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Category: CESTAT

  • CESTAT Delhi Clarifies Customs Classification of Blood Glucose Meters

    CESTAT Delhi Clarifies Customs Classification of Blood Glucose Meters

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

    Date: 18.05.2026

    CESTAT Delhi Clarifies Customs Classification of Blood Glucose Meters

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    Blood glucose meters, commonly known as glucometers, are essential medical devices used for monitoring blood sugar levels. The classification of these devices under Indian customs law has significant implications for import duty and tax exemptions. A recent order by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in New Delhi has clarified the correct classification and duty assessment for these instruments, impacting importers and the healthcare industry.

    Background of the Case

    Aspen Diagnostics Pvt Ltd, a company specializing in laboratory and patient care equipment, imported blood glucose meters, urine analyzers, and other diagnostic devices between September 2020 and December 2021. The company classified these goods under Customs Tariff Item (CTI) 9027 80 90, which allowed them to claim a nil rate of basic customs duty under Notification No.24/2005-cus. They also paid Integrated Goods and Service Tax (IGST) at rates specified in relevant notifications:

    • Glucometers: 12% IGST
    • Other diagnostic goods: 18% IGST

    Dispute and Arguments

    The customs authorities challenged Aspen Diagnostics’ classification, arguing that blood glucose meters should be classified under CTI 9018 90 99, which covers medical diagnostic instruments. This reclassification would result in higher duties and penalties. Aspen Diagnostics contested this, citing previous tribunal decisions, particularly the Bayer Pharmaceuticals Pvt. Ltd. case, which classified glucometers under CTI 9027 80 90 as instruments for chemical analysis.

    Tribunal’s Analysis and Ruling

    The tribunal examined the competing tariff headings:

    1. Heading 9027: Instruments and apparatus for physical or chemical analysis (e.g., spectrometers, gas analysis apparatus).
    2. Heading 9018: Instruments and appliances used in medical, surgical, dental, or veterinary sciences.

    Key points from the tribunal’s reasoning:

    • The essential function of a glucometer is to draw blood and analyze it for glucose content, which constitutes chemical analysis.
    • Glucometers are widely used by individuals at home, not just by medical professionals, making them distinct from devices covered under Heading 9018.
    • The Harmonized System of Nomenclature (HSN) Explanatory Notes support classification under Heading 9027 for instruments used in laboratories or for chemical analysis.
    • Previous decisions (Bayer Pharmaceuticals and Abbott Healthcare) and affirmation by the Supreme Court reinforce this classification.

    Outcome and Implications

    The tribunal set aside the customs authority’s order, confirming that blood glucose meters are to be classified under CTI 9027 80 90. This classification entitles importers to duty exemptions under Notification No.24/2005-cus, reducing costs and supporting wider access to these essential devices.

    Practical Impact

    • Importers: Can continue to classify glucometers under CTI 9027 80 90 and claim duty exemptions.
    • Healthcare Providers: Benefit from lower costs and easier access to diagnostic devices.
    • Regulatory Clarity: The decision provides clear guidance for future imports and customs assessments.

    Conclusion

    The CESTAT Delhi order is a landmark decision for the classification of blood glucose meters and similar diagnostic instruments. By affirming their status as instruments for chemical analysis, the tribunal has ensured favorable duty treatment and regulatory clarity for importers and the healthcare sector.

    Source: CESTAT Delhi

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  • CESTAT Ahmedabad Ruled on Retrospective Exemption: Setting Aside Customs Duty and Penalties in Advance Authorization Imports

    CESTAT Ahmedabad Ruled on Retrospective Exemption: Setting Aside Customs Duty and Penalties in Advance Authorization Imports

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

    Date: 18.05.2026

    CESTAT Ahmedabad Ruled on Retrospective Exemption: Setting Aside Customs Duty and Penalties in Advance Authorization Imports

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Ahmedabad recently delivered a significant order concerning customs duty disputes involving Ratnaveer Stainless Products Pvt Ltd and related parties. The case centered on the eligibility for exemption from Countervailing Duty (CVD) under advance authorization during a specific period in 2017, following changes in government notifications.

    Background of the Case

    1. Parties Involved:
      • Ratnaveer Stainless Products Pvt Ltd (Importer)
      • Shri Vijay R Sanghvi (Director)
      • Shri Aranamkotte Madhavan Rajan (Director of CHA firm M/s. Suraj Forwarders Pvt Ltd)
      • Commissioner of Customs, Ahmedabad (Respondent)
    2. Nature of Imports:
      • Hot/Cold Rolled Stainless Steel flat products imported from China under Chapter 72 of the Customs Tariff Act, 1975.
    3. Period in Question:
      • 07.09.2017 to 12.10.2017, when CVD was imposed via Notification 01/2017-Cus. (CVD).

