S. Santhosh Kumar Vs Union of India & Ors. (Madras High Court)
Summary: The Madras High Court dismissed a public interest litigation filed by S. Santhosh Kumar seeking restrictions on imports under the Duty Free Import Authorisation (DFIA) Scheme, investigation of customs officers and importers allegedly violating actual-user conditions and value caps, and a declaration restricting the jurisdiction of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) to interpret the Foreign Trade Policy (FTP). The petitioner alleged that importers were obtaining duty-free clearances without complying with restrictions introduced through DGFT Public Notice No.41 dated 2 November 2016, which amended certain Standard Input Output Norms (SION) applicable to food products. He referred to two CESTAT decisions, namely Frunuts Exim LLP, Final Order No.85184/2026 dated 27 January 2026, concerning dried cranberries, and Global Exim, Final Order No.75721/2026 dated 18 June 2026, concerning citric acid. Both decisions permitted duty-free imports on the ground that value caps and actual-user restrictions imposed merely through a public notice could not justify denial of customs exemption. The Tribunal decisions had relied upon the Supreme Court’s ruling in Viraj Impex Pvt. Ltd. v. Union of India, 2026 INSC 80, and decisions of the Bombay and Rajasthan High Courts. The petitioner also contended that exporters using DFIA were improperly claiming benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme, although DGFT Notification No.70/2023 extended benefits to Advance Authorisation holders, Export Oriented Units and Special Economic Zone units without specifically mentioning DFIA.
The Division Bench of Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan held that the petition lacked the factual foundation necessary for entertaining a public interest litigation. The petitioner had admittedly relied upon internet reports without identifying any importer, bill of entry, specific instance of unlawful clearance or amount of revenue loss. No representation had been made to the authorities, and the Tribunal decisions relied upon arose from proceedings in Mumbai and Kolkata rather than Chennai. The Court observed that a writ of mandamus requires an identifiable legal duty and cannot compel customs authorities to enforce restrictions whose legal validity is itself doubtful. If the Central Government or DGFT considers actual-user conditions and value caps necessary for revenue protection, it may issue an appropriate notification through the prescribed legal process; however, the Court cannot direct the executive to formulate such policy. The demand for proceedings against unnamed customs officers and issuance of show-cause notices to all importers was also rejected because customs duty exemption and recovery proceedings must operate under the applicable statutory framework, based on particular persons and ascertainable facts.
On the question of CESTAT’s jurisdiction, the High Court held that the Tribunal’s decisions were judicial orders passed in appeals under Section 129A of the Customs Act, 1962. While deciding eligibility for customs exemptions, CESTAT necessarily had to interpret the Foreign Trade Policy. The Revenue, being a party to those appeals, could pursue the statutory appellate remedies provided under Chapter XV of the Customs Act if aggrieved. A stranger to those proceedings could not challenge the orders through a public interest petition when the Union of India itself had not expressed dissatisfaction. Importantly, the Court clarified that Paragraph 2.58 of the FTP, which treats DGFT’s interpretation as final, is a policy provision and cannot divest CESTAT of jurisdiction conferred by Parliament. The High Court therefore refused to declare that CESTAT lacked authority to interpret the FTP, dismissed the writ petition without costs and closed the connected miscellaneous petition. The Court did not independently adjudicate the eligibility of particular DFIA exporters for RoDTEP benefits.
Cases Discussed
- Frunuts Exim LLP v. Commissioner of Customs — CESTAT Mumbai, Final Order No.85184/2026, dated 27 January 2026. The Tribunal allowed duty-free import of dried cranberries under DFIA, holding that restrictions concerning value caps and actual use introduced merely through a public notice could not be invoked to deny the claimed exemption. The Madras High Court referred to this order while considering the petitioner’s challenge to CESTAT’s jurisdiction.
- Global Exim v. Commissioner of Customs — CESTAT Kolkata, Final Order No.75721/2026, dated 18 June 2026. The Tribunal allowed duty-free import of citric acid, adopting the position that value caps and actual-user restrictions introduced through a public notice could not independently defeat the exemption. The High Court treated this as a judicial order subject to statutory appellate remedies.
- Viraj Impex Pvt. Ltd. v. Union of India & Anr. — Supreme Court of India, 2026 INSC 80, decided 21 January 2026. The Supreme Court held that a notification issued under the Foreign Trade (Development and Regulation) Act, 1992 acquires enforceability only upon its publication in the Official Gazette in the prescribed manner. The present judgment records that the two CESTAT Benches relied upon this decision when dealing with conditions imposed through a public notice. The High Court did not reconsider or reverse the Supreme Court’s ruling.
