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M.M. Ceramics & Ferro Alloys vs. Union of India & Ors.

Writ Petition (Civil) · 2026:DHC:7374-DBDecided 2 Sept 2026New Delhi Bench
W.P.(C) 10535/2019CNR: DLHC010394992019
Justice Anil Kshetarpal · Justice Shail Jain

Background

M.M. Ceramics & Ferro Alloys imported "High Grade Tin Ingots" from a Malaysian company (MSC) and claimed a 0% concessional customs duty rate under the ASEAN-India Free Trade Agreement, relying on Certificates of Origin from Malaysian authorities. A Directorate of Revenue Intelligence investigation revealed that the Malaysian company was merely doing job-work smelting on tin ore supplied free of cost by traders (much of it from non-ASEAN countries), meaning the actual "regional value" added in Malaysia was far below the 35% minimum required to qualify as originating goods, despite certificates claiming over 70% regional value content. Show-cause notices were issued and the customs authorities confirmed differential duty, interest, and penalties, and ordered confiscation of goods.

Decision Breakdown

The Court, relying on materially identical prior decisions of the Gujarat High Court (Trafigura India) and Bombay High Court (Purple Products, involving the same Malaysian supplier and certificates), rejected the importer's arguments that (i) the dispute-resolution mechanism under the trade treaty had to be invoked before Customs could act, and (ii) Customs Authorities lacked power to investigate such certificate-of-origin disputes before a 2020 legislative amendment. The Court held that an international treaty provision not incorporated into Indian domestic law cannot oust the jurisdiction of Customs Authorities acting under the Customs Act, and that the pre-existing Section 28 (read with the declaration requirement under Section 46) already gave Customs Authorities sufficient power to recover duty where the importer suppressed facts, regardless of any later amendment. Since the importer had not shown any factual difference from the earlier decided cases, the petition was dismissed, leaving the importer free to pursue the ordinary appeal remedy on the merits of quantum/confiscation/penalty.

Lesson Learnt

Businesses claiming preferential trade tariffs must ensure the exporting country's certificate of origin genuinely reflects the value actually added there: merely paying an overseas smelter/processor a job-work fee, while the real raw material comes from a third country, is not enough to qualify goods as "originating" in the trade-partner country, and Indian Customs Authorities have full power to investigate and recover duty in such cases.

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