S.SHIVSHANKAR vs THE COMMISSIONER OF CUSTOMS,

2026:MHC:4549
WP No. 28403 of 2026
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on
Pronounced on
06.10.2026
11.11.2026
CORAM
THE HON'BLE MR.JUSTICE N.SENTHILKUMAR
WP No. 28403 of 2026
CNR:{HCMA011383752026}
and
WMP No.31122 of 2026, WMP No.31123 of 2026
S.Shivshankar
Manager and F-card Holder
M/s.Saro International Freight System
No.16, Jeyalakshmi Nagar Main Road
Nerkundram, Chennai-600 107
..Petitioner(s)
Vs
The Commissioner of Customs,
Office of the Principal Commissioner
of Customs (Air Cargo)
New Custom House,Chennai VII Commissionerate
Air Cargo Complex, Meenambakkam
Chennai-600 016
..Respondent(s)
Prayer: Petition filed under Article 226 of the Constitution of India for issuance
of Writ of Certorrari to call for the records of the impugned
Order-in-Original No.1375/2026, F.No.CUS/APR/INV/216/2025-GR(1-4), DIN
20260473M0000111701, dated 18.4.2026 on the file of the respondent and
quash the same in so far as the petitioner is concern.
For Petitioner(s): Mr.A.K.Jayaraj
For Respondent(s): Mr.B.Arvind Srevatsa
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O RDER
This Petition has been filed seeking to call for the records relating to the
impugned Order-in-original No.1375/2026, F.No.CUS/APR/INV/216/2025-
GR(1-4), DIN 20260473M0000111701, dated 18.4.2026, passed by the
respondent and to quash the same insofar as the petitioner is concerned.
2.The petitioner is the Manager of M/s.Saro International Freight System,
which is a partnership concern, holding a Customs House Broker Licence under
the CBLR. The petitioner is conducting his business in accordance with the
regulations prescribed by the customs authorities. The Petitioner has been in
service as customs house broker for the past 30 years.
3.The petitioner while working as a customs broker had filed the Bills of
Entries on behalf of the importer M/s.Precious Metal Refiners (PMR), who have
imported “Gold Dore Bars” from republic of Guinea, [Least Developed Country
(LDC)] which has purity of less than 95% and categorically falls under CTH
7108 1200 of the First Schedule to the Customs Tariff Act 1975. According to
the petitioner, the importer has availed the benefit of Duty Free Tariff
Preference (DFTP) scheme extended by India for Least Developed Countries
notified vide Customs Notification No.96/2008-Cus., dated 13.08.2008.
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4.According to the petitioner, the “Gold Dore Bars” falling under ITC
(HS) 7108 12 00 are partially refined gold bars, which are used in the
manufacture of standard refined gold bars having a purity of 99.5% and above.
5.According to the petitioner, being a licensed Customs Broker, he acted
on the basis of the information, documents and declarations furnished by the
importer. The petitioner as a Customs Broker had facilitated the import,
including the filing of Bills of Entry and the subsequent clearance of the
imported goods. According to the petitioner, based on the Notification
No.096/2008-Cus, dated 13.08.2008, the benefit of a nil rate of Basic Customs
Duty (BCD) and Agriculture Infrastructure and Development Cess (AIDC) was
claimed. The petitioner who had acted as an agent of the importer had also
claimed clearance of the goods under CTH 7108 1200.
6.Pursuant to the searches conducted at the importer’s premises,
statements were recorded from the importer as well as from the petitioner. The
allegation levelled against the petitioner/importer is that he had wrongly availed
the concessional rate of duty under the Notification dated 13.08.2008 by relying
on third party suppliers based in Dubai to procure Certificate of Origin (COOs)
and other required documents for the import of Gold Dore Bars from Guinea.
