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Category: Customs

  • CESTAT Kolkata: Foreign Origin and Smuggled Character Are Two Distinct Questions Under Customs Law

    CESTAT Kolkata: Foreign Origin and Smuggled Character Are Two Distinct Questions Under Customs Law

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 26.10.2026

    CESTAT Kolkata: Foreign Origin and Smuggled Character Are Two Distinct Questions Under Customs Law

    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), Kolkata has allowed nine connected appeals concerning the seizure of 39.156 metric tonnes of betel nuts, ruling that Customs did not establish that the goods were of foreign origin or had been smuggled into India.

    In Final Order Nos. 76499-76507/2026, pronounced on 15 October 2026, the Tribunal set aside the confiscation order and all related penalties. The decision underscores an important principle in customs law: for non-notified goods such as betel nuts, the burden remains on the Revenue to prove smuggling with reliable evidence rather than assumptions, inconclusive reports, or uncorroborated statements.

    Background: Two Trucks Intercepted Near Siliguri

    The case arose from a Directorate of Revenue Intelligence (DRI) operation on 3 March 2019. Acting on intelligence that allegedly smuggled betel nuts from Myanmar were being transported through the Siliguri area, officers intercepted two trucks at Goaltuli More on the Fulbari-Ghoshpukur Bypass Road in Darjeeling district, West Bengal.

    The trucks, bearing registration numbers AP-27TX-6129 and WB-65C-5608, were carrying betel nuts stated to have been loaded at Vairengte, Mizoram, for delivery to consignees in Hooghly and Nabadwip, West Bengal. The drivers produced transport documents, tax invoices, consignment notes and e-way bills. One consignment was documented as supplied by M/s A.D. Store to M/s Papai Traders, while the other was documented as supplied by M/s Zotei Enterprise to Shri Narayan Karmakar.

    Following a search at the DRI office in Siliguri, officers found:

    • 209 bags weighing 16.302 MT in truck AP-27TX-6129;
    • 293 bags weighing 22.854 MT in truck WB-65C-5608; and
    • A combined quantity of 39.156 MT, valued by Customs at Rs. 1,07,67,900.

    Customs seized the goods, the two carrier vehicles, related documents and two mobile phones. The department alleged that the betel nuts had been smuggled from Myanmar through the Indo-Myanmar border and were therefore liable to confiscation under Sections 111(b) and 111(d) of the Customs Act, 1962.

    Customs Case and Earlier Orders

    The Revenue relied mainly on statements recorded from the truck drivers and helpers, investigation into the consignors and consignees, call-detail records, and a report from the Arecanut Research and Development Foundation (ARDF), Mangalore.

    The ARDF report stated that the samples β€œseems to be of North-East including Myanmar region.” It also noted mould infestation and non-compliance with BIS standards. Customs treated this report, along with the statements and surrounding circumstances, as support for the allegation that the consignments were of Myanmar origin and had entered India illegally.

    On 28 August 2020, the adjudicating authority ordered absolute confiscation of the betel nuts and imposed penalties on the persons connected with the consignments. The Commissioner of Customs (Appeals) upheld that order on 23 February 2022.

    The affected parties, including Debasish Saha of M/s Papai Traders, Dipak Saha, Narayan Karmakar, Sujit Mitra, Md. Shamim Uddin, Zoramthari, Nilkamal Saha, Anjan Kumar Paul and Lalenkawli, then appealed to CESTAT.

    Tribunal’s Findings: Evidence Did Not Prove Smuggling

    The Tribunal found that the department’s evidence was insufficient to establish either foreign origin or illegal importation.

    1. The ARDF opinion was not conclusive

    CESTAT noted that the ARDF report did not say the goods were of Myanmar origin. Its wordingβ€”that the samples β€œseems to be of North-East including Myanmar region”—was held to be inconclusive. A reference to a broad region that includes Myanmar could not, by itself, prove that the goods originated in Myanmar.