    Dispute and Investigation

    • The Directorate of Revenue Intelligence (DRI) alleged that importers wrongly claimed exemption from CVD under advance authorization, which was not available during the specified period.
    • Show cause notices were issued demanding CVD, interest, and penalties, and proposing confiscation of goods.
    • The Commissioner adjudicated, confirming the demand and imposing penalties, but did not levy redemption fine as goods were not physically available.

    Key Legal Arguments by Appellants

    1. Advance Authorization Validity:
      • Appellants argued that their advance authorizations were valid and that clearances were permitted by customs authorities against executed bonds.
    2. Notification Changes:
      • Notification No. 79/2017-Cus dated 13.10.2017 amended the earlier notification to include CVD in the list of exempt duties, using the term “substitution,” which appellants argued should apply retrospectively.
    3. Government Policy:
      • Central Government policy aims not to tax exports, either by refunding duties or exempting them at import.
    4. Legal Precedents:
      • Appellants cited Supreme Court and High Court decisions supporting retrospective application of exemption notifications and the principle that duties should not be levied on exports.
    5. No Prohibition or Intent to Evade:
      • Appellants contended there was no prohibition or intent to evade duty, and penalties were unjustified.

    Tribunal’s Findings and Decision

    • The Tribunal referenced the CESTAT Allahabad decision in Vishal Metal Industries, which held that exemption notifications should be applied retrospectively and that importers are entitled to refunds of CVD paid during the disputed period.
    • Multiple High Court judgments were cited, confirming the retrospective applicability of Notification No. 79/2017-Cus and supporting refund claims for CVD.
    • The Tribunal found the issue to be settled (no longer res-integra) and allowed all appeals, setting aside the impugned order, including demands and penalties.

    Implications

    1. Retrospective Exemption:
      • Importers who paid CVD during 07.09.2017 to 12.10.2017 under advance authorization are entitled to refunds, as the exemption notification is deemed retrospective.
    2. No Penalties:
      • Penalties imposed on directors and CHA were set aside, recognizing the bona fide nature of the dispute and lack of intent to evade duty.
    3. Policy Clarity:
      • The order reinforces the principle that export-oriented imports under advance authorization should not be burdened with duties, aligning with government policy.

    Conclusion

    The CESTAT Ahmedabad’s order provides clarity and relief to importers affected by the brief period of CVD imposition on advance authorization imports. It underscores the importance of retrospective application of exemption notifications and affirms the government’s commitment to facilitating exports by exempting duties on inputs used for export production.

    Source: CESTAT Ahmedabad

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  • CESTAT Mumbai Upholds JSW Steel’s Right to Refund and Interest on Extra Duty Deposit

    CESTAT Mumbai Upholds JSW Steel’s Right to Refund and Interest on Extra Duty Deposit

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

    Date: 16.05.2026

    CESTAT Mumbai Upholds JSW Steel’s Right to Refund and Interest on Extra Duty Deposit

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai recently delivered a significant judgment in the case involving JSW Steel Limited and the Commissioner of Customs, Goa. The dispute centered on the refund of Extra Duty Deposit (EDD) paid during provisional assessments for imported coal, and the entitlement to interest on delayed refunds. This article provides a comprehensive overview of the case, its legal context, and the implications for importers and customs authorities.

    Background of the Case

    1. Parties Involved:
      • Appellant: Commissioner of Customs, Goa
      • Respondent: JSW Steel Limited, Mumbai
    2. Nature of Imports:
      • JSW Steel imported various grades of coal from its related overseas supplier, JSW International Tradecorp Pte. Ltd., Singapore.
      • 42 consignments were imported during 2014-2016, assessed provisionally due to the related party nature and pending valuation investigation by the Special Valuation Branch (SVB).
    3. Provisional Assessment & EDD:
      • Provisional assessments were made under Section 18 of the Customs Act, 1962, requiring JSW Steel to pay 1% of the declared assessable value as EDD, as per CBEC Circular No. 11/2001.
      • EDD is a deposit collected to ensure timely submission of documents for SVB investigation, not a duty per se.

    Legal Issues and Tribunal Findings

    1. Finalization of Provisional Assessments

    • SVB, Mumbai, after detailed investigation, accepted the declared transaction value, confirming no influence of relationship on pricing.
    • All pending provisional assessments were ordered to be finalized, and EDD was deemed refundable.

    2. Refund Application and Delay

    • JSW Steel filed a refund claim for EDD on 23.03.2016, received by Customs on 30.03.2016.
    • The refund was initially denied due to alleged incomplete finalization of Bills of Entry (B/Es) and missing documents.
    • JSW Steel refuted this, citing SVB’s order and CBEC instructions, and refiled the application as requested.
    • Refund of Rs. 21,17,32,793 was sanctioned on 27.07.2017, but no interest was paid for the delay.

