Customs Broker Loses Challenge Over Unverified Guinea Gold-Origin Certificates, While Madras HC Directs Appeal Limitation To Account For Time Spent In Writ

In brief

The question

1. Whether the High Court should intervene under Article 226 to quash the Order-in-Original on the asserted grounds of denial of a fair opportunity or lack of jurisdiction

The court held

The Court dismissed the writ petition as devoid of merit, while granting the petitioner liberty to challenge the impugned order by appeal

It also directed

It further directed that the limitation period for such appeal be computed by taking into account the time spent pursuing the writ petition.

No costs were ordered, and the connected miscellaneous petitions were closed

01Facts

The petitioner, a Customs Broker and manager of M/s. Saro International Freight System, filed Bills of Entry for M/s. Precious Metal Refiners (PMR), claiming a duty-free tariff preference for gold dore bars imported from Guinea.

pp. 2–4

Following an investigation, Customs alleged that the Certificates of Origin (COOs) supporting the claim were not authentic and that the required origin-verification procedures had not been followed.

pp. 2–4

A show-cause notice proposed a penalty against the petitioner under Section 114AA of the Customs Act, 1962; the petitioner replied that he had relied on documents supplied by the importer and had uploaded them to the Customs portal

pp. 2–4

The adjudicating authority’s order confirmed a differential-duty demand against PMR and addressed the petitioner’s role in the transaction

pp. 8–11, 14

The petitioner sought certiorari, alleging, among other things, that his reply had not been considered and that the authority had acted without jurisdiction

pp. 4–6

02Issues

i.1. Whether the High Court should intervene under Article 226 to quash the Order-in-Original on the asserted grounds of denial of a fair opportunity or lack of jurisdiction

pp. 4–6

ii.2. Whether the petitioner could avoid liability on the basis that, as a Customs Broker, he had merely submitted documents supplied by the importer, despite the findings concerning the authenticity of the origin documents and compliance with the applicable procedures

pp. 12–14

03Law Applied

Article 226 permits judicial review of an administrative order in recognised exceptional circumstances, including breach of natural justice, lack of jurisdiction, or failure to act in accordance with the governing enactment; the judgment referred to *Shri Bikash Bose v. Union of India* in outlining these grounds

p. 5

Section 114AA of the Customs Act was the provision under which a penalty had been proposed against the petitioner

p. 4

The adjudicating order’s findings concerning origin verification relied on Rule 6 of CAROTAR and Rule 20 of the Rules of Origin

p. 7, 14

The Court also considered authorities concerning the limits on penalising a Customs Broker merely for acting in that capacity, including *Commissioner of Customs (Exports) v. I. Sahaya Edin Prabhu* and *Access World Wide Cargo v. Commissioner of Customs, Bangalore*

pp. 12–14

Provisions in the judgment · 3 · Linked ones open on LawLens

Customs Act,1962 Section 28 Section 75 Section 111

04Reasoning

The Court noted that the petitioner had received a show-cause notice and submitted a reply, and that the respondent’s order discussed the evidence and the parties’ contentions, including the findings on the COOs and origin-related procedures

pp. 7–11

Although the petitioner relied on decisions limiting penalties against Customs Brokers, the Court considered those authorities inapplicable to the circumstances presented.

pp. 12–14

It emphasised that the petitioner and PMR’s directors had stated that the genuineness of the certificates had not been verified, and that the required procedures under Rule 6 of CAROTAR and Rule 20 of the Rules of Origin had not been followed.

p. 14

In those circumstances, the petitioner could not establish that he was merely an agent who had discharged his responsibilities by submitting documents supplied by the importer

pp. 12–14

The Court therefore found no ground to interfere with the impugned order in the writ proceeding

p. 14