FULL TEXT OF THE ORDER OF MADRAS HIGH COURT
A 26-year-old Chennai resident has filed this public interest petition seeking orders to curb imports under the Duty Free Import Authorisation (DFIA) scheme. The petitioner seeks a further direction to the customs authorities to verify compliance with actual user conditions and value caps prior to granting duty-free clearances. Additionally, the petition seeks this court to declare that rulings by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) do not bind the Directorate General of Foreign Trade (DGFT) on policy matters, and to confirm that the DGFT, rather than the Remission of Duties and Taxes on Export Products (RoDTEP) Committee, retains sole authority over exporter eligibility under the RoDTEP scheme.
2.1. The case in brief is that DFIA is a post-export scheme under Chapter 4 of the Foreign Trade Policy (“FTP”). It is issued for products for which Standard Input Output Norms (“SION”) are notified. The authorisation is transferable. The holder can import inputs duty free.
2.2. By Public Notice No.41 dated 02.11.2016, the Director General of Foreign Trade (“DGFT”) amended the SION for certain food products. The said notice added value caps for some inputs and an actual user condition for others. It is pleaded that importers ignore these conditions, as such conditions cannot be imposed by a public notice and can be imposed only by a notification in the Official Gazette.
2.3. The petitioner relies on two orders of the Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”). In Frunuts Exim LLP, Final Order No.85184/2026, dated 27.01.2026, the Mumbai Bench allowed duty free import of dried cranberries. In Global Exim, Final Order No.75721/2026, dated 18.06.2026, the Kolkata Bench allowed duty free import of citric acid. Both Benches held that the value cap and the actual user condition, imposed only by public notice, could not be used to deny the exemption. They relied on a decision of the Supreme Court in Viraj Impex Pvt. Ltd. v. Union of India1, and on decisions of the Bombay and Rajasthan High Courts.
2.4. The second grievance aired by the petitioner concerns the RoDTEP. Notification No.70/2023 extended RoDTEP to exports by Advance Authorisation holders, Export Oriented Units (EOUs) and Special Economic Zone (SEZ) units. It did not mention DFIA. The petitioner asserts that DFIA exporters still claim RoDTEP and so get a double benefit. He points out that, on a reference, the DGFT informed the Central Board of Indirect Taxes and Customs (“CBIC”) that DFIA exports are not eligible for RoDTEP. CBIC passed this on to its field officers by letter F.No.CBIC-140602/4/2026-DBK-CBIC, dated 07.09.2026.
2.5. In this backdrop, the present writ petition is filed for the reliefs, referred to supra.
3. Learned counsel for the petitioner relied on Sections 9 and 19 of the Foreign Trade (Development and Regulation) Act, 1992 (“the FTDR Act”) and on Paragraphs 1.03, 2.04 and 2.58 of the FTP. She argued that the DGFT can lay down procedures, including value caps and actual user conditions, and that its decision on policy is final.
4. A public interest litigation is meant for those who cannot reach the Court themselves. It is not a tool for settling policy or for reopening decisions of other forums. The Court must be satisfied that the petitioner is acting in good faith, that the facts are pleaded with care, and that the relief sought is one the Court can properly grant.
5. The present petition does not meet the aforesaid standard. The petitioner’s own affidavit says he learnt of the alleged misuse from reports on the internet. He did not mention the name of any importer, nor any bill of entry is cited, or the amount of alleged loss is stated. The statement that there are “regular imports” at the Port of Chennai is not backed by a single instance. He admits that he made no representation to any respondent. The two Tribunal orders he relies on arose at Mumbai and Kolkata, not at Chennai.
6. A writ of mandamus needs a clear legal duty. We cannot direct officers to enforce a condition whose legal force is itself in serious doubt. If the Central Government or the DGFT is of the opinion that such conditions are needed to protect revenue, the remedy is simple. They can issue the proper notification. Whether to do so or not is a matter of policy. This Court cannot direct the executive to frame it.
7. The prayer for an inquiry against officers is also unsustainable. No officer is named in the petition. The prayer for show cause notices to “all importers” is much wider. Recovery of duty is governed by the Customs Act, 1962. It needs a notice to a particular person, on particular facts, by the proper officer. A roving inquiry against unnamed persons cannot be ordered in a public interest petition.
8. The orders passed by the Tribunal orders are judicial orders. They were passed on appeals under Section 129A of the Customs Act, in cases where the question was whether a customs exemption was available. In deciding that question, the Tribunal had to read the FTP. The Revenue was a party before the Tribunal. If it felt aggrieved, Chapter XV of the Customs Act gave it a remedy by way of appeal. The Union of India is the first respondent here. It has not said it is aggrieved by those orders. The petitioner, who is a stranger, cannot do what the Union of India does not chose to do.
9. The importers in the cases before the Tribunal, referred to supra, are not before us. A declaration that CESTAT can never interpret the FTP is far too wide. The Tribunals have jurisdiction under the Customs Act. Paragraph 2.58 of the FTP, which makes the DGFT’s interpretation final, is a policy provision. It cannot take away a jurisdiction that Parliament has given.
For the aforesaid reasons, the writ petition is dismissed. There is no order as to costs. Connected W.M.P.No.51214 of 2026 is closed.
Notes:
1 2026 INSC 80
