ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 16.09.2025
CESTAT Delhi- Customs authorities cannot deny duty exemptions when export obligations are certified as fulfilled by the DGFT โ โ
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
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The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, recently delivered a significant judgment in the case of Svam Toyal Packaging Industries Pvt. โ Ltd. vs. Principal Commissioner of Customs (Import), ICD, Tughlakabad, New Delhi. โ This case, which revolved around the classification of imported goods under the Advance Authorization Scheme, has far-reaching implications for importers and exporters operating under similar schemes. โ
Background of the Case โ
Svam Toyal Packaging Industries Pvt. โ Ltd., a manufacturer and exporter of aluminum foils used in pharmaceutical packaging, had obtained eight Advance Authorizations (AAs) from the Directorate General of Foreign Trade (DGFT). โ These authorizations allowed duty-free import of raw materials, including aluminum foil (50 MIC ยฑ 10%), under the condition that the company fulfilled its export obligations. โ
The dispute arose when the Customs Department alleged that the imported goods were misclassified under Customs Tariff Heading (CTH) 7607 19 91 instead of CTH 7607 11 90. โ The department argued that this misclassification rendered the imports ineligible for duty exemption under Notification No. โ 18/2015-Cus. Consequently, a demand for differential customs duty of โน21.43 crore, along with interest and a penalty of โน50 lakh, was raised.
Source: CESTAT Delhi
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