Court Rules Cause of Action Arising in Noida, Not Delhi; Issues of Classification and Certification to Be Decided by Commissioner of Customs, Noida
In a significant decision dated October 14, 2026, a Division Bench of the Delhi High Court comprising Justices Avneesh Jhingan and Shail Jain dismissed a writ petition filed by Swastik Overseas and others challenging the seizure and detention of imported stainless steel coils at the Inland Container Depot (ICD), Dadri, Uttar Pradesh. The petitioners had sought quashing of seizure memos, release or provisional release of the goods, and directions restraining the authorities from relying on a Chartered Engineer's certificate for classification purposes.
The seized goods, imported from China, were detained by authorities at ICD Dadri on the ground that they were wrongly classified under Customs Tariff Heading (CTH) 73269060 and required Bureau of Indian Standards (BIS) certification under IS 6911, as mandated by the Steel Control Order issued by the Union Steel Ministry. The petitioners contended that the detention contravened CBIC policy and that similar goods had been cleared at other ICDs.
The petitioners argued that since the all-India headquarters of the Customs Commissionerate and Directorate of Revenue Intelligence (DRI) are located in Delhi, the Delhi High Court had territorial jurisdiction. They also relied on precedents including the Full Bench decision in Sterling Agro Industries Ltd. v. Union of India and a Supreme Court ruling in Bakshish Ahmad v. Union of India to support their claim.
However, the Court held that the entire cause of action arose exclusively at ICD Dadri under the jurisdiction of the Commissioner of Customs, Noida, and that no part of the cause of action occurred within the territorial jurisdiction of the Delhi High Court. The court emphasized that mere location of CBIC or DRI headquarters in Delhi does not confer jurisdiction on this Court in matters where the seizure and related proceedings are pending outside Delhi.
The Court relied on its earlier Division Bench ruling in M/s Meever India Private Limited v. Union of India, which clarified that challenges to orders relating to business activities outside Delhi cannot be entertained by the Delhi High Court if no cause of action arises within its territorial limits. It distinguished the Supreme Court's decision in Bakshish Ahmad, noting that it involved forum non-conveniens and not lack of territorial jurisdiction.
Further, the Court observed that the issues regarding classification of goods, reliance on Chartered Engineer certificates, and necessity of BIS certification are substantive matters to be decided by the Commissioner of Customs, Noida, and cannot be adjudicated by the Delhi High Court in the absence of jurisdiction.
The Full Bench decision in Sterling Agro Industries Ltd., which held that even a minuscule part of the cause of action arising within the jurisdiction can confer territorial jurisdiction, was distinguished as the present case involved a complete lack of territorial connection with Delhi.
Consequently, the Court dismissed the writ petition for lack of territorial jurisdiction and clarified that the petitioners remain free to avail remedies before the appropriate forum in accordance with law.
This ruling reaffirms the principle that territorial jurisdiction is determined by the locus of the cause of action and not by the location of the headquarters of regulatory authorities. It also underscores the importance of filing challenges related to customs seizures before the designated authorities and courts within whose territorial jurisdiction the seizure has occurred.
Bottom Line:
Writ petition challenging seizure/detention of imported goods at ICD, Dadri, Uttar Pradesh and seeking release/provisional release thereof is not maintainable before Delhi High Court merely because CBIC/DRI headquarters are situated in Delhi or policy/circular issues are raised - where goods were seized at Dadri and proceedings were pending before Commissioner of Customs, Noida, no part of cause of action arose within territorial jurisdiction of Delhi High Court - petition dismissed for lack of territorial jurisdiction.
Statutory provision(s):
Constitution of India, 1950 Article 226, Customs Tariff Act (for classification), Steel Control Order under Union Steel Ministry, CBIC policies and guidelines on Chartered Engineer certificates and BIS certification
Swastik Overseas v. Union of India, (Delhi)(DB) : Law Finder Doc Id # 2999571