The petitioner was issued with a show cause notice seeking an explanation as to
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why a penalty should not be imposed under Section 114AA of the Customs Act,
to which he submitted a reply dated 18.03.2026, explaining that all the
documents received from the importer had been submitted to the department at
the time of import and the said documents were uploaded to the e-sanchit
facility of the ICEGATE Customs Portal. The petitioner had no reason to doubt
the veracity of the said Miner Assay Certificates.
7.According to the petitioner the Mining Assay certificate issued by
M/s.Siramamba Mining SARLs Company was uploaded along with all the Bills
of Entries in the Customs Portal and was also referred to in the Common
Description of the Bills of Entry as “Mining P/L” and “Assay Certificate
uploaded”.
8.According to the petitioner, samples were drawn and sent for testing on
01.09.2023. It is a specific case of the petitioner that he had obtained
authorisation from the importer and exercised due diligence to ascertain the
correctness of the information, verified the antecedent and correctness of the
exporter code and furnished all the information to the department without
withholding any particulars.
9.According to the petitioner, he had not furnished any false information
warranting the imposition of a penalty under Section 114AA of the Customs
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Act. It is the case of the petitioner that the respondent did not take into
consideration the reply given by him to the showcause notice issued by the
department and passed the impugned Order-in-Original dated 18.04.2026.
10.The learned counsel for the petitioner submitted that the impugned
order is not an appealable order, in support of his contention, relied upon the
judgment of the Calcutta High Court in Shri Bikash Bose Vs. Union of India &
Anr. [WPO.662 of 2025] wherein in an identical situation the Calcutta High
Court has held that the order-in-Original can be challenged by way of a writ
petition under certain circumstances viz.,
(a) breach of principles of natural justice;
(b) infringement of fundamental right;
(c) challenge thrown to the vires of any Act or provision;
(d) an action wholly without jurisdiction;
(e) where the statutory authority has not acted in accordance with
the provisions of the enactment which regulates it.
11.The learned counsel further submitted that the petitioner is at liberty to
approach this Court if he is able to demonstrate a violation of any one of the
five conditions.
12.According to the petitioner, he was denied a fair opportunity to
participate in the proceedings and no opportunity was given to him thereby
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infringing his fundamental rights. Apart from that the action which was taken
by the authority is without jurisdiction as the impugned order did not reflect
consideration of the reply given by the petitioner.
13.The learned counsel for the petitioner in support of his claim, relied
upon the following the judgments and regulations:
1. Commissioner of Cus (Imports0, Chennai Vs. Sainul Abideen Neelam, 2014
(300) ELT 342 (MAD) [Division Bench of this Court]
2. Kunal Travesl (Cargo) Vs. CC (I & G), IGI Airport, New Delhi, 2017 (354)
ELT 447 (DEL) [Division Bench of Delhi High Court]
3. Commissioner of Customs (Import) Vs. Trinetra Impex Pvt. Ltd., 2020 (372)
ELT 332 (DEL) [Division Bench of Delhi High Court]
4. CMA (MD) No.944 of 2016 dated 20.02.2024, wherein division Bench of this
Court held as follows:
“29. The facts, such as the alleged payment of Rs.60,000/- through ICICI
Bank as remuneration for the illegal export and the alleged transit of
Cargo from Chennai to Tirunelveli by the appellant, were never verified,
though they are verifiable. The admission that the appellant is a licensed
dealer in red sander and he know the exporter John Alexander as Alex of
Tutucorin is neither a fact to corroborate the incriminating statement of
co-noticee, indicting the appellant. The principle of preponderance of
probability been wrongly invoked by CESTAT without any fact either
circumstantial or by way of corroboration relate the appellant to the
Cargo seized by D.R.I. Not even a remote material available to believe
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the statement of a tainted person.”
5. CBLR Regulations 2018
14.Per contra, the learned counsel appearing on behalf of the respondent
submitted that the impugned order passed by the respondent does not suffer
from any illegality or irregularity. The impugned order is a detailed order. An
opportunity was given to the petitioner by way of show cause notice No.394 of
2025 dated 27.05.2025, to which the petitioner submitted a detailed reply.