    3. Entitlement to Interest on Delayed Refund

    • The Tribunal examined whether JSW Steel was entitled to interest under Section 27A of the Customs Act for the period of delay.
    • It was held that:
      • EDD is a deposit, not a duty, but its refund is governed by Section 18 and Section 27A.
      • Interest is payable if refund is not made within three months from the date of receipt of a complete application.
      • The delay was attributable to the department, not the importer, as all documents were submitted and SVB order had attained finality.

    4. Relevant Legal Provisions and Precedents

    • Customs Act, 1962: Sections 2(2), 14, 17, 18, 27, 27A.
    • CBEC Circulars: Emphasize expeditious finalization of provisional assessments and refund processing.
    • Case Law:
      • Ranbaxy Laboratories Ltd. v. Union of India (SC): Interest on refund is automatic after three months from application.
      • Dalmia Cement (Madras HC): EDD refund must be made with interest; delay is not justified.
      • Bihar Foundry & Castings Ltd. (Jharkhand HC): Provisional assessments must be finalized within six months.

    Key Takeaways for Importers and Customs Authorities

    1. EDD is Refundable:
      • EDD collected during SVB investigation is refundable once the transaction value is accepted and provisional assessments are finalized.
    2. Interest on Delayed Refund:
      • If refund is not processed within three months of a complete application, interest at the rate prescribed by the government (typically 6% per annum) is payable.
    3. Departmental Responsibility:
      • Customs authorities must finalize provisional assessments and process refunds expeditiously, as per CBEC instructions and legal mandates.
    4. No Unjust Enrichment:
      • Importers must demonstrate that the refund does not result in unjust enrichment, typically via a Chartered Accountant’s certificate.

    Implications of the Tribunal’s Decision

    • The Tribunal’s order reinforces the rights of importers to timely refunds and interest, holding customs authorities accountable for delays.
    • It clarifies the distinction between EDD and customs duty, and the legal framework for refund and interest claims.
    • The decision sets a precedent for similar cases involving provisional assessments, SVB investigations, and related party transactions.

    Conclusion

    The CESTAT Mumbai’s decision in favor of JSW Steel Limited marks a significant development in customs law, ensuring that importers are not penalized for departmental delays in finalizing provisional assessments and processing refunds. The case underscores the importance of compliance with statutory timelines and CBEC instructions, and provides clear guidance on the entitlement to interest for delayed refunds of EDD.

    Source: CESTAT Mumbai

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  • CESTAT Delhi- Technical Assistance and License Fees Not Includible in Customs Valuation of Imported Machinery

    CESTAT Delhi- Technical Assistance and License Fees Not Includible in Customs Valuation of Imported Machinery

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

    Date: 16.05.2026

    CESTAT Delhi- Technical Assistance and License Fees Not Includible in Customs Valuation of Imported Machinery

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in New Delhi recently decided a significant case involving Aglow Chemical Pvt. Ltd. and the Commissioner of Customs. The dispute centered on whether technical assistance charges, license fees, and engineering services should be included in the assessable value of imported plant and machinery under Indian customs law.

    Background of the Case

    1. Import Details:
      • Aglow Chemical Pvt. Ltd. imported plant and machinery from Cimprogetti Srl, Italy, declaring an assessable value of EUR 1,26,000 based on the invoice for equipment.
      • The total contract with the supplier was EUR 4,20,000, which included EUR 2,94,000 for license, engineering package, and technical assistance.
    2. Customs Department’s Position:
      • The Department argued that the entire contract value (EUR 4,20,000) should be considered for customs duty, as the machinery was incomplete and commercially unusable without the associated technical know-how and assistance.
      • They claimed that splitting invoices did not alter the true transaction value and that all payments were inextricably linked to the imported goods.
    3. Appellant’s Argument:
      • Aglow Chemical contended that the charges for technical assistance and license fees were independent of the imported equipment and not a condition of sale.
      • They relied on several Supreme Court decisions, asserting that only the value of the imported equipment should be considered for customs purposes.

    Legal Analysis

    Key Issues Examined

    • Composite vs. Segregated Contracts:
      • The Tribunal examined whether the supply of technical know-how and engineering services was a condition precedent for the sale of equipment.
      • The contract had two distinct parts: one for technical assistance and license fees, and another for the supply of key components.
    • Relevant Legal Precedents:
      • The Tribunal referenced Supreme Court judgments, including Tata Iron and Steel Co. Ltd., Essar Steel Ltd., and Steel Authority of India Ltd., which clarified that charges for post-importation activities or separately contracted services are not to be included in the assessable value unless they are a condition of sale.
    • Customs Valuation Rules:
      • Rule 10(1)(c) of the Customs Valuation Rules states that royalties and license fees are only added to the transaction value if they are a condition of sale.
      • The Tribunal found no evidence in the contract that technical services were a prerequisite for purchasing the equipment.

