ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 12.07.2025
CESTAT Kolkata Upholds MEIS Benefits and Export Classification
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata Bench has set aside a customs duty demand of over βΉ29.62 crores imposed on M/s Aquapharm Chemical Limited, an EOU engaged in manufacturing water treatment chemicals. The tribunal ruled that the customs department had no jurisdiction to question the MEIS benefits without the Directorate General of Foreign Trade (DGFT) first cancelling the scrips.
Background of the Case
M/s Aquapharm, an Export Oriented Unit (EOU), had been exporting Organophosphorus compounds under the classification CTH 29319090 since 2006. The Directorate General of Foreign Trade (DGFT) had granted them MEIS (Merchandise Exports from India Scheme) scrips based on these exports between 2017 and 2021. However, the Directorate of Revenue Intelligence (DRI) initiated proceedings alleging that the products should have been classified as “Other Organo-phosphorus derivatives” under CTH 29313900, not eligible for MEIS.
A Show Cause Notice was issued, culminating in a massive customs duty demand under Sections 28 and 28AAA of the Customs Act, 1962, along with interest, penalties exceeding βΉ13.5 crores, and a redemption fine of βΉ5 crores.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
Source: CESTAT Kolkata
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