Customs Authorities Can Issue Notices Even If a Trade Agreement Exists: Bombay HC Upholds SCN...

The Bombay High Court has upheld the authority of the Customs department to issue show-cause notices (SCNs) to importers for alleged violations, even when a trade agreement exists between the countries. The court affirmed that the existence of a trade pact, such as a Free Trade Agreement (FTA), does not strip the customs authorities of their statutory powers to investigate and take action against potential misuse of the agreement's provisions. The case involved importers who had claimed concessional duty benefits under a trade agreement but were suspected of violating its "rules of origin." The High Court ruled that the customs department is well within its rights to issue an SCN and demand proof of compliance. This judgment reinforces that trade agreements do not provide a blanket immunity from domestic customs laws and that importers must be prepared to substantiate their eligibility for any claimed benefits.