15.The impugned order in paragraph 35, discussed the authenticity of the
Certificates of Origin, the challenge to the CFSL report and the detailed
objections raised by the noticeee to the department’s reliance on the CFSL
forensic report dated 03.06.2024, which found that certain signatures and
stamps on the COOs, had been reproduced. He further pointed out that under
Rule 6 of CAROTAR and Rule 20 of the rules of Origin, the impugned order
has categorically stated that the mandatory procedure was bypassed by the
petitioner herein. F urther the impugned order stated that the statement of the
petitioner was recorded on 27.09.2023, in which the petitioner had confirmed
that the original documents including COOs were received from the airline
along with the goods. The impugned order was passed after discussing all the
contention raised by the petitioner and by the department, the show cause notice
and the reply given by the petitioner and the evidence that has been gathered
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during the investigation conducted by the DRI.
16.The learned counsel referred to the issue that was considered by the
department which reflects in paragraph 52.3 of the impugned order wherein it
has been held that the investigation had established that PMR had submitted
COOs before Customs authorities bearing reproduced signatures and stamps as
found by the CFSL, that all origin related documents had been obtained entirely
through a Dubai based intermediary without any independent verification, that
PMR's own directors admitted that they did not know whether the gold had
actually been mined in Guinea, that no direct communication of any kind was
established with the Guinea based supplier or miner, and that PMR had
admitted that it had not carried out due diligence under Section 28DA of the
Customs Act.
17.Apart from that, issue No.iv viz., “Whether the importer exercised
reasonable care under Section 28DA of the Customs Act, 1962” was discussed
in paragraph 53 of the impugned order.
18.Based on the violations committed by the petitioner, as stated supra,
the authority held that the claim for the FTA exemption benefit, based on the
submission of non-genuine/non-authentic origin documentation, was not
sustainable. A sum of Rs. 25,64,48,030/- (Rupees Twenty Five Crores Sixty
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Four Lakhs Forty Eight Thousand and Thirty only), along with applicable
interest, was demanded from M/s. Precious Metal Refiners Pvt. Ltd. The
department had valued the goods at Rs. 173,51,01,693/- (Rupees One Hundred
Seventy Three Crores Fifty One Lakhs One Thousand Six Hundred and Ninety
Three only), which were held liable for confiscation under Sections 111(m) and
111(q) of the Customs Act, 1962.
19.Further, paragraph 52 of the impugned order discussed the role of the
petitioner and the relevant portion is extracted hereunder:
“52. Issue (ii): Whether the demand of differential duty of
Rs.25,64,48,030/- is to be confirmed or dropped.
Having held on that PMR is not eligible for the duty exemption
under Notification No. 096/2008-Cus dated 13.08.2008, the
consequential question is whether the differential duty demand of
Rs. 25,64,48,030/- as quantified in Annexure-A to the SCN is to be
confirmed, and whether the extended period of limitation under
Section 28(4) of the Customs Act, 1962 has been correctly invoked.
52.1 I first address the quantification of the demand. The
differential duty of Rs. 25,64,48,030/- represents the Basic
Customs Duty and AIDC that would have been payable on the five
Bills of Entry had the exemption under Notification No. 96/2008-
Cus not been claimed. The noticees have not specifically disputed
the arithmetical computation of the differential duty in Annexure-A.
I have examined the computation and find it to be in order. The
total assessable value of the five consignments as declared before
Customs is Rs. 1,73,51,01,693/-, and the differential duty computed
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thereon at the applicable rate is Rs. 25,64,48,030/-.
52.2 I now address the invocation of the extended period of
limitation under Section 28(4) of the Customs Act, 1962. The
noticees have relied on the Supreme Court decision in Northern
Plastic Ltd. v. Collector of Customs (1998 (101) ELT 549 (SC))
and related decisions to contend that a bona fide incorrect claim of
exemption, based on genuine belief and without any misdeclaration
of goods, does not attract the extended period or penal provisions.
