NEHRU CUSTOM HOUSE, NHAVA SHEVA, URAN,
DIST.RAIGD, MAHARASHTRA-400 707.
23-01-2025
Subject : Clarification on certain aspects of origin procedures under Free Trade
Agreements (FTAs) - reg.
Attention of the trade is drawn towards CBIS Instruction No.23/2024-
Customs dated 21.10.2024, issued vide F.No.20000/6/2015-OSD(ICD) on the
above-mentioned subject, and the same is brought to the notice of all concerned
(copy enclosed).
2. Pursuant to the Board Instruction No.23/2024-Customs dated 21.10.2024,
Public Notice No.55/2024 dated 24.06.2024 issued by this Custom House stands
modified to the extent as written in the said instruction.
3. This Public Notice shall be considered as Standing Order for the concerned
officers and staff of this Custom House.
4. Any difficulty faced in the implementation of this Public Notice may be
brought to the notice of the Assistant Commissioner of Customs (In-charge) of
TSK at Email : [email protected]
5. This issues is with the approval of the Chief Commissioner of Customs,
Mumbai Zone-II.
Encl : As above. Sd/-
(Sanjeev Kumar Singh)
Commissioner of Customs, NS-III, JNCH"
20. Mr.Gandhi, learned counsel for the Petitioner would submit that in fact
in view of the CBIC Instruction No.23/2024-Customs, dated 21 st October 2024,
the directions qua under public notice No.33/2024, dated 20 th March 2024, were
certainly not applicable. In such context, our attention was drawn to the said
public notice, to submit that the preferential duty benefit has been rejected to the
Petitioner simply on a mechanical application of public notice no.33/2024, dated
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23 of 26 4.WP.11540.2024.DOC
20th March 2024. To buttress this contention, our attention is drawn to
observations in the order passed by the Assistant Commissioner in the impugned
order dated 12th June 2024. The relevant text of the order dated 12th June 2024 is
required to be noted which reads thus :
"DISCUSSION & FINDINGS
7. The department has made the assessment on the basis of the following facts :-
a) As per the documents submitted by importer at the time of filing bill of entry
and later during assessment, it is evident that in Column 9, FOB value is
mentioned. In invoices CIF value is mentioned. FOB value of FTA certificate
cannot be ascertained and verified from the invoices submitted by the importer as
the breakup of third country invoice was not given as per JNCH Public Notice
33/2024 dated 20.03.2024. Therefore, manufacturer's invoice and breakup
thereof was sought from the importer.
b) ... ... ...
c) ... ... ...
d) ... ... ...
(e) In view of the above, I find that FTA certificates of origin having reference
number mentioned in the Table-A have been obtained through mis-
representation of actual FOB value of the goods. Therefore, the claim of
preferential rate of duty under Sr.No.484(I) of notification No.046/2011 (ASEAN
-India Free Trade Agreement (AIFTA) on the basis of above said Certificates of
Origin is liable for rejection."
(Emphasis supplied)
21. We find substance in the contentions as urged by the learned counsel
for the Petitioner. Although learned counsel for the Respondents has opposed this
petition by supporting the impugned order, he does not dispute that the CBIC has
issued Notification dated 21st October 2024, which would be binding on the
Respondent no.2 Customs House, and in fact following the same public notice
No.10/2025, dated 23rd January 2025 has been issued by Respondent no.2.
Therefore, the entire basis of the impugned order stands obliterated and/or
extinguished. It is his submission that for this reason a fresh order is now required
to be passed by completely following the mandate of law and more particularly
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24 of 26 4.WP.11540.2024.DOC
having regard to the subsequent developments which have taken place namely in
view of Instruction No.23/2024-Customs, dated 21st October 2024 issued by
CBIC and issuance of fresh public notice No.10/2025, dated 23 rd January 2025
issued by Respondent no.2. We find substance in such contentions as urged by the
learned counsel for the Petitioner. We find that the entire basis on which the
impugned order was passed denying the Petitioner's preferential rate of duty under
Notification No.46/2011, dated 1st June 2011, in respect of the free trade
agreement with Thailand claimed by the Petitioner under the Bills of Entry, is now
required to be reconsidered.
22. We may also observe that when it comes to the traders acting upon
trade agreements entered between India with the other countries, it is necessary
that instructions are issued, strictly in consonance with Section 151A of the Act,
being solely the power of CBIC. We asked the learned counsel for the
Respondents as to what is the source of power/jurisdiction in the Commissioner of
Customs issuing a public notice and to point out a specific provision to that effect,
invoked by the Commissioner to issue public notice No.33/2024, which directly
dealt with issues under the free trade agreements under which the importers were
acting, also the requirements and procedure which was prevalent for a long period,
was sought to be modified by the Commissioner under the Public Notice.
However, we are not informed of any specific provision for issuance of any such
public notice. In any event, public notices cannot be issued in some manner which
would dilute the effect and benefit which would be derived under the free trade
agreements or obliterate the provisions of law or the circulars issued by the CBIC.
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25 of 26 4.WP.11540.2024.DOC
In such matters the approach on the part of the Commissioner is required to be
extremely careful and adopted only upon an appropriate clarification/approval
being granted by the CBIC and not otherwise, for the reason that any vague or
unacceptable clarification not known to law, is likely to cause serious prejudicial
disturbance in what is expected of the traders/importers in their smooth
functioning, and also be counterproductive to the interest of the Revenue.
23. In this view of the matter, we are of the clear opinion that the entire
basis of the impugned order has stood extinguished. The impugned order is
accordingly required to be set aside and the proceedings being restored on remand
to Respondent no.2 Commissioner of Customs, for a fresh order to be passed in
accordance with law. The petition accordingly stands disposed of in terms of the
following order :
ORDER
(i) The impugned order dated 12th June 2024 is quashed and set aside;
(ii) The assessment proceedings of the Bills of Entry in question stand
restored to the file of Respondent no.1-Assistant Commissioner of Customs,
Group II (G), NS-I, JNCS, Nhava Sheva, for fresh assessment to be undertaken
and in regard to the claim of the Petitioner of preferential rate of duty under
Notification No.46/2011 (Customs), dated 1st June 2011, and an appropriate order
in accordance with law to be passed, as expeditiously as possible and in any event
within eight weeks from the date a copy of this order is made available to him;
(iii) All contentions of the parties in that regard are expressly kept open;
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26 of 26 4.WP.11540.2024.DOC
(iv) Writ Petition No.11540/2024 stands disposed of in the aforesaid terms.
No costs.
24. The parties are at ad idem that Writ Petition Nos.12430/2024,
12470/2024, 12432/2024 and 12428/2024 be also disposed of in terms of the
aforesaid order. Although the impugned orders are similar in these petitions, the
dates and the trade agreements are different. We accordingly dispose of Writ
Petition Nos.12430/2024, 12470/2024, 12432/2024 and 12428/2024 in terms of
the above orders. No costs.
(AARTI SATHE, J.) (G. S. KULKARNI, J.)
Signed by: Kiran Kawre
Designation: PA To Honourable Judge
Date: 22/04/2026 20:46:12 M.S.Thatte
