ALS

π€πšππ«π’π€πšπš π‹πžπ πšπ₯ π’πžπ«π―π’πœπžπ¬ (𝐀𝐋𝐒)

Tag: #LegalUpdates

  • Calcutta High Court: Bona Fide Purchaser of Transferable DFIA Licence Cannot Be Saddled With Customs Duty for Exporter’s Fraud

    Calcutta High Court: Bona Fide Purchaser of Transferable DFIA Licence Cannot Be Saddled With Customs Duty for Exporter’s Fraud

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 22.09.2026

    Calcutta High Court: Bona Fide Purchaser of Transferable DFIA Licence Cannot Be Saddled With Customs Duty for Exporter’s Fraud

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    In a significant ruling concerning Duty Free Import Authorisation (DFIA) licences and the liability of bona fide transferees, the Calcutta High Court has held that a purchaser who acquires a transferable duty-free import licence for value and without notice of any fraud or irregularity committed by the original licence holder cannot be made liable for customs duty, interest and redemption fine when the licence has never been cancelled by the competent authority.

    A Division Bench comprising Justice Rajarshi Bharadwaj and Justice Sudip Deb allowed the appeal filed by Comet Overseas Pvt. Ltd. and quashed a customs duty demand of β‚Ή22,87,654.95, the consequential interest and a β‚Ή15 lakh redemption fine that had earlier been sustained by CESTAT.

    Comet Overseas Purchased Transferable DFIA Licence for β‚Ή14.51 Lakh

    • Comet Overseas Pvt. Ltd., engaged in export-import bulk commodity trading, was a subsequent purchaser and transferee of DFIA Licence No. 0210100847 dated 16 May 2007.
    • The licence was one among 23 DFIA licences obtained by Gemini Overseas Ltd. from DGFT during 2007-08 and 2008-09 under Notification No. 40/2006-Cus dated 1 May 2006, permitting duty-free import of specified silk products.
    • Three of those licences were subsequently endorsed as transferable by the Regional Authority after certification of fulfilment of export obligation. Comet Overseas purchased the licence in question for β‚Ή14,51,795 through proper banking channels, through Customs House Agent M/s S.K. Saha & Co.
    • Acting upon the licence, Comet imported Mulberry Raw Silk Yarn duty-free under Bill of Entry No. 437910 dated 22 October 2008 at Kolkata Port. The assessable value was approximately β‚Ή74.03 lakh, while the customs duty foregone amounted to β‚Ή22,87,654.95.

    DRI Investigation Found Fraud by Original Licence Holder

    • The controversy arose after intelligence gathered by the Directorate of Revenue Intelligence (DRI) indicated irregularities in the manner in which Gemini Overseas had discharged its export obligation.
    • According to the judgment, Gemini Overseas had exported fabric made of Noil Yarn while declaring it as Natural Silk Fabric predominantly made of Mulberry Raw Silk.
    • Consignments were intercepted at N.S. Dock, Kolkata and at the factory of Eastern Silk Industries Ltd. in Falta SEZ in November 2008. Testing by the Central Silk Board indicated that the fabric consisted of Noil Yarn mixed with cotton.
    • Gemini Overseas subsequently admitted by letter dated 2 January 2009 that the description contained in its export documents was incorrect and that benefits not otherwise due could have been availed. It also expressed willingness to pay the duty foregone in relation to the three transferable licences.

    Customs Issued Show Cause Notice to Comet Overseas

    • A Show Cause Notice dated 11 May 2012 was issued jointly to Comet Overseas, Gemini Overseas and other persons.
    • Customs proposed recovery of β‚Ή22,87,654.95 under the erstwhile proviso to Section 28(1), read with Section 28(4) of the Customs Act, 1962, along with interest. Confiscation was proposed under Section 111(o) and penalty under Section 112.
    • Importantly, the High Court noted that the SCN, insofar as Comet Overseas was concerned, did not contain any allegation of collusion, wilful misstatement or suppression of facts on its part.
    • The Order-in-Original dated 28 February 2014 nevertheless confirmed the duty demand, imposed a β‚Ή15 lakh redemption fine under Section 125, and imposed a penalty of β‚Ή10 lakh under Section 112.

    CESTAT Removed Penalty but Sustained Duty and Redemption Fine

    • On appeal, CESTAT partly granted relief to Comet Overseas.
    • The Tribunal set aside the β‚Ή10 lakh penalty after finding that Comet had no knowledge of the nature of the goods used and exported by Gemini Overseas/Eastern Silk Industries. However, CESTAT sustained the customs duty demand, interest and β‚Ή15 lakh redemption fine.
    • Comet Overseas therefore approached the Calcutta High Court.

    Core Question: Can an Innocent Transferee Be Liable for Original Exporter’s Fraud?

    The High Court had admitted the appeal on the following substantial question of law:

    β€œWhether a bona fide purchaser of duty-free import licence for value can be required to pay duty, interest and redemption fine in respect of his import, when he has no notice of any irregularity on the part of the exporter who had obtained such licence and the licence is not cancelled by the authorities?”

    This placed the legal status of a bona fide transferee for value without notice at the centre of the dispute.

    Comet Overseas: Fraud Makes Licence Voidable, Not Automatically Void

    • The appellant argued that the DFIA licence had been genuinely issued by DGFT and the alleged fraud occurred later, at the stage of certification of fulfilment of export obligation by Gemini Overseas.
    • Relying on the Supreme Court judgments in East India Commercial Co. Ltd., Calcutta v. Collector of Customs, Calcutta and Collector of Customs, Bombay v. Sneha Sales Corporation, Comet argued that even a licence obtained through fraud is voidable rather than automatically void, and continues to operate until cancelled in accordance with law.
    • The appellant also relied upon Taparia Overseas (P) Ltd. v. Union of India to contend that a transferee who purchases a duty-free licence for valuable consideration through legitimate banking channels and without notice of the original holder’s fraud should not be saddled with duty, interest and redemption fine.

    Revenue: Fraud Went to Foundation of DFIA Benefit

    • Customs argued that Gemini Overseas’ fraud went to the foundation of the licence because the exporter had falsely declared the nature of goods exported for fulfilling its export obligation.
    • Revenue relied upon ICI India Ltd. v. Commissioner of Customs (Port), Calcutta and Munjal Showa Ltd. v. Commissioner of Customs & Central Excise (Delhi-IV) to contend that an instrument tainted by fraud could not confer exemption upon a subsequent holder merely because that holder was personally innocent.
    • Revenue also relied upon Tata Iron and Steel Co. Ltd. v. Commissioner of Customs, Mumbai on the extended period of limitation and Commissioner of Customs, Hyderabad v. Pennar Industries Ltd. on compliance with conditions of exemption notifications.

    Genuine Licence Different From Forged or Non-Existent Scrip: High Court

    • A crucial distinction drawn by the High Court was between a genuinely issued licence subsequently affected by fraud and an instrument that was forged and never issued by the competent authority at all.
    • The Court observed that ICI India and Munjal Showa involved forged instrumentsβ€”DEPB scrips and Transfer Release Advicesβ€”which were never validly issued by the competent authority.
    • Comet Overseas’ case was materially different. The DFIA licence had been genuinely issued by DGFT and validly endorsed as transferable by the Regional Authority. The alleged fraud occurred in relation to the certification of export obligation by the original licence holder.
    • The High Court therefore declined to mechanically apply the proposition that β€œfraud vitiates everything” to an innocent subsequent purchaser.

    Fraudulent Licence Remains Effective Until Cancelled

    • The Court relied significantly upon the principles laid down in East India Commercial and Sneha Sales Corporation.
    • It held that a licence affected by fraud or misrepresentation is not automatically rendered non-est. Rather, such a licence remains effective in law until it is avoided or cancelled in the manner prescribed by law.
    • A decisive fact in Comet Overseas’ favour was that DFIA Licence No. 0210100847 had never been cancelled by DGFT or the Regional Authority.
    • The Court regarded this as a material and unrebutted circumstance demonstrating that the licence remained a valid and subsisting instrument when Comet made its import.

    Bona Fide Purchaser for Value Stands on Different Footing

    • The High Court also gave substantial weight to Comet Overseas’ status as a bona fide purchaser for value without notice.
    • The company had paid β‚Ή14,51,795 for the licence through banking channels. More importantly, CESTAT itself had already found that Comet had no knowledge of the irregularities committed by Gemini Overseas or Eastern Silk Industries. Revenue had not challenged that finding.
    • Applying Taparia Overseas, the High Court held that an innocent transferee stands on a different footing from the person who committed or participated in the fraud.
    • The Court observed that the maxim β€œfraud vitiates everything” does not, without more, extend to defeat the rights of such a transferee.

    Pennar Industries Distinguished

    • The High Court also rejected Revenue’s reliance upon Commissioner of Customs, Hyderabad v. Pennar Industries Ltd., (2015) 10 SCC 581 / 2015 (322) E.L.T. 402 (S.C.).
    • It explained that Pennar Industries concerned the original importer’s own failure to fulfil the conditions of an exemption notification.
    • It did not deal with the distinct question of whether liability arising from the default of a third party could subsequently be imposed upon an innocent transferee who purchased the licence for value without knowledge of that default.

    Tata Iron & Steel Decision Did Not Alter the Result

    • The Court similarly declined to treat Tata Iron and Steel Co. Ltd. v. Commissioner of Customs, Mumbai, 2015 (319) E.L.T. 546 (S.C.) as controlling.
    • It observed that the reported decision was a brief order and did not clearly disclose whether the transferee in that case occupied the same position as Comet Overseasβ€”namely, a bona fide purchaser for value without notice.
    • The Court therefore regarded its precedential weight on the facts before it as limited and preferred the reasoning in East India Commercial, Sneha Sales Corporation and Taparia Overseas.

    Limitation Argument Not Independently Decided

    • Comet Overseas had also argued that the extended limitation period under Section 28 could not have been invoked because the SCN contained no allegation of collusion, wilful misstatement or suppression against it.
    • The High Court, however, noted that no substantial question of law concerning limitation had been framed when the appeal was admitted. It therefore declined to decide limitation as an independent ground at the final hearing.
    • Nevertheless, the Court expressly recorded that the SCN contained no allegation of collusion, wilful misstatement or suppression against Comet Overseas and treated that fact as relevant to its overall assessment, without independently adjudicating the limitation issue.

    Calcutta High Court Rules in Favour of Comet Overseas

    • The High Court ultimately held that because the DFIA licence had never been cancelled, and because the fraud attributable to Gemini Overseas arose at the export-obligation certification stage rather than at the original issuance of the licence, the licence had to be treated as voidable rather than void on the record before it.
    • Since Comet Overseas was an unimpeached bona fide purchaser for value without notice, the Court held that it could not be fastened with customs duty, interest and redemption fine arising from a third party’s fraud of which it had no knowledge.
    • The substantial question of law was accordingly answered in favour of Comet Overseas and against the Revenue.

    β‚Ή22.87 Lakh Duty Demand and β‚Ή15 Lakh Redemption Fine Quashed

    The High Court allowed Comet Overseas’ appeal and set aside CESTAT’s order dated 22 December 2015 to the extent that it had sustained:

    • Customs duty: β‚Ή22,87,654.95
      Interest: Consequential interest on the duty demand
      Redemption fine: β‚Ή15,00,000
    • All three were quashed.
    • CESTAT’s earlier decision setting aside the β‚Ή10 lakh penalty under Section 112 of the Customs Act remained undisturbed because Revenue had not challenged that part of the Tribunal’s order.

    Key Takeaway

    The ruling provides important protection to bona fide purchasers of transferable DFIA licences. On the facts before it, the Calcutta High Court drew a clear distinction between a forged/non-existent instrument and a licence genuinely issued by DGFT and validly endorsed as transferable but subsequently affected by fraud attributable to the original exporter. Where the transferee purchased such a licence for value without notice of the irregularity, and the competent authority never cancelled the licence, the Court held that the transferee could not be saddled with the duty, interest and redemption fine arising from the original licence holder’s fraud.

    Listen to this on our #YouTube Channel

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Calcutta High Court

    Disclaimer

    Handy Download:

    “Handy Order for Download”Download

    Write to us at office@aadrikaalaw.com

    Tel: +91-11-4999 2707

    www.aadrikaalaw.com

    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Punjab & Haryana HC: Mere Presence with Co-Accused Does Not Establish Conscious Possession of Commercial Quantity of Opium

    Punjab & Haryana HC: Mere Presence with Co-Accused Does Not Establish Conscious Possession of Commercial Quantity of Opium

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 21.09.2026

    Punjab & Haryana HC: Mere Presence with Co-Accused Does Not Establish Conscious Possession of Commercial Quantity of Opium

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Punjab and Haryana High Court has granted regular bail to a man in an NDPS case involving the alleged recovery of 2.702 kg of opium, observing that the contraband was recovered from a bag carried by the co-accused and no contraband was alleged to have been recovered from the conscious possession of the petitioner.