I have carefully considered these submissions. I find that the ratio
of these decisions is not directly applicable on the facts of this
case. Those decisions dealt with situations where the description
classification, and value of goods were correctly declared and the
only issue was a incorrect exemption claim. The present case is
materially different.
52.3 Here, the investigation has established that PMR submitted
COOs before Customs that bore reproduced signatures and stamps
as found by the CFSL; that all origin-related documents were
obtained entirely through a Dubai-based intermediary without any
independent verification; that PMR’s own directors admitted they
did not know whether the gold was actually mined in Guinea; that
no direct communication of any kind was established with the
Guinea-based supplier or miner; and that PMR admitted that due
diligence under Section 28DA was not carried out by it. These
circumstances go beyond a mere incorrect belief about notification
eligibility. They reveal that origin-related declarations were made
before Customs without any factual basis to support them, in
reliance on a supply chain that has failed to substantiate the origin
claim at every level of inquiry.
52.4 The admission by Shri Prashant Tibrewala in his statement
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dated 26/27.09.2023 that PMR did not carry out the due diligence
required under Section 28DA of the Customs Act, 1962, is a
significant concession. Section 28DA is a non-delegable statutory
obligation cast directly on the importer. It cannot be outsourced to
a third-party intermediary. By claiming the exemption while
knowing that it had not independently verified the origin condition,
PMR furnished information before Customs without reasonable
care for its truthfulness, which constitutes suppression of material
facts within the meaning of Section 28(4). As held in Eastern Silk
Indus. Ltd. v. Commissioner of Customs (Airport/Admn.), Kolkata,
“Fraud in common parlance means dishonest dealing, deceit or
cheating. It makes no difference whether fraud is committed by
outright forging of documents or by wilful
mis-declaration/misrepresentation. Fraud is fraud.” I find that the
importer has wilfully suppressed material facts and accordingly
the extended period of limitation of five years under Section 28(4)
of the Customs Act, 1962 is rightly invoked.
52.5 I accordingly confirm the demand of differential Customs duty
of Rs. 25,64,48,030/- (Rupees Twenty-Five Crores Sixty-Four
Lakhs Forty-Eight Thousand and Thirty only) against M/s Precious
Metal Refiners Pvt. Ltd. under Section 28(4) of the Customs Act,
1962, along with applicable interest thereon under Section 28AA of
the Customs Act, 1962. The sum of Rs.10,98,00,000/- deposited by
PMR pursuant to the order of the Hon’ble Madras High Court is
appropriated and adjusted against this confirmed demand. ”
20.Heard both the parties at length and perused the impugned order and
the judgment relied upon by the parties.
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20.It is not in dispute that the petitioner, who is an agent, was performing
his duties in accordance with law. The judgments relied upon by the petitioner
include Commissioner of Customs (Exports) v. I. Sahaya Edin Prabhu , reported
in 2015 SCC OnLine Mad 847 , wherein the Division Bench of this Court held
that a Customs House Agent could not be penalised under the provisions of the
Customs Act for failure to discharge functions as a Custom House Agent, as
penalties for such violations are provided for under the Customs House Agents
Licensing Regulations.
21.This view was taken by the CESTAT, New Delhi in M/s. AV Global
Corporation (P) Limited v. Commissioner of Customs (Preventive) . It was
contended therein that action under Section 114AA could be taken only against
fraudulent exporters and that such action should not be taken against a Customs
House Agent merely for acting in that capacity. The same view was also taken
by the CESTAT, South Zonal Bench, Bangalore in Access World Wide Cargo v.
Commissioner of Customs, Bangalore , reported in 2022 (379) ELT 120 (Tri.