    The Tribunal also relied on judicial precedents that question the evidentiary value of such reports where there is no recognised scientific or objective test capable of determining the territorial origin of betel nuts.

    2. Betel nuts are non-notified goods

    A central point in the ruling was that betel nuts are not notified under Section 123 of the Customs Act. As a result, the statutory burden does not shift to the person from whom the goods are seized. Instead, Customs must prove that the goods are smuggled.

    The Tribunal held that the Revenue could not meet this burden merely by relying on suspicion, a tentative expert opinion, or statements. Even if goods were assumed to be of foreign origin, that alone would not establish illegal importation; positive evidence of smuggling was still required.

    3. The seizure location and accompanying documents mattered

    The goods were intercepted in West Bengal, not at the Indo-Myanmar border. The trucks also carried invoices and other commercial transport documents identifying Mizoram-based suppliers and West Bengal consignees.

    The Tribunal held that these facts did not permit an automatic inference that the goods had crossed the border illegally. The documentary trail could not be displaced without cogent contrary evidence.

    4. Precedents required proof, not presumption

    The order relied on the Calcutta High Court’s ruling in Commissioner of Customs, Central Excise and Service Tax, Siliguri v. Subodh Das, which was subsequently affirmed by the Supreme Court. That line of authority establishes that, for non-notified betel nuts, Customs must discharge the burden of proving foreign origin and smuggled character.

    The Tribunal also referred to Maqsood Alam v. Commissioner of Customs, Lucknow and Maa Kamakhya Trader v. Commissioner of Customs (Preventive). These decisions emphasise that visual assessments, inconclusive opinions and strong suspicion cannot replace objective evidence of smuggling.

    Outcome: Confiscation and Penalties Quashed

    CESTAT concluded that the Revenue had failed to prove that the seized betel nuts were smuggled goods. It therefore set aside the confiscation of the 39.156 MT consignment and held that no penalties could be imposed on the appellants.

    The Tribunal allowed all connected appeals and overturned the Order-in-Appeal dated 23 February 2022.

    Key Legal Significance

    This ruling reinforces that customs enforcement actions involving non-notified goods must rest on clear, affirmative and legally reliable evidence. In particular:

    • A tentative report suggesting a possible regional origin is not proof of foreign origin.
    • Foreign origin, even if established, does not automatically prove that goods were illegally imported.
    • For non-notified goods, Customs bears the burden of proving smuggling.
    • Confiscation and penalties cannot be sustained on presumptions, suspicion or inadequately supported statements.

    The decision provides a significant restatement of evidentiary standards in betel-nut smuggling cases, particularly where seizures occur away from an international border and goods are accompanied by commercial documentation.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: CESTAT Kolkata

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    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Delhi High Court Refuses to Condone Customs Department’s Delay

    Delhi High Court Refuses to Condone Customs Department’s Delay

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 24.10.2026

    Delhi High Court Refuses to Condone Customs Department’s Delay

    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 Delhi High Court has dismissed the Customs Department’s appeal against Spectro Lab Equipments Pvt. Ltd. after finding that its 154-day delay was supported by no reasonable, specific, or substantiated explanation.

    The ruling, delivered on 15 October 2026 in Commissioner of Customs Air Cargo Complex (Import) v. Spectro Lab Equipments Pvt. Ltd., reinforces a settled principle: government departments are subject to limitation laws just like any other litigant. Internal file movement, procedural delay, or an unsupported allegation that prior counsel failed to act will not automatically establish β€œsufficient cause” for a delayed appeal.

    Background of the dispute

    The Commissioner of Customs, Air Cargo Complex (Import), sought to challenge a Customs, Excise and Service Tax Appellate Tribunal order dated 29 January 2025. The appeal was brought under Section 130 of the Customs Act, 1962.

    The Department stated that it received the Tribunal’s order on 13 February 2025 but filed its High Court appeal only on 9 January 2026. Because the filing exceeded the prescribed period, the Department submitted an application seeking condonation of a 154-day delay.