    Justice Virinder Aggarwal observed that mere presence alongside the person from whom the contraband was recovered, in the absence of any specific recovery from the petitioner, is a matter requiring appreciation of evidence during trial.

    The ruling came in Anil Kumar v. State of Haryana, CRM-M-52368-2026, decided on September 18, 2026. The petition was filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), corresponding to Section 439 CrPC, seeking regular bail.

    Case Arose From Alleged Recovery of 2.702 Kg Opium

    • According to the prosecution, on March 20, 2026, officials of the Anti-Narcotics Cell, Karnal were conducting patrol and checking near NH-44 beneath Baldi Bypass Flyover, Karnal.
    • A secret informer allegedly told the police that Anil Kumar and Roshan Kumar, residents of District Chatra, Jharkhand, were involved in bringing opium from Jharkhand and supplying it in Haryana. The informer further claimed that the two had brought a large quantity of opium and were present near Karn Lake.
    • The information was reduced into writing and a report under Section 42 of the NDPS Act, 1985 was sent to the police station.

    Police Claimed Compliance With Section 50 NDPS Act

    • The prosecution stated that attempts were made to associate independent witnesses with the proceedings. Two persons allegedly declined, while another individual agreed to join as an independent witness.
    • When the police reached near Karn Lake, they allegedly saw two persons standing on the roadside with a black bag. The secret informer identified them as Anil Kumar and Roshan Kumar.
    • Both accused were served notices under Section 50 of the NDPS Act and opted to be searched in the presence of a Gazetted Officer.
    • A DSP thereafter reached the spot and directed the police officials to conduct the search.

    Opium Recovered From Bag Carried by Co-Accused Roshan Kumar

    • The critical factual circumstance noted by the High Court was the place of recovery.
    • The black shoulder bag was allegedly being carried by co-accused Roshan Kumar. During its search, police allegedly recovered a packet containing a black-coloured substance suspected to be opium.
    • The substance, together with its packing, weighed 2 kilograms and 702 grams.
    • The prosecution stated that the recovered material was sealed using the seals of the Investigating Officer and the DSP. The search proceedings were also allegedly videographed and uploaded on the e-Sakshya application.
    • However, the High Court specifically recorded that the alleged contraband was recovered from the bag carried by Roshan Kumar and not from Anil Kumar.

    Petitioner: Mere Association With Co-Accused Cannot Establish Conscious Possession

    • Anil Kumar argued that he had been falsely implicated and that no contraband was recovered from his conscious possession.
    • His counsel emphasised that although 2.702 kg of opium constituted commercial quantity, the recovery was made from the bag allegedly carried by co-accused Roshan Kumar.
    • It was argued that mere presence or association with a co-accused cannot, by itself, establish conscious possession of narcotic contraband.
    • The petitioner further submitted that the investigation had already been completed, the challan had been presented and no further recovery was required from him.
    • He also contended that material prosecution witnesses were yet to be examined, the trial was likely to take considerable time, and he had clean antecedents with no other NDPS or criminal case against him.

    Haryana Opposes Bail Citing Section 37 NDPS Act

    • The State opposed the bail application primarily on the ground that the recovery involved 2.702 kg of opium, which falls within commercial quantity.
    • It therefore argued that the stringent conditions contained in Section 37 of the NDPS Act applied.
    • The State also pointed out that Anil Kumar had been apprehended along with Roshan Kumar pursuant to secret information and contended that his involvement was a matter to be determined during trial.
    • The case therefore raised the familiar tension between the stringent bail restrictions applicable to commercial-quantity NDPS prosecutions and the constitutional protection of personal liberty under Article 21.

    Right to Speedy Trial Is Integral to Article 21: High Court

    The High Court devoted a substantial part of its order to the constitutional right to speedy trial.

    Justice Aggarwal observed that:

    • β€œThe right to a speedy trial is an integral facet of the fundamental right to life and personal liberty guaranteed under Article 21…”
    • The Court explained that the constitutional mandate does not merely require a fair trial. It also obligates the State to conclude criminal proceedings within a reasonable period so that the criminal process itself does not become punitive.

    Prolonged Pre-Trial Detention Cannot Become Punishment

    • The High Court relied on the Supreme Court’s landmark ruling in Hussainara Khatoon v. Home Secretary, State of Bihar, (1980) 1 SCC 81, which recognised speedy trial as an essential and integral component of Article 21.
    • It also referred to the Constitution Bench decisions in A.R. Antulay v. R.S. Nayak, (1992) 1 SCC 225 and P. Ramachandra Rao v. State of Karnataka, (2002) 4 SCC 578.
    • The Court noted that these judgments recognise speedy trial as a fundamental right and require constitutional courts to intervene where inordinate and unexplained delay results in denial of substantive justice.

    Nature of Offence Does Not Eclipse Right to Speedy Trial

    • The High Court further relied upon Tapas Kumar Palit v. State of Chhattisgarh, 2025 SCC OnLine SC 322 and Arvind Dham v. Directorate of Enforcement, 2026 (2) SSC (Criminal) 271, as cited in the order.
    • Referring to these decisions, the Court stated that the right to speedy trial under Article 21 is not eclipsed by the nature of the offence.
    • Prolonged incarceration of an undertrial without commencement or reasonable progress of trial can effectively transform pre-trial detention into punishment before conviction.
    • The Court further recorded the principle that where the State or prosecuting agency cannot secure the accused’s fundamental right to a speedy trial, bail cannot be opposed merely by relying on the seriousness of the allegations where continued incarceration becomes oppressive.

    Section 37 NDPS Act Cannot Authorise Indefinite Incarceration

    • The High Court then considered the special restrictions contained in the NDPS Act.
    • It acknowledged that the NDPS Act is a stringent penal statute enacted to combat illicit trafficking in narcotic drugs and psychotropic substances.
    • However, relying upon the Supreme Court judgment in Mohd. Muslim @ Hussain v. State (NCT of Delhi), 2023 SCC OnLine SC 352, the Court observed that Section 37 cannot be interpreted so rigidly as to compel indefinite incarceration of an undertrial merely because the trial has not progressed.
    • The order records the principle that a literal application of Section 37 divorced from constitutional values could result in punitive detention before conviction.
    • The Court further referred to the proposition that when the State is unable to conclude trial within a reasonable time, the restrictions under Section 37 must be considered alongside the constitutional mandate of Article 21.

    Mere Presence With Person Carrying Contraband Requires Evidence at Trial

    • Turning specifically to Anil Kumar’s case, the High Court found it important that the 2.702 kg of opium was recovered from the black bag carried by Roshan Kumar.
    • No contraband was alleged to have been recovered from Anil Kumar’s conscious possession.

    The Court observed:

    • β€œmere presence along with the person from whom the recovery was effected, in the absence of any specific recovery from the petitioner, would require appreciation of evidence during trial.”
    • The challan had already been presented and Anil Kumar remained in custody. In these circumstances, the Court concluded that his further incarceration would serve no useful purpose.
    • Importantly, this is a bail-stage finding, not a final determination that the petitioner had no connection with the alleged contraband. The question of his involvement and the prosecution evidence remains subject to adjudication at trial.

    Punjab & Haryana HC Grants Regular Bail

    • The High Court accordingly allowed Anil Kumar’s petition and ordered his release on regular bail, subject to furnishing the requisite bail and surety bonds to the satisfaction of the concerned Chief Judicial Magistrate, Illaqa Magistrate or Duty Magistrate.
    • The bail was made subject to several conditions designed to protect the integrity of the trial.
    • Among other things, the petitioner was directed not to induce, threaten or make promises to persons acquainted with the case and not to tamper with evidence or influence prosecution witnesses.
    • He was also prohibited from leaving India without prior permission of the Trial Court.

    Court Imposes Detailed Disclosure Conditions

    • The High Court additionally imposed detailed identification and disclosure requirements.
    • The petitioner must provide his permanent and current correspondence addresses with supporting documents. The Investigating Officer has been directed to verify those addresses within 48 hours of acceptance of the bail bonds.
    • The Court also directed the petitioner to furnish his PAN, Aadhaar number, particulars of all operative bank accounts and a declaration concerning immovable properties, if any.
    • Providing false information or concealing material particulars can constitute a ground for seeking cancellation of bail.
    • The petitioner must further notify the Investigating Officer and Trial Court of any change in his residential address or mobile number within seven days.
    • He must not commit a similar offence and must attend the trial unless his personal appearance is specifically exempted. Breach of these conditions may result in cancellation of bail and issuance of coercive process, including warrants of arrest.

    Cases Referred to by the High Court

    The order expressly referred to several important Supreme Court judgments concerning speedy trial, personal liberty and bail:

    1. Hussainara Khatoon v. Home Secretary, State of Bihar, (1980) 1 SCC 81 β€” speedy trial is an essential and integral component of Article 21.
    2. A.R. Antulay v. R.S. Nayak, (1992) 1 SCC 225 β€” constitutional recognition of the right to speedy trial.
    3. P. Ramachandra Rao v. State of Karnataka, (2002) 4 SCC 578 β€” speedy trial flows from Article 21 and constitutional courts may intervene against inordinate delay.
    4. Tapas Kumar Palit v. State of Chhattisgarh, 2025 SCC OnLine SC 322 β€” referred to regarding prolonged pre-trial incarceration and the constitutional right to speedy trial.
    5. Arvind Dham v. Directorate of Enforcement, 2026 (2) SSC (Criminal) 271 β€” cited for the proposition that the right to speedy trial is not eclipsed by the nature of the offence.
    6. Mohd. Muslim @ Hussain v. State (NCT of Delhi), 2023 SCC OnLine SC 352 β€” Section 37 NDPS Act cannot be applied so rigidly as to justify indefinite incarceration where the trial fails to progress within a reasonable time.

    Why the Judgment Is Significant

    • The ruling is important for NDPS bail jurisprudence, particularly in cases where the prosecution relies on recovery of commercial quantity but the contraband is not physically recovered from the applicant seeking bail.
    • The judgment does not dilute the stringent requirements of Section 37 as a general proposition. Instead, it illustrates that the Court must consider the specific role attributed to the accused, the circumstances of recovery, stage of investigation, progress of trial and constitutional protection of personal liberty.
    • It is also significant that the Court treated the question of whether mere association with a co-accused establishes conscious possession as an issue requiring evidence at trial rather than assuming possession solely from the petitioner’s presence at the place of recovery.

    Key Takeaway

    The Punjab and Haryana High Court has granted regular bail in a commercial-quantity NDPS case after noting that 2.702 kg of opium was recovered from a bag carried by the co-accused and not from the petitioner.

    The Court held at the bail stage that mere presence alongside the person from whom recovery was made, without a specific recovery from the petitioner, requires appreciation of evidence during trial. At the same time, the judgment reinforces the constitutional principle that the right to speedy trial under Article 21 remains relevant even in prosecutions governed by stringent special statutes such as the NDPS Act.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Punjab & Haryana High Court

    Disclaimer

    Handy Download:

    “Handy Order for Download”Download

    Write to us at office@aadrikaalaw.com

    Tel: +91-11-4999 2707

    www.aadrikaalaw.com

    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Rajasthan High Court: Trademark Applications Cannot Remain Pending Indefinitely; Speedy Disposal Is a Right Protected Under Article 21

    Rajasthan High Court: Trademark Applications Cannot Remain Pending Indefinitely; Speedy Disposal Is a Right Protected Under Article 21

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 21.09.2026

    Rajasthan High Court: Trademark Applications Cannot Remain Pending Indefinitely; Speedy Disposal Is a Right Protected Under Article 21

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Rajasthan High Court, Jaipur Bench, has held that trademark registration proceedings cannot be kept pending indefinitely and that the right to a speedy and expeditious hearing and timely disposal of statutory applications is an inalienable right of every litigant.

    Justice Maneesh Sharma, allowing a writ petition filed by Mittal Commerce Classes Pvt. Ltd., directed the Registrar of Trade Marks, Ahmedabad to endeavour to decide the company’s pending trademark application along with the connected opposition expeditiously and preferably within four months from receipt of a certified copy of the order.

    The order was passed on September 14, 2026, in Mittal Commerce Classes Pvt. Ltd. v. Union of India & Ors., S.B. Civil Writ Petition No. 9703/2026, Neutral Citation 2026:RJ-JP:36884.