    Tribunal’s Findings

    1. No Binding Obligation:
      • There was no contractual obligation requiring the buyer to purchase technical services as a precondition for buying the equipment.
      • The technical assistance and license fees were not directly related to the sale of the imported goods.
    2. Segregation of Charges:
      • The contract and invoices clearly segregated the charges for equipment and technical services.
      • The Tribunal held that only the value of the imported equipment (EUR 1,26,000) should be considered for customs duty.
    3. Setting Aside Department’s Order:
      • The Tribunal set aside the order of the customs authorities, allowing the appeal and ruling that the additional charges for technical assistance and license fees were not includible in the assessable value.

    Implications for Importers

    • Clarity in Contracts:
      • Importers should ensure contracts clearly distinguish between the value of goods and any associated services or technical assistance.
    • Customs Valuation:
      • Only charges that are a condition of sale for the imported goods are includible in the assessable value for customs purposes.
    • Legal Precedents:
      • The case reinforces established Supreme Court principles, providing guidance for similar disputes.

    Conclusion

    The CESTAT decision in favor of Aglow Chemical Pvt. Ltd. underscores the importance of contract clarity and the legal distinction between goods and services in customs valuation. Importers can rely on this precedent to exclude separately contracted technical assistance and license fees from the assessable value, provided they are not a condition of sale.

    Source: CESTAT Delhi

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  • CESTAT Allahabad Decision on Certificates of Origin, Customs Valuation, and Electronic Evidence Admissibility

    CESTAT Allahabad Decision on Certificates of Origin, Customs Valuation, and Electronic Evidence Admissibility

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

    Date: 15.05.2026

    CESTAT Allahabad Decision on Certificates of Origin, Customs Valuation, and Electronic Evidence Admissibility

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Allahabad recently adjudicated a significant case involving M/s Uttam Steel Alloys Pvt. Ltd. and its directors, addressing allegations of misrepresentation, customs duty evasion, and the authenticity of Certificates of Origin (COO) for imported steel products. This article provides a comprehensive overview of the dispute, the legal arguments, and the Tribunal’s final decision.

    Background of the Case

    M/s Uttam Steel Alloys Pvt. Ltd., an exporter and importer of steel products, faced accusations from the Directorate of Revenue Intelligence (DRI) of wrongfully availing preferential customs duty rates by submitting allegedly fake COO certificates for Cold Rolled Stainless Steel (CRSS) Coils imported from various countries, including Malaysia, Hong Kong, UAE, Indonesia, and China. The dispute centered on whether the goods were genuinely of the declared origin or were routed from China to other countries to evade higher duties.

    Key Allegations and Actions by Customs Authorities

    1. Rejection of COO Certificates:
      • Customs authorities rejected COO certificates for 28 Bills of Entry, disallowing preferential duty benefits under Notification No.46/2011-Cus.
      • 24 Bills of Entry were challenged on the grounds that goods were of Chinese origin, not the declared countries.
    2. Valuation Dispute:
      • The declared value of goods in 79 Bills of Entry (Rs.17.8 crore) was rejected and re-determined at Rs.29.5 crore, leading to a demand for differential customs duty of Rs.10.22 crore.
    3. Penalties and Recovery:
      • Penalties equal to the differential duty were imposed under Section 114A of the Customs Act.
      • The authorities relied heavily on electronic evidence (WhatsApp chats, emails, invoices) extracted from devices seized during searches.

    Legal Arguments by the Appellant

    The company and its directors, represented by legal counsel, raised several key defenses:

    1. Admissibility of Electronic Evidence:
      • Challenged the use of electronic evidence (printouts from devices) without proper certification under Section 65B of the Indian Evidence Act and Section 138C of the Customs Act.
      • Cited Supreme Court and Tribunal precedents requiring strict compliance for electronic evidence to be admissible.
    2. Authenticity of COO Certificates:
      • Argued that unless COO certificates are proven fake through verification with issuing authorities, their validity cannot be questioned.
      • Noted that in cases where certificates were found unauthentic, duties were already paid and accepted by customs.
    3. Valuation and Under-Valuation Claims:
      • Asserted that proforma invoices are mere quotations and cannot be used to enhance declared values.
      • Emphasized that no evidence of excess payment or contemporaneous imports at higher values was presented.
    4. Statements and Confessions:
      • Claimed statements by directors were not voluntary and lacked corroborative evidence.
      • Requested cross-examination of key witnesses, which was not granted.

    Tribunal’s Findings and Decision

    The Tribunal made several important observations:

    1. Electronic Evidence:
      • Held that electronic evidence without proper certification is inadmissible.
      • Noted that no independent investigation corroborated the electronic documents.
    2. COO Certificates:
      • Stressed that COO certificates issued by competent authorities must be given due weight unless proven otherwise.
      • Found no evidence of fake certificates for most imports.
    3. Valuation:
      • Ruled that Customs Valuation Rules apply only to goods not yet cleared for home consumption.
      • Enhancement of value based solely on proforma invoices was not legally sustainable.
    4. Penalties:
      • Since the main allegations were not sustained, penalties on the company and directors were dropped.