    Its explanation was that the complete case file had been handed to an earlier counsel on 26 June 2025. According to the Department, that counsel neither filed the appeal nor informed it of any issue. The file was then said to have been assigned to present counsel on 16 October 2025, after which additional documents were obtained and the appeal was filed.

    Why the Court rejected the explanation

    The Division Bench of Justice Avneesh Jhingan and Justice Shail Jain found material deficiencies in the Department’s explanation.

    1. More than four months passed before the file was given to counsel

    The Department received the impugned order on 13 February 2025 but claimed to have handed the file to its earlier counsel only on 26 June 2025. The Court noted this substantial initial period of inactivity.

    No detailed explanation was offered for why the Department took over four months to transfer the matter for filing an appeal.

    2. The Department did not show that it followed up with earlier counsel

    After allegedly handing over the file on 26 June 2025, the Department did not plead that it had made any inquiry about the appeal’s status. It also did not state when the file was retrieved from the earlier counsel.

    The Court treated this lack of follow-up as significant. A party seeking condonation must show diligence in protecting its legal rights; it cannot merely assert that a file was given to a lawyer and then remain inactive.

    3. The allegation against earlier counsel was unsupported

    Although the Department blamed its former counsel, it did not disclose that counsel’s details or submit an affidavit from the counsel supporting the account. This was especially relevant because the Department had its own panel of counsel.

    The Court found the allegation vague and unsubstantiated rather than a reliable factual basis for excusing the delay.

    4. The explanation was internally inconsistent

    The pleadings stated that a β€œcomplete” file was supplied to earlier counsel. However, the Department’s counsel also argued that additional documents had to be obtained after the present counsel received the matter, contributing to the filing delay.

    The Court considered these positions contradictory. If the first counsel received a complete file, the later assertion that necessary documentation was still unavailable required a clear explanation. None was provided.

    Government departments cannot claim special treatment under limitation law

    The Court relied on established Supreme Court decisions holding that the law of limitation applies equally to the government.

    In Postmaster General v. Living Media India Ltd., the Supreme Court held that administrative negligence, routine file movement, and bureaucratic red tape do not constitute sufficient cause unless the department provides a reasonable and acceptable explanation and demonstrates bona fide efforts to act in time.

    The Delhi High Court also referred to State of Bihar v. Deo Kumar Singh, which confirms that delay cannot be condoned merely because of lethargic governmental functioning. It further cited Rajneesh Kumar v. Ved Prakash, where the Supreme Court cautioned that litigants cannot escape responsibility for a prolonged delay simply by shifting all blame to their advocates.

    The Court additionally relied on Pathapati Subba Reddy v. Collector (LA), emphasizing that a liberal or justice-oriented approach does not remove the threshold requirement of β€œsufficient cause.” Courts cannot mechanically revive stale claims where negligence, inaction, or lack of bona fides is apparent.

    The Court’s decision

    The High Court held that the condonation application was cursory, vague, and lacking in particulars. The period between 26 June 2025 and 15 October 2025 had effectively been left unexplained, apart from the unsupported attempt to blame earlier counsel.

    Finding no reasonable explanation for the 154-day delay, the Court dismissed the application for condonation. As a result, the Customs appeal itself was also disposed of.

    Key legal takeaway

    This decision is a clear reminder that condonation of delay is an exception, not an anticipated benefit for government litigants. A department seeking relief must present a coherent, evidence-based timeline showing prompt action, regular monitoring, and a genuine cause for missing the limitation period. General references to internal processing or counsel-related delay, without supporting facts, will not meet that standard.

    For litigants and public authorities alike, the ruling underscores that vigilance in pursuing appeals is essential: limitation periods are binding, and courts will not overlook unexplained inactivity simply because the appellant is a government department.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Delhi High Court

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    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Gujarat High Court- Administrative Circulars Cannot Curtail Statutory SAD Refunds

    Gujarat High Court- Administrative Circulars Cannot Curtail Statutory SAD Refunds

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 23.10.2026

    Gujarat High Court- Administrative Circulars Cannot Curtail Statutory SAD Refunds

    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 Gujarat High Court held that customs and trade authorities could not use administrative circulars or a public notice to curtail a statutory refund benefit available under a customs exemption notification.