    Trademark Application Pending Since 2018

    • Mittal Commerce Classes Pvt. Ltd., which provides educational coaching and training services, approached the High Court complaining of prolonged delay in adjudication of its trademark proceedings.
    • The company stated that it was already the registered proprietor of Trade Mark No. 2039137 dated October 18, 2010.
    • It subsequently filed Trademark Application No. 3944189 in Class 41 for the same/associated mark β€œMittal Commerce Class” before the Trade Marks Registry, Ahmedabad on September 13, 2018.
    • Despite completion of pleadings and filing of evidence, the trademark application remained undecided.
    • The petitioner argued that this prolonged pendency was causing serious prejudice and was inconsistent with the statutory scheme contemplated under the Trade Marks Rules, 2017.

    Opposition Filed in 2020, But Proceedings Remained Undecided

    • The High Court examined the procedural history and found that Trademark Application No. 3944189 had been filed on September 13, 2018.
    • Opposition No. 1043339 was subsequently filed on May 4, 2020.
    • After completion of pleadings by both parties, the matter was posted for evidence. However, the Court noted that nothing further had transpired despite the passage of more than six years.
    • By the time the High Court considered the matter, the trademark application had remained pending for approximately eight years, while the opposition had been pending for more than six years.

    Petitioner Invokes Rule 50 of Trade Marks Rules, 2017

    • Mittal Commerce Classes relied principally upon Rule 50 of the Trade Marks Rules, 2017, which governs hearing and decision in trademark opposition proceedings.
    • The company sought a direction requiring the Registrar to hear and finally dispose of the pending application and connected opposition without unnecessary adjournments or further avoidable delay.
    • The petitioner initially sought disposal preferably within 30 days, although the High Court ultimately fixed a preferred period of four months.

    What Does Rule 50 Require?

    • The High Court reproduced Rule 50 in detail.
    • Under Rule 50(1), after closure of evidence, the Registrar is required to issue notice to the parties specifying the first date of hearing. That hearing must be fixed for a date at least one month after the date of the first notice.
    • Rule 50(2) allows a party to seek an adjournment for reasonable cause through Form TM-M, accompanied by the prescribed fee and filed at least three days before the hearing.

    Crucially, the proviso imposes limits on adjournments:

    No party can be granted more than two adjournments, and each adjournment cannot exceed 30 days.

    • Rule 50 further provides consequences for non-appearance. If the applicant fails to appear on the adjourned hearing date, the application may be treated as abandoned; if the opponent fails to appear, the opposition may be dismissed for want of prosecution and the application may proceed toward registration, subject to Section 19.
    • The Registrar must also consider written arguments submitted by the parties and communicate the final decision in writing.

    Rajasthan HC: Rule 50 Shows Legislative Intent for Time-Bound Trademark Proceedings

    • The High Court interpreted the strict limits on adjournments under Rule 50 as reflecting a clear legislative intention.
    • Justice Sharma observed that the statutory restriction of a maximum of two adjournments, with each not exceeding 30 days, demonstrates that the Rules contemplate a complete and time-bound mechanism for expeditious disposal of trademark registration applications.
    • The Court held that the framework leaves β€œno room for unnecessary or avoidable delay.”
    • This observation is significant for applicants as well as opponents because prolonged pendency of trademark proceedings can create uncertainty regarding registration, enforcement and commercial exploitation of a mark.

    Registry: Petitioner Had Not Filed Rule 34 Application

    • The respondents opposed the writ petition.
    • They argued that a writ petition merely seeking expedition of pending proceedings was not maintainable in the form presented.
    • More importantly, they contended that Mittal Commerce Classes had not filed an application under Rule 34 of the Trade Marks Rules, 2017, and was therefore not entitled to seek the relief claimed before the High Court.
    • The High Court rejected this objection.

    Failure to File Rule 34 Application Cannot Be an Absolute Bar: Rajasthan HC

    Justice Sharma held that the petitioner’s failure to move a formal application seeking expedition under Rule 34 was merely a procedural omission and could not operate as an absolute bar against approaching the High Court for expeditious disposal of the trademark proceedings.

    The Court observed:

    β€œThe mere procedural omission of not having moved a formal application for expediting the proceedings under Rule 34 cannot operate as an absolute bar…”

    • Accordingly, the Registry’s procedural objection was rejected.
    • This aspect of the ruling is particularly relevant because it prevents procedural technicalities from becoming a justification for continued and excessive delay in deciding statutory applications.

    Excessive Delay in Trademark Proceedings Can Violate Natural Justice

    • The Rajasthan High Court relied upon an earlier decision of its Coordinate Bench in Mrs. Nirmala Kabra v. The Registrar of Trade Marks & Anr., S.B. Civil Writ Petition No. 18998/2022.
    • In that case, the Court had emphasised that excessive delays in deciding trademark registration applications undermine the very purpose for which such applications are filed.

    The judgment observed that prolonged proceedings can result in consequences including:

    • loss of evidence;
    • increased costs;
    • continuing uncertainty for businesses and litigants; and
    • erosion of public confidence in the fairness and efficiency of the statutory system.

    Most importantly, the Coordinate Bench had held that excessive delay in disposal of applications amounts to violation of principles of natural justice, because statutory procedures must be conducted fairly and within a reasonable timeframe.

    Speedy Disposal of Trademark Applications Protected Under Article 21

    • The most significant constitutional aspect of the ruling concerns Article 21 of the Constitution of India.
    • Quoting the earlier Nirmala Kabra decision, the Court reiterated that trademark registration applications cannot be allowed to remain pending for decades and that the Registrar of Trade Marks is not expected to keep such applications pending for an indefinite period.

    The earlier judgment had declared:

    β€œThe right of speedy and expeditious disposal of these applications is one of the most valuable and cherished rights of the applicant guaranteed under Article 21…”

    • Justice Sharma applied that principle to the case before him.
    • The Court then independently observed that the right to a speedy and expeditious hearing and timely disposal of statutory applications is an inalienable right of every litigant.
    • Such a valuable right, it held, cannot be curtailed or defeated on the altar of procedural technicalities.

    Eight-Year Pendency Considered Unacceptable

    • The factual timeline played an important role in the Court’s decision.
    • The trademark application had been pending since September 13, 2018, while the opposition had remained pending since May 4, 2020.

    The High Court recorded that this amounted to approximately:

    ProceedingDatePendency noted by Court
    Trademark Application No. 3944189September 13, 2018About 8 years
    Opposition No. 1043339May 4, 2020More than 6 years
    ClassClass 41Educational/coaching services
    Order of Rajasthan HCSeptember 14, 2026Writ allowed

    The Court concluded that such prolonged pendency justified issuance of a direction to the Registrar.

    Registrar Directed to Decide Trademark Application Preferably Within Four Months

    • The Rajasthan High Court ultimately allowed the writ petition.
    • It directed the Registrar of Trade Marks, Ahmedabad to make an endeavour to decide Trademark Application No. 3944189 together with Opposition No. 1043339 expeditiously and preferably within four months from receipt of a certified copy of the High Court’s order.
    • All other pending applications in the writ proceedings were consequently disposed of.
    • Importantly, the High Court did not decide whether the β€œMittal Commerce Classes” trademark should ultimately be registered or whether the opposition should succeed.
    • The judgment concerns the delay in adjudication and the petitioner’s right to obtain a timely decision. The merits of the trademark application and opposition remain for the Registrar to determine.

    Why the Judgment Is Important for Trademark Applicants and Opponents

    • The ruling has wider implications for parties facing long-pending proceedings before the Trade Marks Registry.
    • First, it reinforces that statutory trademark proceedings are expected to progress within a reasonable and time-bound framework, particularly once evidence has been completed and the matter has reached the hearing stage.
    • Second, the Court’s interpretation of Rule 50 emphasises that repeated adjournments cannot be used to indefinitely postpone adjudication. The Rules themselves cap both the number and duration of adjournments.
    • Third, the ruling indicates that failure to first file a procedural application seeking expedition under Rule 34 does not necessarily prevent a litigant from approaching the High Court where extraordinary delay has already occurred.
    • Finally, by connecting speedy disposal with Article 21 and principles of natural justice, the Rajasthan High Court has treated delay not merely as an administrative inconvenience but as an issue capable of affecting substantive procedural rights.

    Important Legal Distinction

    • The judgment should not be interpreted as granting Mittal Commerce Classes registration of its trademark.
    • The High Court has not adjudicated the merits of Trademark Application No. 3944189 or Opposition No. 1043339. It has instead directed the Registrar to bring the long-pending statutory proceedings to a timely conclusion.
    • The eventual question of whether the mark should be accepted or refusedβ€”and whether the opposition should succeedβ€”remains within the jurisdiction of the Trade Marks Registry.

    Key Takeaway

    The Rajasthan High Court has sent a clear message against indefinite pendency of trademark applications and opposition proceedings.

    Where an application filed in 2018 and an opposition filed in 2020 remained unresolved despite completion of the procedural stages, the Court held that procedural technicalities such as failure to file a Rule 34 application could not defeat the litigant’s right to seek timely adjudication.

    The Court’s reliance on Rule 50 of the Trade Marks Rules, 2017, principles of natural justice and Article 21 of the Constitution makes the decision particularly relevant to trademark applicants and opponents facing prolonged delays before the Registry.

    Connected Matter

    Rajasthan High Court: 15-Year Delay in Trademark Application Violates Natural Justice

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Rajasthan High Court

    Disclaimer

    Handy Download:

    “Handy Order for Download”Download

    Write to us at office@aadrikaalaw.com

    Tel: +91-11-4999 2707

    www.aadrikaalaw.com

    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • CESTAT Mumbai: Water-Insoluble Alcohol Ethoxylate Classifiable Under CTH 3824

    CESTAT Mumbai: Water-Insoluble Alcohol Ethoxylate Classifiable Under CTH 3824

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 21.09.2026

    CESTAT Mumbai: Water-Insoluble Alcohol Ethoxylate Classifiable Under CTH 3824

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    In a significant ruling concerning Customs classification of alcohol ethoxylates, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai has held that imported Ecolat S24-2 Alcohol Ethoxylate, containing two moles of ethylene oxide, is appropriately classifiable under CTI 3824 9090/3824 9990 and not under CTI 3402 1300 as a non-ionic organic surface-active agent.

    The Tribunal found that the Customs laboratory’s own test reports showed separation of insoluble matter when the product was mixed with water. Consequently, the product failed the statutory conditions contained in Chapter Note 3(a) to Chapter 34.

    Setting aside the Commissioner’s order, CESTAT also held that once the differential customs duty demand failed on merits, the consequential interest and penalties could not survive.

    Background of the Customs Classification Dispute

    • Sai Fertilizers & Phosphates Private Limited imported a product described as β€œAlcohol Ethoxylate” β€” Lauryl Alcohol Ethoxylate (LAE), bearing the brand name Ecolat S24-2 Alcohol Ethoxylate, CAS No. 68439-50-9, from Ecogreen Oleo Chemicals (Singapore) Pte Ltd.
    • The importer classified the goods under CTI 3824 9090/3824 9990 and claimed 0% Basic Customs Duty (BCD) under Serial No. 449(I) of Notification No. 46/2011-Customs dated June 1, 2011, as amended.
    • Customs, however, took the view that the product had been misclassified. According to the Department, it was properly classifiable under CTI 3402 1300 as a non-ionic organic surface-active agent, attracting 5% BCD under Serial No. 399(I) of the same notification.

    Customs Draws Samples and CRCL Tests the Product

    • A live consignment covered by Bill of Entry No. 4988518 dated August 9, 2021 was placed on hold by SIIB-I. Five representative samples were drawn and sent to the Deputy Chief Chemist, CRCL, JNCH.
    • The five test reports dated August 27 and August 30, 2021 treated the product as an organic surface-active agent primarily because of its ability to reduce surface tension.
    • Following investigation, Customs issued a Show Cause Notice dated July 19, 2022 proposing reclassification under CTI 3402 1300, recovery of differential duty with interest by invoking the extended period under Sections 18(2) and 28(4) of the Customs Act, confiscation under Section 111(m), and penalties under Sections 112(a), 114A and/or 114AA.
    • The Commissioner eventually confirmed the Department’s classification and consequential proposals. Sai Fertilizers challenged that order before CESTAT.

    Core Question: What Qualifies as an β€œOrganic Surface-Active Agent”?

    The dispute turned substantially on Chapter Note 3 to Chapter 34 of the Customs Tariff.

    For the purposes of Heading 3402, the Note defines β€œorganic surface-active agents” as products which, when mixed with water at a concentration of 0.5% at 20Β°C and left to stand for one hour at the same temperature:

    β€œgive a transparent or translucent liquid or stable emulsion without separation of insoluble matter”

    and

    reduce the surface tension of water to 4.5 Γ— 10⁻² N/m (45 dyne/cm) or less.