    Impact and Legal Precedents

    This case reinforces several legal principles:

    • Strict Compliance for Electronic Evidence: Only properly certified electronic records are admissible in customs proceedings.
    • COO Certificate Verification: Customs authorities must verify authenticity before denying benefits.
    • Valuation Rules: Enhancement of value must be based on contemporaneous data and actual payments, not mere quotations.
    • Natural Justice: Statements must be voluntary and corroborated; cross-examination is a right when witness testimony is relied upon.

    Conclusion

    The Tribunal set aside the impugned order, allowing all appeals filed by Uttam Steel Alloys Pvt. Ltd. and its directors, and granted consequential relief. This judgment underscores the importance of procedural safeguards, evidentiary standards, and fair investigation in customs disputes, setting a precedent for future cases involving import documentation and duty assessments.

    Source: CESTAT Allahabad

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  • CESTAT Mumbai Validates MEIS Scrip Payments for Education Cess and Surcharges

    CESTAT Mumbai Validates MEIS Scrip Payments for Education Cess and Surcharges

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

    Date: 15.05.2026

    CESTAT Mumbai Validates MEIS Scrip Payments for Education Cess and Surcharges

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Mumbai recently delivered a significant order regarding the validity of duty payments made through Merchandise Exports from India Scheme (MEIS) scrips. This article provides a detailed overview of the case, the legal issues involved, and the implications for importers and customs authorities.

    Background of the Case

    Multiple appeals were filed by the Revenue against importers who had discharged their customs duty liabilities—including Education Cess, Secondary & Higher Education Cess, and Social Welfare Surcharge—using MEIS duty credit scrips. The department contended that such payments were not permissible under the Foreign Trade Policy and relevant notifications, specifically for Education Cess and Secondary & Higher Education Cess prior to February 1, 2018.

    Key Legal Issues

    1. Scope of MEIS Scrip Utilization:
      • The Foreign Trade Policy 2015-20 and Notification No. 24/2015-Cus restricted MEIS scrip usage to Basic Customs Duty, Social Welfare Surcharge, and specified additional duties.
      • The department argued that there was no explicit provision allowing payment of Education Cess and Secondary & Higher Education Cess via MEIS scrips.
    2. CBIC Circular No. 02/2020-Customs (10.01.2020):
      • This circular clarified that past payments of Social Welfare Surcharge through MEIS scrips should not be disturbed and are to be accepted as valid.
      • The core dispute was whether this principle extended to Education Cess and Secondary & Higher Education Cess for past periods.

    Tribunal’s Analysis and Findings

    • The Tribunal noted that the CBIC Circular, while explicitly mentioning Social Welfare Surcharge, was based on administrative pragmatism and certainty. It emphasized that past payments made through MEIS scrips should be treated as valid discharge of duty.
    • The imports in question occurred before the circular’s issuance, and importers had discharged their liabilities without any allegations of fraud or mis-declaration.
    • The Tribunal referenced the Madras High Court’s decision in KTV Health Food Pvt. Ltd. v. Commissioner of Customs, which held that payments made through MEIS scrips towards Education Cess and Secondary & Higher Education Cess for past periods cannot be disturbed and are valid.
    • The Tribunal also cited its own precedent in Wellknown Polyester Ltd. v. Commissioner of Customs, Mumbai, reinforcing that cash payments should not be insisted upon where MEIS scrips had already been used.

    Final Order and Implications

    • The Tribunal dismissed the Revenue’s appeals, affirming that payments made through MEIS scrips for Education Cess and Secondary & Higher Education Cess (for the relevant past period) constitute valid discharge of duty liability.
    • Insisting on cash recovery would result in double recovery, which is impermissible.
    • The order provides clarity and relief to importers who had used MEIS scrips for such payments, ensuring administrative certainty and avoiding retrospective demands.

    Conclusion

    The CESTAT Mumbai ruling establishes that, for past periods, payments of Education Cess and Secondary & Higher Education Cess made through MEIS scrips are valid. This decision, grounded in CBIC’s administrative guidance and judicial precedents, offers significant clarity for importers and customs authorities alike.

    Connected Matter

    Madras High Court Quashes Customs Order on Education Cess Debiting from MEIS Scrips and Upholds Importer’s Right to Refund

    Source: CESTAT Mumbai

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  • CESTAT Kolkata Upholds Validity of Certificates of Origin

    CESTAT Kolkata Upholds Validity of Certificates of Origin

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

    Date: 14.05.2026

    CESTAT Kolkata Upholds Validity of Certificates of Origin

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Eastern Zonal Bench, Kolkata, recently delivered a significant order in a series of appeals involving Anil Industries and other respondents. The core issue revolved around customs duty assessments and the validity of Certificates of Origin for imported goods.

