CESTAT Delhi- Shea Butter Ultra Refined Classified as Edible Grade and Eligible for Customs Duty Exemption

Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

Date: 11.06.2026

CESTAT Delhi- Shea Butter Ultra Refined Classified as Edible Grade and Eligible for Customs Duty Exemption

Ritika Pharmatech recently secured a significant win at the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, regarding the import of Shea Butter Ultra Refined. The case centered on the classification of the product and eligibility for a concessional customs duty rate under Indian law.

Background of the Case

Ritika Pharmatech imported a consignment of Shea Butter Ultra Refined, classifying it under Customs Tariff heading 1515 9091, which covers “other fixed vegetable fats and oils (including jojoba oil) and their fractions, whether or not refined, but not chemically modified – Other, edible grade.” The company claimed an exemption under Notification No. 12/2012 (Sl. No. 58), which allows a reduced basic customs duty rate of 10% for “all goods, refined and edible grade” under this heading.

Customs Department’s Objection

Upon examination, customs authorities questioned whether the product qualified for the exemption, as the Shea Butter was intended for use in the cosmetic industry. The Food Safety and Standards Authority of India (FSSAI) clarified that certification was not required since the product was not meant for human consumption. Based on this, customs denied the concessional rate, applying the full basic customs duty of 100% instead.

Ritika Pharmatech’s Arguments

The company argued that:

1. Correct Classification: The Shea Butter Ultra Refined was correctly classified under heading 1515 9091 as an edible grade product.
2. Supplier Certification: The supplier certified the product as edible grade, refined, and processed in a food-grade facility under European food law.
3. No End-Use Condition: Notification No. 12/2012 does not impose any end-use restriction; it only requires the product to be refined and edible grade.
4. Industry Usage: While Shea Butter is used in cosmetics, it is also widely used as a cocoa butter substitute in food products, especially in West Africa and the chocolate industry.

Tribunal’s Findings

The CESTAT bench found in favor of Ritika Pharmatech, noting:

• The product was correctly classified as edible grade under the relevant customs heading.
• The supplier’s certification and documentation supported the claim that the product was refined and edible grade.
• The customs department did not conduct any independent testing to dispute the edible grade status.
• The exemption notification does not require the product to be used for human consumption, only that it is of refined and edible grade.
• The denial of FSSAI certification was based solely on end-use, not on the product’s intrinsic qualities.

Final Order

The tribunal set aside the customs department’s order, granting Ritika Pharmatech the benefit of the concessional 10% customs duty rate under Notification No. 12/2012 for their Shea Butter Ultra Refined import.

Key Takeaways for Importers

1. Product Classification Matters: Accurate classification and supporting documentation are crucial for claiming exemptions.
2. Supplier Certification: Certificates from suppliers regarding product grade and processing can be decisive.
3. Notification Conditions: Exemption notifications must be interpreted strictly as written; additional conditions cannot be imposed by authorities.
4. End-Use Restrictions: Unless specifically stated, end-use is not a valid ground for denying exemptions if product conditions are met.

Conclusion

This case sets an important precedent for importers of refined and edible grade products, clarifying that end-use in non-food industries does not automatically disqualify them from customs duty exemptions, provided all notification conditions are satisfied.

Connected Matter

CESTAT Mumbai Upheld Customs Duty Exemption on Imported Edible Grade Oils

Source: CESTAT Delhi

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