    The use of β€œand” became crucial because the importer argued that both conditions must be cumulatively satisfied before a product can legally fall within Heading 3402.

    Importer: Both Statutory Conditions Must Be Satisfied

    Sai Fertilizers argued that the product might satisfy the surface-tension test under Chapter Note 3(b), but it did not satisfy Chapter Note 3(a).

    The Department’s own laboratory reports recorded that the sample produced a:

    β€œtranslucent liquid with separation of insoluble matter.”

    • According to the importer, this finding was fatal to classification under Heading 3402 because Chapter Note 3(a) requires a transparent or translucent liquid or stable emulsion without separation of insoluble matter.
    • The importer further relied upon the Supreme Court judgment in Collector of Central Excise v. Fenoplast (P) Ltd., 1994 (72) E.L.T. 513 (S.C.), arguing that where the tariff itself contains a statutory definition, classification must follow that definition rather than trade parlance or other considerations.
    • It also relied upon the HSN Explanatory Notes, which exclude water-insoluble surface-active products and preparations from Heading 3402 and place them under Heading 3824.

    Revenue: Product Satisfied Requirements of Heading 3402

    • Customs argued that the product qualified as an organic surface-active agent.
    • According to Revenue’s interpretation, Chapter Note 3(a) should be read as containing alternatives: a transparent liquid, a translucent liquid, or a stable emulsion without separation of insoluble matter.
    • Since the product produced a translucent liquid and also reduced surface tension below the prescribed threshold, Customs maintained that the product was properly classifiable as a non-ionic surface-active agent under CTI 3402 1300.
    • Revenue also argued that the importer was obliged under Section 17 of the Customs Act to correctly self-assess its imports and alleged that the investigation disclosed a deliberate misclassification intended to evade duty.

    CESTAT: Statutory Definition Takes Priority in Tariff Classification

    • CESTAT began its analysis by reiterating the hierarchy applicable to Customs classification.
    • Under General Interpretative Rule 1 (GIR 1), classification is first determined according to the terms of the relevant headings and the applicable Section and Chapter Notes.
    • The Tribunal observed that where the Customs Tariff contains a statutory definition, that definition receives foremost consideration. Trade parlance becomes relevant principally where no statutory definition or appropriate guidance is available.
    • This principle was particularly important because Chapter Note 3 itself defines what qualifies as an organic surface-active agent for Heading 3402.

    Heading 3402 Versus Heading 3824

    • The Tribunal compared the competing headings.
    • CTH 3402 covers organic surface-active agents, including anionic, cationic, non-ionic and other types. CTI 3402 1300 specifically covers non-ionic agents.
    • However, the Tribunal stressed that a product must first possess the characteristics prescribed in Chapter Note 3 before it can be classified as an organic surface-active agent under Heading 3402.
    • In contrast, Heading 3824 covers chemical products and preparations of the chemical or allied industries that are not elsewhere specified or included.

    HSN Specifically Excludes Water-Insoluble Surface-Active Products From Heading 3402

    CESTAT also examined the Harmonized System Explanatory Notes.

    The Tribunal found that the HSN specifically excludes:

    β€œWater-insoluble surface-active agents/products and their preparations”

    • from Heading 3402 and indicates their classification under Heading 3824.
    • This supported the importer’s argument that surface-active properties alone do not automatically place a chemical within Heading 3402.

    Technical Literature Supported the Importer’s Classification

    • The Tribunal also examined the chemistry of ethoxylates.
    • It noted that the number of ethylene oxide groups affects the hydrophilic character and water solubility of the molecule. According to the technical material considered by CESTAT, an ethoxylate containing only two ethylene oxide groups has virtually no water solubility and is instead oil-soluble, whereas increasing the number of ethylene oxide groups increases water solubility.
    • The imported Ecolat S24-2, bearing CAS No. 68439-50-9, was identified as a low-ethoxylated non-ionic surfactant derived from C12-C14 fatty alcohols with two moles of ethylene oxide.
    • Thus, although the product had surface-active characteristics, that fact by itself was insufficient to satisfy the legal definition contained in Chapter Note 3.

    Customs’ Own CRCL Reports Went Against Classification Under Heading 3402

    The decisive evidence came from the Department’s own laboratory reports.

    CESTAT noted that while the samples reduced surface tension to the required level, the reports expressly recorded:

    β€œthe sample in water produce translucent liquid with separation of insoluble matter.”

    • The Tribunal held that this did not satisfy Chapter Note 3(a).
    • The statutory language requires the transparent or translucent liquid or stable emulsion to be without separation of insoluble matter.

    CESTAT therefore concluded:

    • β€œit cannot be said that the imported goods have fulfilled the requirements of Chapter Note 3 for classification under sub-heading 3402.”
    • This finding effectively defeated the Department’s classification.

    Godrej Industries Decision Applied to Sai Fertilizers

    • The Tribunal also relied on its recent coordinate Bench ruling involving Godrej Industries Limited.
    • In Commissioner of Customs (NS-I), Nhava Sheva v. Godrej Industries Limited, Customs Appeal No. 85996 of 2022, Final Order No. A/86060/2026 dated August 21, 2026, CESTAT had dealt with the classification of Dehydol LS1 TH (One Mol Alcohol Ethoxylate 1214).
    • In that case, the Tribunal had held that the appropriate classification was under CTI 3824 9090/3824 9990.
    • CESTAT found that the same conclusion applied to Sai Fertilizers because the classification issue involved substantially identical facts.

    CESTAT Sets Aside Customs Classification, Duty Demand and Penalties

    On the basis of the statutory Chapter Note, HSN Explanatory Notes, technical characteristics and CRCL test results, CESTAT held that the imported goods were appropriately classifiable under:

    • CTI 3824 9090 / CTI 3824 9990 and not under CTI 3402 1300.
    • Accordingly, the Commissioner’s order dated July 12, 2024 failed to withstand legal scrutiny.
    • Since the demand for customs duty itself was unsustainable on merits, CESTAT held that the consequential interest and penalties also could not survive.
    • The Tribunal consequently set aside the impugned order in its entirety and allowed the appeal in favour of Sai Fertilizers & Phosphates Private Limited.

    Significance for Chemical Importers

    The ruling is significant for importers of surfactants, fatty alcohol ethoxylates and specialty chemicals because it demonstrates that commercial description or surface-active functionality cannot by itself determine Customs classification.

    Where a Chapter Note provides a specific legal definition, every mandatory condition forming part of that definition must be satisfied.

    A chemical may reduce surface tension and commercially function as a surfactant, but if it fails the water-solubility characteristics prescribed by Chapter Note 3, it cannot automatically be classified as an organic surface-active agent under Heading 3402. The decision also reinforces the importance of CRCL test reports, HSN Explanatory Notes, CAS identification and technical literature in resolving classification disputes.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: CESTAT Mumbai

    Disclaimer

    Handy Download:

    “Handy Order for Download”Download

    Write to us at office@aadrikaalaw.com

    Tel: +91-11-4999 2707

    www.aadrikaalaw.com

    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Drone Found With 500-Gram Heroin Packet: Punjab & Haryana HC Grants Bail to Accused After Year-Long Custody

    Drone Found With 500-Gram Heroin Packet: Punjab & Haryana HC Grants Bail to Accused After Year-Long Custody

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 19.09.2026

    Drone Found With 500-Gram Heroin Packet: Punjab & Haryana HC Grants Bail to Accused After Year-Long Custody

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Punjab and Haryana High Court has granted regular bail to an accused in an NDPS case involving the alleged recovery of 500 grams of heroin found alongside a drone, observing that the accused’s connection with the contraband and the admissibility of the disclosure statement relied upon by the prosecution are matters to be determined during trial.

    Justice Vikram Aggarwal, in Lovepreet Singh @ Labha v. State of Punjab, CRM-M-7640-2026 (O&M), passed the order on 17 September 2026.

    Drone and 500 Grams of Heroin Found in Riverbed

    • The case arose from FIR No. 22 dated 30 April 2025, registered at Police Station Narot Jaimal Singh, District Pathankot, under Section 21 of the Narcotic Drugs and Psychotropic Substances Act, 1985, along with Sections 10, 11 and 12 of the Aircraft Act, 1934.
    • According to the prosecution case recorded by the High Court, a drone was recovered from a riverbed on 30 April 2025. A packet was found alongside the drone, from which 500 grams of heroin was allegedly recovered.
    • Significantly, the order does not state that the heroin was physically recovered from Lovepreet Singh.

    Accused Linked to Recovery Through Later Disclosure Statement

    • The petitioner was subsequently apprehended in another caseβ€”FIR No. 92 dated 1 August 2025, registered at Police Station Taragarh under Sections 21 and 29 of the NDPS Act.
    • Another case, FIR No. 93 dated 2 August 2025, was also registered at the same police station under Sections 21 and 29 of the NDPS Act and Section 111 of the Bharatiya Nyaya Sanhita.
    • The prosecution alleged that while involved in FIR No. 92, Lovepreet Singh made a disclosure statement on 31 August 2025, stating that the heroin recovered on 30 April 2025 belonged to him.
    • On that basis, he was arrested in the present case on 16 September 2025 and remained in custody thereafter.

    Defence: No Evidence Apart From Disclosure Statement

    • Counsel for Lovepreet Singh argued that the petitioner had been falsely implicated and could not otherwise be connected with the contraband recovered alongside the drone.
    • The defence specifically contended that, apart from the alleged disclosure statement, there was no other evidence linking the petitioner with the recovered heroin.
    • It was further submitted that the investigation had already been completed and the final report submitted, but charges had still not been framed. Of the 18 prosecution witnesses, none had been examined.
    • The defence therefore argued that the trial was likely to take considerable time and that continued incarceration would serve no useful purpose.

    Punjab Opposes Bail Citing Commercial Quantity

    • The State of Punjab opposed the regular bail application.
    • The State argued that the case involved a commercial quantity of heroin and relied upon the petitioner’s alleged statement that the recovered narcotic substance belonged to him.
    • The High Court, however, did not finally determine whether the disclosure statement was admissible or whether it sufficiently connected the petitioner with the contraband.

    Whether Disclosure Statement Is Admissible Must Be Decided at Trial: High Court

    • The High Court observed that the question of whether Lovepreet Singh could actually be linked with the recovered contraband could only be determined upon conclusion of the trial.
    • The Court noted that the recovery had taken place on 30 April 2025, whereas the petitioner, while already in custody in another case, was alleged to have subsequently made the disclosure statement regarding the heroin.

    Crucially, the Court observed:

    • β€œThe admissibility of the same shall also be determined at the stage of trial.”
    • Thus, for purposes of the bail proceedings, the High Court did not treat the alleged disclosure statement as finally establishing the petitioner’s connection with the narcotic substance.

    One Year in Custody; Not a Single Witness Examined

    • The duration of custody and lack of progress in the trial also weighed with the High Court.
    • Lovepreet Singh had remained in custody since 16 September 2025, meaning that approximately one year had elapsed by the time his bail petition was decided.
    • The investigation was complete and the final report had already been submitted. Despite this, charges had not been framed and none of the 18 prosecution witnesses had been examined.
    • The Court consequently found it clear that the trial would take a β€œsufficiently long time” to conclude.
    • In those circumstances, Justice Aggarwal held that no useful purpose would be served by keeping the petitioner in custody any longer.

    High Court Orders Release on Regular Bail

    • The Punjab and Haryana High Court accordingly allowed the petition without expressing any opinion on the merits of the criminal case.
    • Lovepreet Singh was ordered to be released on regular bail upon furnishing the required bail and surety bonds to the satisfaction of the concerned Trial Court, Chief Judicial Magistrate or Duty Magistrate.
    • The order is therefore a bail decision and not an acquittal. The questions of the petitioner’s connection with the heroin, the evidentiary value and admissibility of the disclosure statement, and the prosecution allegations remain open for determination during trial.

    Why the Order Is Significant

    • The order highlights two considerations that can become important in NDPS bail proceedings: the nature of the material connecting an accused with the recovered contraband and the progress of the criminal trial during prolonged custody.
    • Here, the alleged heroin was found alongside a drone months before the petitioner was arrested in the case, while the link asserted against him was based on a subsequent disclosure statement allegedly made while he was already in custody in another matter. The High Court expressly left the admissibility of that statement to be determined at trial.
    • At the same time, the Court took into account that the petitioner had spent a year in custody, investigation was over, the final report had been filed, charges remained unframed and 0 out of 18 witnesses had been examined.
    • The order should, however, be read on its own facts and does not contain a general ruling that every disclosure-statement-based NDPS case automatically entitles an accused to bail.