    In Agarwalla Timbers Pvt. Ltd. v. Union of India & Ors., decided on 12 October 2022, the Gujarat High Court ruled in favour of importers who had paid Special Additional Duty (SAD) through DEPB and Reward Scheme scrips. The Court invalidated the restriction that prevented use of re-credited scrips after 30 September 2013 and directed that, where such scrips were no longer available, the refund must be paid electronically, with 6% interest.

    Background: Why SAD Refunds Matter

    SAD is an additional customs duty levied under Section 3(5) of the Customs Tariff Act, 1975. It is intended to create parity between imported goods and domestically purchased goods, since domestic transactions generally attract sales tax or VAT.

    Under Notification No. 102/2007-Cus dated 14 September 2007, an importer who subsequently sells imported goods in India and pays applicable sales tax or VAT can claim refund of SAD, subject to the conditions in the notification.

    Where SAD was paid in cash, the refund was ordinarily made in cash. Where it was paid by debit in DEPB or Reward Scheme scrips, departmental instructions contemplated a re-credit of the amount in the relevant scrip.

    The Dispute Before the Court

    Agarwalla Timbers imported timber and paid customs duties, including SAD. Some SAD payments were made through DEPB and Reward Scheme scrips acquired from the market. The company later sold the imported goods on payment of VAT/sales tax and filed SAD refund claims.

    The refund process was delayed because Customs disputed whether round logs, after being processed into sawn timber, retained the identity required for the refund. Earlier proceedings ultimately supported the importer’s position, and the Supreme Court had also issued an interim direction requiring refund upon a 50% bank guarantee.

    However, when Customs granted the refunds in May and June 2013, the authorities had introduced a new deadline. DGFT Public Notice No. 6(RE-2013)/2009-14 dated 18 April 2013 and CBEC Circular No. 18/2013-Cus dated 29 April 2013 provided that re-credited scrips could be used only up to 30 September 2013.

    The importer could not fully use the re-credited amount within that limited period. Its request to transfer the credit was rejected. The dispute before the High Court was therefore whether these administrative measures could lawfully deprive the importer of its refund benefit.

    The Court’s Decision

    The Court held that the 18 April 2013 public notice and the 29 April 2013 circular were invalid insofar as they denied SAD refund through DEPB or Reward Scheme scrips beyond 30 September 2013.

    It found that the petitioners had filed their refund claims properly and that the inability to use the credit arose because of delays by the authorities. The Court rejected the proposition that the department could rely on a cut-off date after its own delayed processing had made the benefit impracticable.

    The Court directed:

    • sanction of the refund relating to re-credited DEPB/Reward Scheme scrips;
    • payment through RTGS within 12 weeks if the relevant scrip mechanism was no longer available; and
    • interest at 6% from the date of receipt of the refund application until payment.

    Core Legal Principles Applied

    1. A circular cannot amend an exemption notification

    The central principle is that an exemption notification issued under Section 25(1) of the Customs Act has statutory force. If the government wishes to impose a new condition, restrict a benefit, or alter the terms of that exemption, it must do so through a fresh notification issued under the same statutory power.

    The Court held that a DGFT public notice and CBEC circular could not introduce a new restriction on the refund benefit under Notification No. 102/2007-Cus.

    2. Administrative instructions cannot override statutory rights

    Circulars may guide customs officers and help ensure consistent administration. They cannot, however, reduce, defeat, or impose harsher conditions than those contained in the governing statute or statutory notification.

    The 30 September 2013 deadline was not a condition in the exemption notification. By making refund availability dependent on using re-credited scrips before that date, the authorities effectively added a condition without statutory authority.