Bang.), wherein it was held as follows:
“ 6. After considering the submissions of both the parties and
perusal of the material on record, I find that the appellant who is
the Customs Broker has only filed the shipping bills pertaining to
the exports made by the ADPL Customs Intelligence Unit
conducted the investigation and prima facie found that the mobile
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phones exported were not manufactured in India and have been
manufactured in China and the exporter ADPL was not entitled to
drawback under Section 75 of the Act. A SCN was issued
demanding drawback of Rs.1,20,02,815/- along with interest but
after following the due process, the Additional Commissioner only
confirmed the demand of drawback to the tune of Rs.50,48,749/-
as per Rule 16 of Customs, Central Excise & Service Tax
Drawback Rules, 1995. Further, the rejection of this amount is
under challenge before the Revisionary Authority. This, itself,
shows that the exporter ADPL is contesting the denial of
drawback which is subjudice. Further, I find that in the present
case, penalty has only been imposed on the CHA under Section
114AA of the Act and no penalty has Customs Appeal No. 20444
of 2021 been imposed on the exporter. Further, I find that the
ingredients of Section 114AA of the Act is not applicable to the
CHA and is meant against the fraudulent exporter as is made out
from 27th Report of the Standing Committee on Finance (cited
Supra). I also find that in the present case, the Department has
failed to prove that there was a mala fide and wilful mis-
representation by the Customs Broker. It seems that the
Commissioner (Appeals) has totally misunderstood the facts and
has wrongly observed that the appellant (Customs Broker) and
the exporter have been operating from the same premises and
have an identical ICE Code which leads one to suspect the bona
fides of the appellant. This finding of the Commissioner is
factually incorrect and without any basis. Further, the
Commissioner on the basis of these facts has wrongly come to the
conclusion that the appellant is involved in the illegal export
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whereas the appellant is only a Customs Broker who has filed the
shipping bills on the basis of the documents furnished by the
exporter.
7. Therefore, in view of these facts, the imposition of penalty itself
is not sustainable in law and therefore I set aside the imposition
of penalty on the appellant by allowing the appeal of the
appellant. ”
22.In the present case, the petitioner acting as an agent and the PMR’s
Directors had admitted before the respondent that the genuineness of the
certificates had not been verified. In such circumstances, petitioner cannot
argue hot and cold to establish that he has been protected as an agent who has
only furnished the documents provided by the importer and discharged his
responsibilities in facilitating the clearance of the goods.
23.When the respondent had established its case based on the statement
given by the petitioner which was subsequently retracted, regarding the
admission that the genuineness of the certificates had not been verified and the
benefit of the exemption had been availed on that basis, the petitioner and the
importer, M/s.Precious Metal Refiners had given statements before the
department indicating that the mandatory procedure contemplated under Rule 6
of CAROTAR and Rule 20 of the Rules of Origin had not been followed.
Based on the statements given by the petitioner before the DRI, the petitioner
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has not established any ground to interfere with the impugned order in this writ
petition.
24.In view of the same, the present writ petition is dismissed as devoid of
merits, however liberty is granted to the petitioner to challenge the impugned
order by way of an appeal. No costs. Consequently connected Miscellaneous
Petitions are closed.
25.After pronouncement of the order, t he learned counsel for the
petitioner submitted that, in view of the dismissal of the writ petition, the
petitioner has been granted liberty to file an appeal, however, the dismissal
should not take away the petitioner's right to have the appeal heard on the
question of limitation.
26.In view of the above submission made by the learned counsel for the
petitioner, the period of limitation shall be computed by taking into account the
time spent in pursuing the writ petition.
11.11.2026
Index: Yes
Speaking order
Neutral Citation: Yes
sai
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WP No. 28403 of 2026
N.SENTHILKUMAR J.
sai
To
The Commissioner of Customs,
Office of the Principal Commissioner
of Customs (Air Cargo)
New Custom House,
Chennai VII Commissionerate
Air Cargo Complex, Meenambakkam
Chennai-600 016
Pre-delviery order made in
WP No. 28403 of 2026
and
WMP Nos.31122 of 2026 & 31123 of 2026
Dated: 11.11.2026
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