    Key Takeaway

    The Punjab and Haryana High Court granted regular bail to Lovepreet Singh in the 500-gram heroin case after noting that the narcotic substance had been recovered alongside a drone months before his arrest, while his alleged connection to it arose through a later disclosure statement whose admissibility remained a matter for trial.

    With the petitioner having spent around a year in custody, investigation completed, charges yet to be framed and none of the 18 witnesses examined, the Court concluded that continued incarceration would serve no useful purpose.

    The Court expressly refrained from commenting on the merits of the prosecution case.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Punjab & Haryana High Court

    Disclaimer

    Handy Download:

    “Handy Order for Download”Download

    Write to us at office@aadrikaalaw.com

    Tel: +91-11-4999 2707

    www.aadrikaalaw.com

    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Punjab & Haryana HC: Trade Mark Search & Seizure Cannot Be Conducted by Officer Below DSP Rank

    Punjab & Haryana HC: Trade Mark Search & Seizure Cannot Be Conducted by Officer Below DSP Rank

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 19.09.2026

    Punjab & Haryana HC: Trade Mark Search & Seizure Cannot Be Conducted by Officer Below DSP Rank

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Punjab and Haryana High Court has quashed a criminal prosecution under Sections 103 and 104 of the Trade Marks Act, 1999, holding that the mandatory safeguards prescribed under Section 115(4) were violated because the search and seizure was conducted by an officer below the rank of Deputy Superintendent of Police and without obtaining the prior opinion of the Registrar of Trade Marks.

    In Ashok Kumar v. State of Punjab & Anr., CRM-M-12823-2021 (O&M), Justice Jasjit Singh Bedi held that the statutory procedure had been breached on two counts and that there was consequently a β€œclear statutory embargo” on the initiation and continuation of the criminal proceedings.

    The judgment was delivered on 10 January 2023.

    Allegations of Selling Duplicate β€œNorth Face” and β€œJansport” Bags

    • The proceedings originated from a complaint submitted by Vishal Joshi, described as an Enforcement Officer of United Overseas Trade Mark Company.
    • The complainant alleged that Ashok Kumar, proprietor of Amar Bag House, was manufacturing, selling and supplying duplicate bags bearing the marks β€œNorth Face” and β€œJansport.”
    • On the basis of the complaint, FIR No. 10 dated 1 February 2019 was registered at Police Station Mahilpur, District Hoshiarpur, initially under Sections 63 and 65 of the Copyright Act, 1957.

    136 Allegedly Fake Bags Recovered During Raid

    • During the investigation, the police raided the petitioner’s shop.
    • According to the judgment, the search resulted in recovery of 60 black bags carrying the β€œNorth Face” mark and 76 bags carrying the β€œJansport” mark, totalling 136 bags.
    • A wooden board carrying a β€œJansport” company sticker was also recovered. The recovered bags were alleged to be fake and were taken into police possession.
    • However, the legality of the manner in which this search and seizure was carried out ultimately became decisive before the High Court.

    Copyright Charges Deleted; Trade Marks Act Invoked

    • After investigation, the police initially prepared the final report under Sections 63 and 65 of the Copyright Act.
    • The matter was thereafter sent to the District Attorney, Hoshiarpur, who opined that offences under Sections 103 and 104 of the Trade Marks Act, 1999 were made out. Consequently, the Copyright Act offences were deleted and the report under Section 173(2) CrPC was presented under Sections 103 and 104 of the Trade Marks Act.
    • Charges were subsequently framed against Ashok Kumar under those provisions on 1 February 2021.
    • The petitioner then approached the High Court under Section 482 CrPC, seeking quashing of the FIR, the order framing charges and all consequential proceedings.

    Petitioner Challenges Search and Seizure Under Section 115(4)

    • Ashok Kumar’s principal argument was that the investigation had failed to comply with the mandatory requirements of Section 115(4) of the Trade Marks Act.
    • He raised two specific objections.
    • First, the search and seizure had been conducted by officers of the rank of Sub-Inspector/Assistant Sub-Inspector, whereas Section 115(4) authorises warrantless search and seizure by a police officer not below the rank of Deputy Superintendent of Police or equivalent.
    • Second, the police had not obtained the opinion of the Registrar of Trade Marks before conducting the search and seizure, as required by the proviso to Section 115(4).
    • The petitioner therefore argued that the entire search and seizure stood vitiated and the resulting criminal prosecution could not legally continue.

    What Section 115(4) of the Trade Marks Act Requires

    • The High Court reproduced Section 115 of the Trade Marks Act and closely examined its statutory safeguards.
    • Under Section 115(3), offences under Sections 103, 104 and 105 are cognizable.
    • However, Section 115(4) provides that a police officer not below the rank of Deputy Superintendent of Police or equivalent may conduct a warrantless search and seizure where satisfied that an offence referred to in Section 115(3) has been, is being, or is likely to be committed.
    • Crucially, the proviso further states that before conducting any search and seizure, the police officer shall obtain the opinion of the Registrar on the facts involved in the offence relating to the trade mark and shall abide by that opinion.
    • Thus, the Court treated the statutory scheme as imposing substantive procedural safeguards upon police action in such trademark prosecutions.

    Search by Sub-Inspector Violated Section 115(4)

    • The High Court found from the recovery memo and the final report under Section 173(2) CrPC that the search and seizure had in fact been conducted by an officer of the rank of Sub-Inspector.
    • Justice Bedi held that this directly violated Section 115(4), because the raid and consequential search and seizure were required to be undertaken by an officer not below the rank of Deputy Superintendent of Police or equivalent.
    • The Court consequently held that the proceedings emanating from the FIR were liable to be quashed on this ground.

    Prior Opinion of Registrar of Trade Marks Was Also Mandatory

    • There was a second and independent statutory violation.
    • The Court found that no opinion of the Registrar of Trade Marks had been obtained before the search and seizure.
    • The Sub-Inspector who conducted the search was therefore not only below the statutorily prescribed rank but had also proceeded without complying with the proviso to Section 115(4).
    • The High Court held that the proceedings were liable to be quashed on this ground as well.

    State Argues Objections Should Be Decided During Trial

    • The State opposed the quashing petition.
    • It argued that after registration of the FIR, the police had completed investigation and presented the report under Section 173(2) CrPC. Charges had also been framed.
    • According to the State, the grounds raised by the petitioner could therefore be adjudicated during the trial rather than being used to quash the prosecution at the threshold.
    • However, the State also conceded that its reply contained no specific denial of the petitioner’s contentions concerning the alleged statutory violations.
    • The High Court ultimately rejected the argument that the petitioner should be relegated to trial because the defect concerned violation of the statutory conditions governing the very search and seizure underlying the prosecution.

    Mandatory Procedure Under Trade Marks Act Cannot Be Ignored

    • The High Court relied on its earlier decisions in Anil Kumar v. State of Punjab & Anr. and Satpal & Anr. v. State of Punjab & Ors..
    • In Anil Kumar, the Court had held that Section 115(4) does not permit an officer below the rank of DSP to conduct the relevant search and seizure. It had further held that obtaining the Registrar’s opinion before such action was mandatory, observing that use of the word β€œshall” indicated the mandatory nature of the requirement.
    • Similarly, in Satpal, the Court held that where the search was conducted by a Sub-Inspector without obtaining the Registrar’s opinion, the proceedings stood vitiated. It emphasised that where a statute creating an offence also prescribes a procedure, authorities cannot simply ignore that procedure.

    Other High Court Precedents Support Mandatory Compliance

    • The judgment also referred to the Madhya Pradesh High Court decision in Kasim Ali v. State of Madhya Pradesh & Anr., where prosecution under the Trade Marks Act was found unsustainable because the mandatory Section 115 procedure had not been followed.
    • That decision similarly recognised that a search under Section 115(4) must be conducted by the prescribed rank of police officer and only after obtaining the Registrar’s opinion.
    • The Punjab and Haryana High Court also considered Pitambra Industries v. State of Madhya Pradesh & Ors., in which the Madhya Pradesh High Court treated obtaining the Registrar’s opinion before search and seizure as a sine qua non and held that compliance with Section 115(4) was mandatory.
    • The Court further referred to the Bombay High Court’s ruling in Shrenik Shantilal Dhadiwal v. State of Maharashtra & Ors., where investigation by an Assistant Police Inspector without the Registrar’s opinion was found contrary to Section 115(4).

    Bhajan Lal Principles Applied

    • The petitioner also relied upon the Supreme Court’s landmark judgment in State of Haryana & Ors. v. Bhajan Lal & Ors., 1992 Supp (1) SCC 335.
    • Among the recognised categories for exercising jurisdiction under Section 482 CrPC is a situation where there exists an express legal bar under the Code or the concerned statute to the institution or continuation of criminal proceedings.
    • Applying this principle, the High Court found that Section 115(4) had been violated in two material respects:
    • the search and seizure was undertaken by an officer below the rank of DSP, and the proceedings were initiated without obtaining the opinion of the Registrar of Trade Marks.
    • The Court therefore concluded that there was a clear statutory embargo on the initiation and continuation of the proceedings.

    FIR, Charges and Entire Criminal Proceedings Quashed

    Having found both statutory violations established, the Punjab and Haryana High Court allowed Ashok Kumar’s petition.

    It quashed:

    • FIR No. 10 dated 1 February 2019 under Sections 103 and 104 of the Trade Marks Act at Police Station Mahilpur, District Hoshiarpur;
    • the order dated 1 February 2021 framing charges against the petitioner; and
    • all subsequent proceedings arising from the FIR.

    Thus, Ashok Kumar succeeded before the High Court, and the prosecution arising from the allegedly counterfeit β€œNorth Face” and β€œJansport” bags was brought to an end because the mandatory statutory procedure governing search and seizure had not been followed.

    Key Takeaway

    The judgment underscores that the procedural safeguards contained in Section 115(4) of the Trade Marks Act cannot be bypassed in criminal enforcement actions involving offences under Sections 103, 104 and 105.

    Where a warrantless search and seizure is undertaken under Section 115(4), the judgment treats two requirements as critical: the officer conducting the statutory search must be not below the rank of Deputy Superintendent of Police or equivalent, and the prescribed opinion of the Registrar of Trade Marks must be obtained before the search and seizure. In Ashok Kumar, failure to satisfy both requirements was sufficient for the High Court to hold that continuation of the prosecution was legally impermissible and to quash the FIR, charge-framing order and all consequential proceedings.

    Connected Matter

    Gujarat HC Quashes Copyright FIR Over Alleged Counterfeit Apple Accessories; Says Trademark Dispute Cannot Be Camouflaged as Copyright Offence to Bypass Statutory Safeguards

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Punjab & Haryana High Court

    Disclaimer

    Handy Download:

    “Handy Order for Download”Download

    Write to us at office@aadrikaalaw.com

    Tel: +91-11-4999 2707

    www.aadrikaalaw.com

    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Gujarat High Court: Customs Refund Limitation Cannot Run Until Final Assessment Is Communicated to Importer; Mere ICEGATE Upload Not Enough

    Gujarat High Court: Customs Refund Limitation Cannot Run Until Final Assessment Is Communicated to Importer; Mere ICEGATE Upload Not Enough

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 19.09.2026

    Gujarat High Court: Customs Refund Limitation Cannot Run Until Final Assessment Is Communicated to Importer; Mere ICEGATE Upload Not Enough

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Gujarat High Court has held that merely uploading an order finalising provisional assessment on the Customs electronic portal is not sufficient to start the limitation period for claiming refund under Section 27(1B)(c) of the Customs Act, 1962. The final assessment must be communicated to the assessee before the statutory one-year period can operate against it.

    The Division Bench of Justice Bhargav D. Karia and Justice Niral R. Mehta, in Principal Commissioner, Customs, Ahmedabad Commissionerate v. M/s GAIL (India) Ltd., R/Tax Appeal No. 211 of 2024, dismissed the Revenue’s appeal on 13 June 2024, finding no infirmity in CESTAT’s decision in favour of GAIL. The judgment carries neutral citation 2024:GUJHC:30963-DB.

    Dispute Over Refund of Excess Customs Duty on Imported LNG

    • GAIL (India) Ltd. was engaged in the import of Liquefied Natural Gas (LNG). It filed 16 Bills of Entry, which were initially assessed provisionally under Section 18 of the Customs Act upon execution of a bond. After production of the original documents, the Bills of Entry were subsequently finalised.
    • The table reproduced by the High Court on pages 3 and 4 of the judgment records the provisional and finally assessed quantities, Customs duty paid and the refund claimed for each Bill of Entry. The aggregate excess duty claimed as refund was β‚Ή7,78,98,646.
    • GAIL eventually filed its refund application on 26 October 2016. It also submitted a Chartered Accountant’s certificate dated 7 September 2016 concerning unjust enrichment, stating that the excess Customs duty had been reflected as a receivable in its books and had not been passed on to customers.