    Background of the Case

    The appeals arose from an Order-in-Original issued by the Commissioner of Customs (Preventive), Kolkata. The Revenue (appellant) challenged the dropping of proceedings by the Adjudicating Authority, arguing that the Certificates of Origin submitted by the respondents were not proper and should not be relied upon.

    Key Legal Issues

    1. Cross-Examination of Witnesses
      • The Adjudicating Authority noted that key witnesses, Shri Narendra Lodaya and Shri Dhaval Lapasiya, did not attend personal hearings or offer themselves for cross-examination, despite efforts by the investigating agency.
      • The absence of cross-examination led to the presumption that the evidence provided by these witnesses could not be relied upon, as per legal principles and the directions of the Hon’ble High Court.
    2. Validity of Certificates of Origin
      • The Revenue’s case was based on the allegation that the Certificates of Origin were improper.
      • However, it was admitted that these certificates, issued by the overseas country, remained valid and had not been cancelled by the issuing authorities.
      • The Tribunal emphasized that unless the certificates are proven to be fake or fabricated, or cancelled by the issuing country, they must be accepted as valid documents.

    Tribunal’s Findings and Precedents

    • The Tribunal referred to previous cases, including CC (Prev), Kolkata Vs Shri Krishan Goswami and Commissioner of Customs (Preventive), West Bengal, Kolkata vrs. RTC Overseas Pvt. Ltd., where similar issues were adjudicated.
    • In these cases, the Tribunal upheld the validity of Certificates of Origin when they were not disputed or cancelled by the issuing authorities.
    • The Tribunal also highlighted the importance of allowing cross-examination of witnesses, as mandated by the High Court. If witnesses are not produced for cross-examination, their statements cannot be relied upon.

    Final Order and Implications

    • The Tribunal dismissed the appeals filed by the Revenue, affirming the Adjudicating Authority’s decision to drop the proceedings.
    • The order reinforces the principle that valid Certificates of Origin must be accepted unless proven otherwise, and that procedural fairness, including the right to cross-examination, is essential in customs adjudication.

    Conclusion

    This case sets a clear precedent for customs proceedings involving Certificates of Origin and witness statements. It underscores the necessity for authorities to follow due process and respect the rights of parties to cross-examine witnesses. The Tribunal’s decision provides clarity and guidance for similar cases in the future, ensuring that valid documents and procedural fairness remain central to customs adjudication.

    Source: CESTAT Kolkata

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  • CESTAT Allahabad Ruled on Refund of Extra Duty Deposit, Unjust Enrichment, and Limitation u/s 27 of the Customs Act

    CESTAT Allahabad Ruled on Refund of Extra Duty Deposit, Unjust Enrichment, and Limitation u/s 27 of the Customs Act

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

    Date: 14.05.2026

    CESTAT Allahabad Ruled on Refund of Extra Duty Deposit, Unjust Enrichment, and Limitation u/s 27 of the Customs Act

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The legal dispute between M/s Global YDK Electric Pvt Ltd and the Customs Department, adjudicated by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Allahabad, centers on the refund of Extra Duty Deposit (EDD) paid during provisional assessment of imported goods. This case highlights the complexities of customs duty refunds, the principle of unjust enrichment, and the interpretation of statutory time limits under the Customs Act, 1962.

    Background of the Case

    1. Parties Involved:
      • Appellant: M/s Global YDK Electric Pvt Ltd, Greater Noida
      • Respondent: Commissioner of Customs, Central Goods & Service Tax, Noida
    2. Nature of Dispute:
      • The appellant sought a refund of EDD totaling Rs. 5,08,628, paid against two Bills of Entry (2774040 dated 15.02.2021 and 7055380 dated 12.01.2022).
      • EDD was collected at 5% due to the related supplier status and provisional assessment.
      • After finalization of the Bills of Entry with no addition to declared value, the appellant filed for a refund.

    Chronology of Proceedings

    1. Initial Refund Claim:
      • Filed on 21.02.2024 for Rs. 5,08,628.
      • Assistant Commissioner sanctioned Rs. 3,26,972 (pertaining to Bill of Entry 2774040) and rejected Rs. 1,81,656 (pertaining to Bill of Entry 7055380) citing limitation.
    2. Appeal and Remand:
      • The appellant challenged the rejection, leading to a remand by the Commissioner (Appeals) for proper analysis of unjust enrichment and assessment dates.
    3. Adjudicating Authority’s Findings:
      • Confirmed eligibility for refund of Rs. 1,81,656 but ordered transfer to Consumer Welfare Fund, stating the duty incidence was passed to M/s Global Autotech Ltd (the promoter company).
    4. Further Appeals:
      • The appellant argued the EDD was paid via a loan from the promoter, which was subsequently repaid, and thus the burden was not passed on.
      • Provided supporting vouchers, bank payment records, and Chartered Accountant certificates.