    Customs Department Rejected Refund as Time-Barred

    • The adjudicating authority rejected GAIL’s refund claim on limitation.
    • According to Customs, the 16 Bills of Entry had been finally assessed between 7 October 2015 and 20 October 2015. Since the refund application was filed on 26 October 2016, the Department treated it as having been filed beyond the one-year limitation prescribed under Section 27(1B)(c).
    • The Department’s case was essentially that Section 27(1B)(c), where duty has been provisionally paid under Section 18, computes the limitation period from the date of adjustment of duty after final assessment or, in the case of reassessment, from the date of reassessment.

    CESTAT Allowed GAIL’s Appeal

    • GAIL challenged the rejection before CESTAT.
    • The Tribunal allowed the appeal by relying upon Indian Oil Corporation Ltd., 2014 (308) E.L.T. 169, holding that the relevant point for limitation was the date of service of the finalisation of provisional assessment.
    • The precedent emphasised that where an order gives rise to a remedial right, the date on which the order is served upon the person concerned assumes significance for exercising that remedy.
    • CESTAT consequently rejected the Department’s contention that the importer should simply have discovered the finalisation through ICEGATE.

    Revenue Approaches Gujarat High Court

    • The Principal Commissioner of Customs challenged the Tribunal’s order before the Gujarat High Court under Section 130 of the Customs Act.
    • The principal question proposed by Revenue was whether CESTAT was correct in treating the date of service of the finalisation order as the relevant date for limitation when Section 27(1B)(c) refers to the date of adjustment of duty after final assessment or the date of reassessment.
    • Revenue argued that the final assessments had already been uploaded on the ICEGATE system and that GAIL was required to take notice of the assessments made available on the portal. On this basis, Customs contended that the refund application was beyond limitation.

    Section 27(1B)(c): One-Year Limitation After Finalisation

    • The High Court examined Sections 18 and 27 of the Customs Act, 1962.
    • Section 27(1B)(c) provides that where duty has been paid provisionally under Section 18, the one-year limitation is computed from the date of adjustment of duty after final assessment, or, in the case of reassessment, from the date of reassessment.
    • The High Court accepted that once provisional assessment is completed and an assessee becomes entitled to refund, the refund application has to be made within the period prescribed under Section 27 read with Section 27(1B).
    • The crucial question, however, was whether limitation could operate against an assessee before the final assessment had actually been communicated to it.

    GAIL’s August 2016 Letter Became Crucial

    • A significant factual circumstance was GAIL’s letter dated 19 August 2016.
    • The adjudicating authority itself had recorded that this letter requested the Department to finalise the Customs duty/final assessment. Customs rejected GAIL’s argument that this letter itself should be treated as a refund claim, observing that it was merely a request for early finalisation and was unrelated to a refund application.
    • But that finding had another consequence.
    • The Gujarat High Court observed that the very fact that GAIL was requesting finalisation on 19 August 2016 indicated that, until then, the assessee was not aware that the final assessments had already been completed.
    • This became an important factual basis for rejecting Revenue’s limitation argument.

    Mere Upload on Customs Portal Is Not Sufficient Communication

    The most important part of the judgment is the High Court’s finding concerning electronic uploading of the assessment order.

    The Court held:

    • β€œMerely because the Custom Department has uploaded the final assessment orders on portal is not sufficient compliance of intimation to the assessee…”
    • The Court treated communication of the final assessment as a condition sine qua non for the assessee to exercise the statutory right of seeking refund within one year under Section 27(1B)(c).
    • It further held that CESTAT had correctly considered the documents showing when the finalisation of provisional assessments was actually communicated to GAIL.
    • The decision therefore draws an important distinction between an order merely being available electronically on a departmental portal and the order being communicated to the person whose statutory remedy depends upon knowledge of that order.

    Gujarat High Court Dismisses Revenue’s Appeal

    • The High Court found no infirmity in CESTAT’s order and held that no question of law, much less any substantial question of law, arose for consideration.
    • The Revenue’s appeal was therefore dismissed as being devoid of merit.
    • Thus, GAIL (India) Ltd. succeeded before the Gujarat High Court on the limitation dispute concerning its Customs refund claim.

    Why the Judgment Is Important for Importers

    • The decision has considerable practical importance for importers whose Bills of Entry have been provisionally assessed under Section 18 and who subsequently become entitled to refund following finalisation.
    • The judgment establishes that the Department cannot necessarily rely only upon the internal date of final assessment or the fact that the assessment was uploaded on ICEGATE when the importer was not shown to have been duly informed of the finalisation.
    • For refund disputes under Section 27(1B)(c), evidence relating to communication or service of the final assessment can therefore become critical in determining whether the refund application is within limitation.
    • The judgment is particularly relevant where Customs argues that the importer should have independently monitored the portal even though no effective communication of the final assessment was established.

    Key Legal Principle

    The principle emerging from the judgment can be stated succinctly:

    Where refund arises following finalisation of provisional assessment under Section 18 of the Customs Act, the statutory limitation under Section 27(1B)(c) cannot effectively be invoked against the assessee merely on the basis that the final assessment was uploaded on the Customs portal. Communication of the final assessment to the assessee is essential before limitation can operate against the refund claim.

    The ruling therefore reinforces the procedural importance of actual communication of Customs assessment orders, particularly where commencement of a limitation period affects an importer’s substantive right to claim refund.

    Connected Matter

    CESTAT Chennai: Refund Limitation Cannot Begin Before Final Assessment Order Is Communicated to Importer

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Gujarat High Court

    Disclaimer

    Handy Download:

    “Handy Order for Download”Download

    Write to us at office@aadrikaalaw.com

    Tel: +91-11-4999 2707

    www.aadrikaalaw.com

    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Supreme Court Acquits Man Sentenced to 10 Years; Finds Serious Lapses in NDPS Sampling Procedure

    Supreme Court Acquits Man Sentenced to 10 Years; Finds Serious Lapses in NDPS Sampling Procedure

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 18.09.2026

    Supreme Court Acquits Man Sentenced to 10 Years; Finds Serious Lapses in NDPS Sampling Procedure

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Supreme Court has acquitted a man sentenced to 10 years’ rigorous imprisonment in an NDPS case after finding serious deficiencies in the seizure and sampling process, including failure to draw representative samples in the presence of a Magistrate and non-compliance with the procedure contemplated under Section 52A of the NDPS Act.

    In Nadeem Ahamed v. State of West Bengal, the Court held that the cumulative procedural lapses made the integrity of the seizure and sampling process doubtful. It further held that the Forensic Science Laboratory (FSL) report could not be read in evidence, leaving no acceptable evidence to establish that the substance allegedly recovered from the appellant was heroin. The conviction was consequently set aside and Nadeem Ahamed was acquitted.

    Trial Court Had Sentenced Accused to 10 Years’ Rigorous Imprisonment

    • Nadeem Ahamed had been convicted by the Special Court under the NDPS Act at Alipore, West Bengal, for offences punishable under Sections 21(c) and 29 of the NDPS Act.
    • By its judgment dated August 24, 2021 and sentencing order dated August 26, 2021, the Trial Court sentenced him to 10 years’ rigorous imprisonment and a fine of β‚Ή1 lakh, with a further six months’ rigorous imprisonment in default of payment of the fine.
    • His appeal before the Calcutta High Court was filed with a delay of 1,183 days. The High Court declined to condone the delay and dismissed the appeal without examining the conviction on merits.

    Alleged Recovery of 125 Grams of Heroin

    • According to the prosecution, on July 16, 2018, police received information that two men would arrive near Pragati Maidan Police Station in Kolkata to supply heroin.
    • A raiding team intercepted Nadeem Ahamed and co-accused Amit Dutta alias Rakesh. The accused opted to be searched in the presence of a Gazetted Officer.
    • The prosecution claimed that approximately 130 grams of suspected heroin was recovered from Amit Dutta, while 125 grams was recovered from Nadeem.
    • The combined weight of the substances was 255 grams, and the prosecution treated the recovery as commercial quantity. One sample weighing 10 grams was drawn from each packet and marked S1 and S2.
    • The samples were subsequently sent to the FSL, which reported that both tested positive for heroin.

    Supreme Court Says High Court Was Wrong to Dismiss Appeal Solely on Delay

    • Before considering the merits, the Supreme Court strongly disagreed with the Calcutta High Court’s decision to dismiss the criminal appeal merely because it had been filed late.
    • The Court noted that Nadeem had remained incarcerated since his initial apprehension and did not have the financial means to file his appeal within time.
    • It held that rejecting his statutory appeal solely on delay was β€œtoo harsh and unjustified”. The High Court ought to have condoned the delay and decided the appeal on merits.
    • Instead of remanding the caseβ€”which would have caused further delayβ€”the Supreme Court itself examined the merits of the conviction.

    Two Separate Recoveries Could Not Automatically Be Clubbed Together

    • A major error identified by the Supreme Court concerned the treatment of the two recoveries as one combined commercial quantity.
    • The Court held that merely because Nadeem and Amit Dutta were walking side-by-side, were apprehended simultaneously and were individually carrying suspected narcotics did not establish that either knew about the substance carried by the other.
    • Such circumstances could create suspicion, but the Court reiterated that β€œsuspicion… cannot take place of proof.”
    • To invoke conspiracy under Section 29 and club the quantities recovered from two separate individuals, the prosecution was required to produce positive and tangible evidence demonstrating prior knowledge or conspiracy.
    • The Supreme Court found no such evidence. Apart from the allegation that the two men were walking together and were searched one after another, there was no material establishing a prior conspiracy.

    125 Grams and 130 Grams Could Not Be Clubbed to Cross Commercial-Quantity Threshold

    • The Trial Court had combined the alleged recoveries of 125 grams and 130 grams, resulting in a total of 255 grams, and treated this as exceeding the commercial-quantity threshold of 250 grams.
    • The Supreme Court found this approach legally unsustainable in the absence of evidence proving conspiracy between the two accused.
    • Relying upon Amarsingh Ramjibhai Barot v. State of Gujarat, (2005) 7 SCC 550, the Court held that the Trial Court had committed a grave factual error by clubbing the heroin allegedly recovered from two distinct individuals merely to bring the total above the commercial-quantity threshold.

    Serious Defects Found in Sampling Procedure

    • The Supreme Court then examined the manner in which the alleged contraband was sampled and found several significant deficiencies.
    • The seizure officer had collected only one sample from each packet. The Court noted that this was contrary to Clause 2.2 of Standing Order No. 1 of 1989 dated June 13, 1989, issued by the Anti-Smuggling Unit, Department of Revenue, Ministry of Finance.
    • The Standing Order contemplated that samples from seized narcotic drugs and psychotropic substances should be drawn in duplicate at the spot of recovery, in the presence of the panch witnesses and the person from whom the substance was recovered.
    • The Court referred to Noor Aga v. State of Punjab, (2008) 16 SCC 417, where the Supreme Court had emphasised compliance with such guidelines, particularly in penal proceedings.

    Accused’s Signatures Missing From Sample and Mother Packets

    • Another serious discrepancy concerned the signatures on the seized material.
    • The seizure officer claimed that the accused, Gazetted Officer and witnesses had signed the seizure list and labels. However, when the sample packets were opened during trial, the Court found that the labels did not bear the accused-appellant’s signatures.
    • After examining the evidence, the Supreme Court recorded that neither the mother packet nor the sample packets bore Nadeem’s signatures when they were opened and exhibited before the Trial Court.
    • This discrepancy further undermined the reliability and integrity of the sampling process.

    No Separate Sample Seizure List, Test Memo or Weighment Chart

    • The Court identified additional gaps in the prosecution evidence.
    • No separate seizure list had been prepared for the samples drawn from the appellant. There was also no test memo or weighment chart prepared at the spot, and no specimen seal memo was proved during the seizure officer’s evidence.
    • Although two independent witnesses had allegedly participated in the proceedings, only one was examined by the prosecution, without explaining why the other was withheld.

    Complete Failure to Follow Section 52A Procedure

    • The most significant deficiency identified by the Supreme Court concerned Section 52A(2) of the NDPS Act.
    • The record showed that neither the seizure officer nor the officer-in-charge undertook the statutory procedure concerning inventory and sampling in the presence of a Magistrate.
    • The Trial Court itself had noted that the seizure officer could not even state whether an inventory list had been prepared at the time of the raid.
    • The Supreme Court consequently held that there had been a β€œcomplete and unexplained failure” to adhere to Section 52A.
    • Neither representative samples were drawn in the presence of a Magistrate nor was an inventory prepared and certified as contemplated by law.
    • According to the Court, these lapses went to the root of the prosecution case and rendered the integrity of the seizure and sampling process wholly doubtful.

    Section 52A Not Mandatory Per Se, But Cumulative Lapses Proved Fatal

    • Importantly, the Supreme Court did not hold that every breach of Section 52A automatically results in acquittal.
    • The Court expressly clarified that the procedure under Section 52A had not been considered mandatory by the Supreme Court.
    • However, in the present case, the failure to draw samples in accordance with Standing Order No. 1 of 1989, when considered together with the complete non-compliance with Section 52A, made the seizure and sampling procedure unreliable.
    • The Court went so far as to describe the cumulative procedure as a β€œtotal farce” and β€œunworthy of credence.”
    • This qualification is particularly important: the decision turns on the combined effect of multiple serious procedural defects, rather than laying down a rule of automatic acquittal for every Section 52A irregularity.

    FSL Report Loses Evidentiary Significance

    • The consequence of the defective sampling procedure was decisive.
    • The Supreme Court held that the FSL report lost significance because of the flawed manner in which samples had been collected, coupled with the total failure to comply with Section 52A.
    • It ultimately held that the FSL report could not be read in evidence. Once the forensic report was excluded, there was no acceptable evidence proving that the substance allegedly recovered from Nadeem was heroin within the meaning of the NDPS Act.

    Conviction Set Aside; Nadeem Ahamed Acquitted

    • The Supreme Court consequently set aside the impugned judgments and acquitted Nadeem Ahamed of the charges.
    • It directed that he be released from custody forthwith, unless his detention was required in any other case.
    • The appeals were accordingly allowed.

    Key Takeaway

    The ruling underscores two important safeguards in NDPS prosecutions.

    First, narcotics allegedly recovered separately from two accused cannot automatically be aggregated to reach commercial quantity merely because they were apprehended together. Where the prosecution relies on Section 29 conspiracy to combine the quantities, it must establish conspiracy through positive and tangible evidence rather than suspicion or conjecture.

    Second, although the Supreme Court did not treat Section 52A compliance as invariably mandatory in every case, serious and cumulative deficiencies in sampling, sealing, identification, inventory and Magistrate-supervised procedures can undermine the integrity of the alleged contraband itself.

    Where those deficiencies render the sampling process unreliable, even a positive FSL report may cease to provide a safe evidentiary foundation for conviction.

    Connected Matter

    Supreme Court Acquits Two in NDPS Case Over Broken Chain of Custody: Says FSL Report Cannot Survive Serious Gaps in Sample Integrity

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Supreme Court

    Disclaimer

    Handy Download:

    “Handy Order for Download”Download

    Write to us at office@aadrikaalaw.com

    Tel: +91-11-4999 2707

    www.aadrikaalaw.com

    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Gujarat HC Quashes Copyright FIR Over Alleged Counterfeit Apple Accessories; Says Trademark Dispute Cannot Be Camouflaged as Copyright Offence to Bypass Statutory Safeguards

    Gujarat HC Quashes Copyright FIR Over Alleged Counterfeit Apple Accessories; Says Trademark Dispute Cannot Be Camouflaged as Copyright Offence to Bypass Statutory Safeguards

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 18.09.2026

    Gujarat HC Quashes Copyright FIR Over Alleged Counterfeit Apple Accessories; Says Trademark Dispute Cannot Be Camouflaged as Copyright Offence to Bypass Statutory Safeguards

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    In an important ruling concerning the overlap between copyright and trademark enforcement in counterfeit-goods cases, the Gujarat High Court has quashed an FIR registered against a shopkeeper following the seizure of alleged counterfeit Apple-branded electronic accessories worth approximately β‚Ή15.11 lakh.

    Justice P. M. Raval held that commercial hardware such as AirPods, cables, power adapters and smartwatches does not, merely by being counterfeit or bearing a registered brand, constitute a literary or artistic work for the purpose of attracting criminal liability under Section 63 of the Copyright Act.

    The Court further held that the authorities could not subsequently sustain the case under the Trade Marks Act because the raid itself had been conducted without complying with the mandatory safeguards under Section 115(4)β€”including obtaining the prior opinion of the Registrar of Trade Marks and having the search and seizure conducted by an officer of the statutorily prescribed rank.

    FIR Registered Under Copyright Act Following Raid on Ahmedabad Shop

    • The petitioner, Jitendrabhai Mohanbhai Kriplani, approached the High Court under Section 482 CrPC seeking quashing of FIR C.R. No. 11191026220492 of 2022, registered on October 19, 2022 at Kalupur Police Station, Ahmedabad City.
    • The FIR invoked Sections 51, 63 and 64 of the Copyright Act, 1957.
    • The complainant was a manager of Griffin Intellectual Property Service Pvt. Ltd., which, according to the FIR, had been authorised by Apple Inc. to take legal action against persons allegedly infringing Apple’s rights or selling counterfeit iPhones, iPads, MacBooks, mobile phones and accessories.
    • Acting on information concerning alleged counterfeit Apple products being sold in shops in the Kalupur area, the complainant approached the police. A raid was subsequently conducted at β€œRaj Cover House”, where the petitioner was present.

    β‚Ή15.11 Lakh Worth of Alleged Counterfeit Apple Products Seized

    • According to the FIR, the authorities recovered several categories of allegedly counterfeit Apple-branded products, including AirPods, USB cables, power adapters, a smartwatch and different kinds of Apple-branded stickers and barcode/MRP labels.
    • The FIR placed the aggregate value of the seized items at β‚Ή15,11,193.
    • The key question before the High Court was whether allegations concerning the possession or sale of such duplicate commercial products could legally sustain criminal proceedings for copyright infringement.

    Petitioner: Counterfeit Hardware Is Not a Copyrightable β€œWork”

    • The petitioner argued that the seized goods did not fall within the categories of works protected under Section 13 of the Copyright Act.
    • His case was that AirPods, cables, adapters, smartwatches and similar electronic products were commercial articles rather than literary, dramatic, musical or artistic works.
    • Accordingly, the ingredients necessary for invoking Sections 63 and 64 of the Copyright Act were absent.
    • The petitioner further argued that if the allegation was actually one of misuse of Apple’s trademark on counterfeit goods, the case would fall under the Trade Marks Act, 1999, rather than being converted into a copyright prosecution.

    Gujarat HC: Commercial Hardware Is Not Literary or Artistic Work

    • The High Court accepted the central distinction advanced by the petitioner.
    • It held that copyright protection under Section 13 read with Section 2(c) is confined to protected categories of works, whereas hardware components, cables, power adapters and electronic devices are commercial industrial products.
    • The Court observed that misuse of a brand name or manufacture of duplicate hardware bearing a trademark would ordinarily constitute trademark falsification punishable under Sections 103 and 104 of the Trade Marks Act, rather than an offence under the Copyright Act.
    • It consequently held that mere possession or sale of counterfeit commercial goods or accessories bearing brand labels does not, by itself, satisfy the requirements of Sections 13 and 63 of the Copyright Act.

    FIR Failed to Identify Any Specific Copyrighted Literary or Artistic Work

    • The Court then examined whether the stickers, seals, packaging labels and other material allegedly recovered could independently support the copyright prosecution.
    • It noted that the FIR merely described the seized articles as goods infringing Apple’s copyright and bearing Apple’s trademark.
    • Crucially, however, the FIR did not identify any specific copyrighted literary workβ€”such as an instruction sheet or user manualβ€”or any specific artistic work such as an original graphical layout or packaging design whose copyright had allegedly been infringed.
    • The Court stressed that copyright is a statutory right, and an FIR invoking Section 63 must set out how the material allegedly infringed satisfies the statutory definition of a protected work under Sections 2 and 13.

    No User Manuals or Instruction Manuals Were Actually Seized

    • The complainant argued that product literature, packaging, labels and instruction manuals constituted original literary or artistic works belonging to Apple.
    • The High Court, however, examined the investigation papers and found that no instruction manual or user leaflet had actually been recovered or seized from the petitioner’s shop.
    • The Court said a new factual foundation could not be introduced during oral arguments when it was absent from the police recovery memo.
    • The recovery panchnama was also silent regarding any user or instruction manual. Photographs produced later through an affidavit-in-reply, which were not part of the investigation papers, could not be relied upon to cure that deficiency.

    MRP Tags and Barcodes Are Functional Data, Not Automatically Literary Works

    • The Court also addressed the argument that stickers, MRP labels and barcodes constituted literary works.
    • It held that an inclusive definition of β€œliterary work” cannot be stretched so far as to convert every commercial label or container into a literary work.
    • An MRP price tag, standard barcode or technical model sticker contains essentially functional and factual information, the Court observed, and cannot automatically be treated as an original literary work of authorship.
    • This distinction was central to the Court’s conclusion that the alleged counterfeit hardware and functional labels could not sustain the criminal copyright case as framed in the FIR.

    β€œCannot Camouflage a Trademark Dispute as a Copyright Offence”

    • One of the most significant observations in the judgment concerns attempts to invoke copyright law where the substance of the allegation is trademark counterfeiting.
    • The Court found that the primary allegation was the sale of counterfeit Apple hardware and accessories, a subject that fell within Sections 103 and 104 of the Trade Marks Act.
    • It held that the complainant could not camouflage a trademark dispute as a copyright offence in a manner that bypassed the procedural safeguards prescribed for trademark searches and seizures under Section 115 of the Trade Marks Act.

    Could the Case Continue Under the Trade Marks Act?

    • Having found Section 63 of the Copyright Act unsustainable, the High Court considered the respondents’ alternative submission.
    • The complainant and State argued that even if the Copyright Act provisions were incorrectly invoked, the allegations nevertheless disclosed offences under Sections 103 and 104 of the Trade Marks Act, 1999.
    • In other words, it was argued that incorrect labelling of the statutory provision in the FIR should not prevent the investigation from proceeding under the appropriate law.
    • The High Court rejected this argument because the Trade Marks Act contains its own mandatory safeguards governing search and seizure.

    Prior Opinion of Registrar Under Section 115(4) Is a Statutory Condition Precedent

    • Section 115(4) of the Trade Marks Act requires the police officer, before conducting search and seizure, to obtain the opinion of the Registrar on the facts involved in the offence relating to the trademark and abide by that opinion.
    • The High Court found from the FIR and police record that no prior written opinion had been sought or obtained from the Registrar of Trade Marks before the raid on Raj Cover House.
    • Justice Raval described this requirement as a β€œstatutory condition precedent” rather than a technical formality.
    • The Court viewed the safeguard as designed to prevent arbitrary police raids on commercial establishments at the instance of private corporate entities.
    • The Court consequently held that a search and seizure conducted in total defiance of Section 115(4) was vitiated.

    Raid Conducted by Officers Below Statutorily Required Rank

    • There was another fundamental procedural defect.
    • The Court noted that Section 115(4) provides that no police officer below the rank of Deputy Superintendent of Police or equivalent shall search and seize without warrant in such cases.
    • Although the initial application had been forwarded by the DCP Zone-03 to Kalupur Police Station, the actual raid, search and seizure were carried out under a Police Inspector along with head constables and police constables.
    • The High Court found these officers to be below the statutorily prescribed rank of DSP/ACP and consequently held that they lacked the requisite authority to conduct the search and seizure under the Trade Marks Act.

    Court Finds β€œColourable Exercise of Power”

    • The High Court went further and described the record as demonstrating a β€œclear pattern of colourable exercise of power.”
    • According to the Court, the complainant-company was aware that proceeding under the Trade Marks Act required the Registrar’s prior opinion and execution of the raid by an appropriately ranked police officer.
    • The Court found that what was essentially a trademark dispute had instead been presented as copyright infringement, thereby enabling an immediate raid through local police officers without satisfying those statutory safeguards.
    • The Court held that permitting the prosecution subsequently to fall back upon trademark charges would effectively sanction an evasion of the statutory mandate.
    • It reiterated that the FIR and seizure memo did not disclose recovery of original literary works or user manuals and that the controversy essentially concerned alleged falsification of a registered trademark on commercial accessories.

    Complainant’s Authority to Lodge FIR Was Upheld

    • Importantly, the High Court did not accept every contention raised by the petitioner.
    • The petitioner had challenged the complainant’s locus and authority to institute the proceedings.
    • On examining the authorisation documents, however, the Court found that authority had been given to the agency and, in turn, to its authorised person to lodge the FIR.
    • The petitioner’s objection regarding the complainant’s lack of locus was therefore rejected.
    • Thus, the FIR was not quashed because the complainant lacked authority. It was quashed because the Copyright Act provisions were found inapplicable to the allegations as framed and the statutory requirements necessary for a Trade Marks Act prosecution had not been followed.