    Key Legal Issues

    1. Unjust Enrichment Principle

    • Authorities claimed the refund was not due to the appellant as the duty was paid by the promoter company.
    • The appellant demonstrated through accounting records and CA certificates that the EDD was a loan, not a transfer of duty burden.
    • Tribunal found that the loan transaction was separate from the customs clearance and the burden was not passed to the buyer of goods.

    2. Limitation Period for Refund Claims

    • Section 27 of the Customs Act requires refund claims within one year of final assessment.
    • The Tribunal clarified that EDD is a security deposit, not customs duty, and limitation provisions do not strictly apply.
    • Cited relevant High Court and Supreme Court judgments supporting this interpretation.

    3. Interest on Refunds

    • The appellant claimed entitlement to interest under Section 18(4) of the Customs Act.
    • Tribunal agreed, referencing Supreme Court precedents.

    Tribunal’s Decision

    • The Tribunal allowed the appeal, setting aside the impugned order.
    • Recognized the appellant’s right to refund of Rs. 1,81,656, as the burden was not passed on and the EDD was a loan.
    • Ordered payment of interest as per statutory provisions.

    Implications and Precedents

    1. EDD as Security Deposit:
      • EDD collected during provisional assessment is not customs duty and should be refunded if no additional duty is found upon final assessment.
    2. Accounting Evidence:
      • Proper documentation (balance sheets, vouchers, CA certificates) is crucial in establishing who bore the duty burden.
    3. Legal Precedents:
      • The case references multiple High Court and Supreme Court decisions, reinforcing the distinction between EDD and customs duty and the non-applicability of limitation for refund claims.

    Conclusion

    This case underscores the importance of clear financial records and legal understanding in customs disputes. The Tribunal’s decision affirms that EDD paid as a loan is refundable to the importer, not subject to unjust enrichment, and eligible for interest. Importers facing similar issues should ensure robust documentation and timely appeals to safeguard their rights.

    Source: CESTAT Allahabad

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  • CESTAT Ahmedabad Ruled on Customs Duty Exemptions for Aircraft Importers

    CESTAT Ahmedabad Ruled on Customs Duty Exemptions for Aircraft Importers

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

    Date: 13.05.2026

    CESTAT Ahmedabad Ruled on Customs Duty Exemptions for Aircraft Importers

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) West Zonal Bench at Ahmedabad recently delivered a significant order addressing the eligibility of customs duty exemptions for aircraft importers under Notification No. 21/2002-Cus., as amended by Notification No. 61/2007-Cus. This article provides a comprehensive overview of the tribunal’s findings, the legal context, and the broader implications for aviation operators and customs authorities.

    Background: The Dispute Over Aircraft Import Exemptions

    Multiple appeals were filed by various aviation companies and individuals against orders confirming differential customs duty and imposing penalties. The central issue was whether the appellants had improperly availed themselves of customs duty exemptions for importing aircraft, specifically under the conditions set out in Notification No. 21/2002-Cus. The customs authorities argued that the aircraft were not used in accordance with the notification’s requirements, particularly regarding the distinction between non-scheduled (passenger) and non-scheduled (charter) services.

    Key Legal Provisions and Definitions

    • Notification No. 21/2002-Cus. (as amended): Grants customs duty exemption to aircraft imported for non-scheduled (passenger) or non-scheduled (charter) services, subject to specific conditions.
    • Condition No. 104: Requires the importer to be an approved operator and to furnish an undertaking that the aircraft will be used only for the specified non-scheduled services.
    • Relevant Definitions:
      • Non-scheduled (passenger) services: Air transport services other than scheduled (passenger) air transport services.
      • Non-scheduled (charter) services: Services provided by a non-scheduled (charter) air transport operator for charter or hire, with published tariff and DGCA approval.

    Tribunal’s Analysis and Findings

    1. Eligibility for Exemption

    • The tribunal clarified that the exemption is available to both non-scheduled (passenger) and non-scheduled (charter) service operators.
    • There is no prohibition in the notification or the Civil Aviation Requirements (CAR) against a non-scheduled (passenger) service permit holder conducting charter operations.
    • The DGCA’s clarifications and CAR 1999 explicitly allow non-scheduled operators to conduct charter operations.

    2. Use of Aircraft and Remuneration

    • The tribunal emphasized that as long as the aircraft is used for air transport services for remuneration, it qualifies as public transport and not private use.
    • Even if some flights are conducted without remuneration, if the operator’s business includes carriage by air for hire or reward, such flights are still considered public transport.

    3. Publication of Tariff and Issuance of Tickets

    • There is no requirement under the notification or the Aircraft Rules for non-scheduled (passenger) service operators to publish tariffs or issue passenger tickets.
    • The absence of a published tariff does not convert the use of the aircraft into private use.