    Gujarat HC Quashes FIR and All Consequential Proceedings

    • Summarising its conclusions, the Gujarat High Court held that the allegations did not satisfy the statutory ingredients of Sections 13 and 63 of the Copyright Act, since the commercial hardware in question did not constitute literary or artistic works for the purposes of the prosecution as framed.
    • It further held that Sections 103 and 104 of the Trade Marks Act could not simply be substituted to save the proceedings because the search, raid and seizure had been conducted in breach of Section 115(4)β€”both because the Registrar’s prior opinion had not been obtained and because the operation was carried out by officers below the prescribed rank.
    • Continuation of the proceedings, the Court concluded, would amount to an abuse of the process of Court and cause grave miscarriage of justice.
    • Accordingly, the High Court allowed Jitendrabhai Kriplani’s petition and quashed FIR C.R. No. 11191026220492 of 2022 dated October 19, 2022 and all consequential proceedings insofar as the petitioner was concerned.

    Why This Judgment Matters

    • The ruling draws an important boundary between copyright enforcement and trademark counterfeiting.
    • The judgment does not hold that counterfeit branded electronic goods are lawful. Rather, it holds that allegations of counterfeiting must be prosecuted under the correct statutory framework, and the procedural safeguards attached to that legislation cannot be avoided by characterising a trademark dispute as copyright infringement.
    • The decision is especially significant for intellectual-property enforcement agencies, brand-protection companies, police authorities, retailers and businesses because it stresses that the choice of statute directly affects the legality of search, seizure and prosecution.
    • Where the substance of an allegation concerns falsification of trademarks on commercial products, authorities cannot use the Copyright Act merely to circumvent the safeguards specifically prescribed by Section 115(4) of the Trade Marks Act.

    Key Takeaway

    Counterfeit commercial hardware bearing a registered brand does not automatically constitute copyright infringement. Where the allegations essentially concern trademark falsification, the Trade Marks Act must be followedβ€”including its mandatory search-and-seizure safeguards. A trademark dispute cannot be dressed up as a copyright case merely to bypass those statutory requirements.

    Connected Matter

    Punjab & Haryana HC: Trade Mark Search & Seizure Cannot Be Conducted by Officer Below DSP Rank

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Gujarat High Court

    Disclaimer

    Handy Download:

    “Handy Order for Download”Download

    Write to us at office@aadrikaalaw.com

    Tel: +91-11-4999 2707

    www.aadrikaalaw.com

    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • CESTAT Chennai: Refund Limitation Cannot Begin Before Final Assessment Order Is Communicated to Importer

    CESTAT Chennai: Refund Limitation Cannot Begin Before Final Assessment Order Is Communicated to Importer

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 18.09.2026

    CESTAT Chennai: Refund Limitation Cannot Begin Before Final Assessment Order Is Communicated to Importer

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    In an important ruling concerning the limitation period for Customs refunds arising from provisional assessments, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai has held that the one-year limitation under Section 27(1B)(c) of the Customs Act, 1962 must be reckoned from the date on which the order finalising the provisional assessment is communicated to the person entitled to claim the refund, and not merely from the date on which the order is passed.

    The Tribunal dismissed the Revenue’s appeal against Tamilnadu Newsprint and Papers Ltd. (TNPL) and upheld the Commissioner (Appeals)’ finding that TNPL’s refund claim was not time-barred.

    Background: β‚Ή75.50 Lakh Refund Arising From Provisional Assessment

    • TNPL had imported non-coking coal under Bill of Entry No. 3551653 dated October 17, 2013. The Bill of Entry was provisionally assessed because original documents and the test report were unavailable at the time of assessment.
    • After the relevant documents were produced, the Assistant Commissioner of Customs, Nagapattinam finalised the assessment through Order-in-Original No. 35/2014 dated April 30, 2014. The finalisation resulted in a finding that TNPL had paid excess Customs duty of β‚Ή75,50,539, which was ordered to be refunded.
    • TNPL subsequently filed its refund claim dated May 13, 2015, received by Customs on May 15, 2015. After the Department issued a deficiency memo, the claim was resubmitted on June 4, 2015 and received on June 9, 2015.

    Customs Department Rejected Refund as Time-Barred

    • The Department took the position that the limitation period had commenced on April 30, 2014, when the provisional assessment was finalised.
    • According to Customs, Section 27(1B)(c) specifically provides that where duty has been paid provisionally under Section 18, the one-year limitation period is computed from the date of adjustment of duty after final assessment.
    • On that reasoning, even TNPL’s original filing in May 2015 was beyond one year from April 30, 2014. The adjudicating authority therefore rejected the refund as time-barred by Order No. 37/2015 dated September 2, 2015.

    Commissioner (Appeals) Allowed TNPL’s Appeal

    • The Commissioner (Appeals), however, set aside the rejection.
    • It held that under Section 153 of the Customs Act, an order has to be communicated in the prescribed manner and that the relevant date for pursuing a remedial measure is the date on which the order is communicated to the affected person.
    • The appellate authority relied upon CESTAT’s decision in Indian Oil Corporation Ltd. v. Commissioner of Customs, 2014 (308) E.L.T. 169 (Tri.-Del.).
    • TNPL had also produced a postal cover bearing the postal authority’s seal and stamp as evidence regarding receipt of the finalisation order. The Department, on the other hand, could not establish an earlier date of communication. The Commissioner (Appeals) consequently directed the refund claim to be considered, prompting Revenue to approach CESTAT.

    Core Question Before CESTAT

    • The Tribunal identified the central issue as whether TNPL’s refund claim relating to duty paid provisionally under Section 18 was filed within the one-year limitation prescribed under Section 27(1B)(c).
    • The Department argued for a literal construction: the statute refers to the date of adjustment following final assessment and does not expressly use the word β€œcommunication.”
    • CESTAT, however, held that the provision could not be interpreted in isolation from the settled principles governing limitation where an affected person has to pursue a legal remedy.

    Limitation Cannot Begin Before Party Knows About the Order

    • The Tribunal placed significant reliance on the Supreme Court’s judgment in Collector of Central Excise, Madras v. M.M. Rubber & Co., 1991 (55) E.L.T. 289 (SC).
    • CESTAT explained that the Supreme Court had distinguished between two situations.
    • Where a statutory authority is required to exercise its own power within a prescribed period, limitation may run from the date the order is made because the authority cannot claim ignorance of its own action. But where limitation governs the right of an aggrieved person to pursue a remedy, actual or constructive knowledge of the order becomes essential.
    • Applying that principle, CESTAT observed that TNPL was not the author of the final assessment order. It was the person required to act upon that order to recover excess duty. It would therefore be incongruous for the limitation period to begin running even before the order was communicated to it.

    Gujarat High Court’s GAIL Ruling Followed

    • The Tribunal found substantial support in Principal Commissioner of Customs, Ahmedabad v. GAIL (India) Ltd., (2024) 20 Centax 516 (Guj.).
    • The Gujarat High Court had considered essentially the same question: whether the β€œdate of service” of an order finalising provisional assessment is relevant for calculating limitation under Section 27(1B)(c), despite the statutory language referring to adjustment of duty after final assessment.
    • The High Court decided the issue against Revenue and held that communication of the finalisation order to the assessee is a condition sine qua non for filing the refund claim within the prescribed period.
    • Importantly, CESTAT also noted the Gujarat High Court’s finding that mere uploading of an assessment order on the Department’s portal, without more, would not satisfy the requirement of communication.
    • CESTAT consequently held that the issue was no longer res integra.

    One-Year Period Runs From Communication of Final Assessment Order

    • The Chennai Bench crystallised the legal position in clear terms.
    • It held that the one-year limitation prescribed under Section 27(1B)(c), for refund of duty paid provisionally under Section 18, runs from the date on which the order finalising the assessment is communicated to the person entitled to the refund, rather than from the bare date on which the finalisation order is passed.
    • This distinction is significant for importers whose provisional assessments are finalised but where the resulting order is communicated after a delay.

    Mere Dispatch Is Not Enough; Customs Must Prove Service

    • CESTAT went further and examined what amounts to valid communication under Section 153 of the Customs Act.
    • The Tribunal held that the Department must demonstrate actual communication in accordance with the prescribed statutory mechanism. Mere assertion that an order was dispatched is insufficient.
    • It relied upon the Larger Bench ruling in Margra Industries Ltd. v. Commissioner of Customs, New Delhi, 2006 (202) E.L.T. 244 (Tri.-LB), which held that dispatch by post without proof of delivery does not constitute sufficient compliance where the special statute itself prescribes the manner of service.
    • The Bench also relied upon the Madras High Court’s decision in Schiller Healthcare India Pvt. Ltd. v. Assistant Commissioner of Customs, 2021-TIOL-1357-HC-MAD-CUS, where the Court dealt with the hierarchy of modes of service contemplated under Section 153.

    Burden of Proving Communication Lies on Revenue

    • Another important principle emerging from the ruling concerns the burden of proof.
    • Referring to its earlier ruling in Rane (Madras) Ltd. v. Commissioner of GST and Central Excise, Chennai South Commissionerate, along with the Chhattisgarh High Court’s decision in Vijay Pratap and the Supreme Court’s ruling in Saral Wire Craft Pvt. Ltd., the Tribunal held that the prescribed statutory method of service must be strictly followed.
    • CESTAT stated that the burden of proving that an order adversely affecting an assessee has been served through the prescribed method rests on Revenue.

    Section 153 Applies to Assessment Orders Too

    • Revenue could also not escape the communication requirement merely because the order in question finalised a provisional assessment rather than being an adjudication order in the conventional sense.
    • The Tribunal noted that Section 153 speaks of an β€œorder or decision” without restricting its operation to adjudication orders.
    • Further, provisional assessment falls within the definition of β€œassessment” under Section 2(2) of the Customs Act.
    • Relying upon Commissioner of Customs (Export), Mumbai v. Goodwill Sales Pvt. Ltd., 2016 (343) E.L.T. 1193 (Tri.-Mumbai), CESTAT observed that although assessment and adjudication are conceptually distinct, both constitute orders or decisions for purposes of the Customs Act.

    Revenue Failed to Prove Earlier Service

    • On the facts, the Department could not produce evidence demonstrating that the finalisation order had been dispatched to TNPL by registered post, speed post or another method contemplated under Section 153, much less evidence establishing delivery on an earlier date.
    • TNPL, in contrast, had produced the postal cover bearing the seal and stamp of the postal department.
    • The Department’s suggestion that the postal cover might have contained some other correspondence was rejected by the Tribunal as a bare surmise unsupported by evidence.

    Refund Claim Held Within Limitation

    • After adopting the date of communication as the relevant starting point, the Tribunal found TNPL’s refund claim to be within the statutory limitation.
    • The order records that, reckoned from the accepted date of communication, the one-year period expired on June 10, 2015. TNPL’s refund claim dated May 13, 2015 and received on May 15, 2015 was therefore within time.
    • Even its resubmission after curing the deficiencyβ€”made on June 4 and received by Customs on June 9, 2015β€”fell within the one-year period.

    Revenue’s Appeal Dismissed

    • CESTAT ultimately found no error in the Commissioner (Appeals)’ conclusion that TNPL’s refund claim was not barred by limitation.
    • Accordingly, the Tribunal dismissed the Revenue’s appeal and upheld Order-in-Appeal No. 91/16-TRY(CUS) dated April 5, 2016, with consequential relief in accordance with law. Thus, Tamilnadu Newsprint and Papers Ltd. succeeded before CESTAT on the limitation issue.

    Why the Ruling Matters for Importers

    The judgment has practical significance beyond TNPL’s individual refund claim. It reinforces that an importer cannot ordinarily be deprived of a statutory remedy by allowing limitation to run from an order that has not been properly communicated to it.

    The decision is particularly relevant in cases involving provisional assessment under Section 18, refund applications under Section 27, and disputes regarding service or communication under Section 153 of the Customs Act.

    The ruling also underscores a crucial evidentiary point for Customs proceedings: where Revenue relies on an earlier date of service to defeat a claim on limitation, the burden of establishing proper communication through the statutorily prescribed mode rests upon the Department.

    Connected Matter

    Gujarat High Court: Customs Refund Limitation Cannot Run Until Final Assessment Is Communicated to Importer; Mere ICEGATE Upload Not Enough

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: CESTAT Chennai

    Disclaimer

    Handy Download:

    “Handy Order for Download”Download

    Write to us at office@aadrikaalaw.com

    Tel: +91-11-4999 2707

    www.aadrikaalaw.com

    Ravi Shekhar Jha – Advocate, Bar Council of Delhi