    4. Role of DGCA and Customs Authorities

    • The tribunal held that compliance with operational conditions is primarily monitored by the DGCA and the Civil Aviation Ministry.
    • Customs authorities can act only if the DGCA finds a violation of the permit conditions.
    • Renewal of permits by the DGCA without objection supports the operator’s compliance.

    5. Distinction from Other Judicial Decisions

    • The tribunal distinguished the present cases from the Delhi High Court’s decision in East India Hotels Ltd., where the aircraft was always used without remuneration and thus did not qualify as public transport.
    • In the present cases, evidence showed that the aircraft were used for hire or reward, supporting the claim for exemption.

    Implications for Aviation Operators

    1. Clarity on Permitted Operations:
      • Operators holding non-scheduled (passenger) permits can legally conduct charter operations without risking exemption denial, provided they comply with DGCA guidelines and use the aircraft for remuneration.
    2. Documentation and Compliance:
      • Maintaining records of flights, invoices, and evidence of remuneration is crucial to demonstrate compliance with exemption conditions.
    3. Customs and DGCA Coordination:
      • Operators should ensure ongoing compliance with DGCA requirements, as customs authorities rely on DGCA findings to assess exemption eligibility.
    4. No Need for Published Tariff:
      • Non-scheduled (passenger) operators are not required to publish tariffs or issue tickets, simplifying operational requirements.

    Conclusion

    The tribunal’s order provides much-needed clarity for aircraft importers and operators regarding the scope of customs duty exemptions. By affirming that non-scheduled (passenger) operators can conduct charter operations and that compliance is primarily a matter for the DGCA, the decision reduces regulatory uncertainty and supports the growth of non-scheduled aviation services in India. Operators should, however, maintain robust documentation and ensure all operations are for hire or reward to safeguard their exemption status.

    Connected Matter

    Delhi High Court Addresses Aircraft Usage and Customs Duty Exemption Dispute

    Source: CESTAT Ahmedabad

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  • CESTAT Mumbai Sets Aside Customs Confiscation, Penalties and Drawback Denial

    CESTAT Mumbai Sets Aside Customs Confiscation, Penalties and Drawback Denial

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

    Date: 13.05.2026

    CESTAT Mumbai Sets Aside Customs Confiscation, Penalties and Drawback Denial

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    SOL Mobiles Private Limited recently faced a significant legal challenge regarding the export of mobile phones. The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Mumbai issued an order addressing appeals by the company against customs confiscation, penalties, and denial of drawback. This article provides a comprehensive overview of the tribunal’s findings, the legal issues involved, and the implications for exporters.

    Background of the Case

    SOL Mobiles Private Limited exported mobile phones, claiming duty drawback benefits. Customs authorities alleged that the exported phones had been used prior to export, which violated export regulations. As a result, customs officials confiscated the goods, imposed penalties, and denied the drawback claims. The company appealed these actions to the CESTAT Mumbai.

    Key Legal Issues

    1. Confiscation of Goods
      • Customs authorities confiscated the exported mobile phones, arguing that they were not new and had been used before export.
      • The tribunal examined whether the confiscation was justified under customs law, focusing on the definition of ‘new’ goods and the evidence of prior use.
    2. Imposition of Penalties
      • Penalties were levied against SOL Mobiles for alleged misdeclaration and violation of export rules.
      • The tribunal assessed the appropriateness of these penalties, considering the intent and actions of the exporter.
    3. Denial of Drawback
      • Duty drawback is a refund of customs duties paid on imported materials used in exported goods.
      • Customs denied the drawback, claiming the goods did not qualify due to their used status.
      • The tribunal evaluated whether the denial was consistent with the law and the facts presented.

    Tribunal’s Findings

    • The CESTAT Mumbai scrutinized the evidence regarding the condition of the mobile phones at the time of export.
    • The tribunal considered whether SOL Mobiles had adequately demonstrated that the phones were new and eligible for drawback.
    • It analyzed the procedures followed by customs officials and whether due process was observed in confiscation and penalty imposition.

    Implications for Exporters

    1. Documentation and Evidence
      • Exporters must maintain clear records proving the condition of goods at the time of export.
      • Proper documentation can help avoid disputes over eligibility for duty drawback and prevent confiscation.
    2. Compliance with Customs Regulations
      • Understanding and adhering to customs rules is essential, especially regarding the definition of ‘new’ versus ‘used’ goods.
      • Exporters should ensure declarations are accurate and supported by evidence.
    3. Legal Recourse
      • The case highlights the importance of the appellate process in resolving disputes with customs authorities.
      • Companies can challenge adverse decisions through tribunals like CESTAT, which provide an independent review.

    Conclusion

    The CESTAT Mumbai order in the SOL Mobiles case underscores the complexities of customs regulations and the critical role of evidence in export disputes. Exporters should be vigilant in maintaining documentation and complying with legal requirements to safeguard their interests. The tribunal’s decision serves as a valuable reference for companies facing similar challenges in the export sector.

    Source: CESTAT Mumbai

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