    3. Conditions for exemption must appear in the notification itself

    The Court reaffirmed that importers must be able to identify the conditions of an exemption from the notification that grants it. A condition cannot later be introduced through an executive instruction, guideline, press note, or circular.

    This principle protects legal certainty in customs administration. Businesses should not lose an existing fiscal benefit because an authority later changes procedure through a non-statutory instrument.

    4. The State cannot benefit from its own delay

    The Court found no fault on the part of the petitioners in filing their refund claims. The claims remained pending due to departmental action and disputes. Once refund was sanctioned, only a short period remained before the administrative cut-off expired.

    The authorities could not rely on that deadline to deny the benefit where their own delay had prevented meaningful use of the re-credit.

    5. Interest on delayed refunds runs from the refund application

    Relying on Ranbaxy Laboratories Ltd. v. Union of India, the Court held that interest is payable from the date of receipt of the refund application until payment. It did not accept that interest could be postponed until the date of a later refund order.

    The Court fixed the rate at 6%.

    Precedents Relied Upon

    The judgment follows an established line of authority against executive modification of statutory exemptions:

    • Allen Diesels India Pvt. Ltd. v. Union of India: The Delhi High Court held that CBEC circulars could not add restrictions to SAD refund under Notification No. 102/2007-Cus.
    • Sandur Micro Circuits Ltd.: A circular cannot take away the effect of a statutory notification or narrow the exemption granted by it.
    • Inter Continental (India): The Gujarat High Court held that additional conditions cannot be read into an exemption notification and departmental circulars cannot override it.
    • Union of India v. Inter Continental (India): The Supreme Court affirmed that a circular cannot add a condition that restricts the scope of an exemption notification.
    • Ranbaxy Laboratories Ltd.: Interest on delayed refund becomes payable after the prescribed period from receipt of the refund application.

    Significance for Importers and Exporters

    The ruling is significant because it reinforces the hierarchy of legal instruments in customs law. Statutory provisions and notifications issued under statutory authority prevail over administrative circulars and public notices.

    For businesses, the judgment confirms that:

    • a valid refund entitlement cannot be curtailed by a circular that adds a condition absent from the exemption notification;
    • procedural instructions cannot defeat substantive fiscal rights;
    • delayed departmental processing cannot be used to extinguish an accrued refund benefit; and
    • where an obsolete mechanism makes re-credit impossible, the refund should be provided through an effective alternative mode, such as electronic bank transfer.

    Conclusion

    The Gujarat High Court’s ruling protects importers from losing SAD refunds merely because administrative authorities imposed a non-statutory deadline or processed claims too late. Its key message is clear: an executive circular may administer a statutory exemption, but it cannot rewrite, narrow, or nullify it.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Gujarat High Court

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    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • β€œIntellectual Property Laws are protected under Indian Customs Border Control Laws”

    β€œIntellectual Property Laws are protected under Indian Customs Border Control Laws”

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    Aadrikaa Law Offices (ALO)- Customs I Trade Compliance I IDT Tax I Arbitration I Litigation

    Date: 04.02.2026

    β€œIntellectual Property Laws are protected under Indian Customs Border Control Laws”

    Adv Ravi Shekhar Jha
    Adv Ravi Shekhar Jha

    This Article has been written by Advocate Ravi Shekhar Jha- BALLB & LLM (Constitutional Law) 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.comor on his Mobile +91-9999005379.

    ​​ ​​  β€‹  β€‹ ​​ ​

    Summary: Customs and Intellectual Property Rights (IPRs)

    This short Article provides an overview of the Indian Customs’ measures for protecting Intellectual Property Rights (IPRs) at the border. ​ It outlines the procedures, laws, and rules for IPR registration, enforcement, interdiction, determination, and disposal of infringing goods. ​

    Key Points

    Types of IPRs Protected by Customs ​

    • Trademarks Act, 1999 ​
    • Patents Act, 1970 ​
    • Geographical Indications of Goods (Registration and Protection) Act, 1999 ​
    • Copyright Act, 1957 ​
    • Designs Act, 2000 ​

    Customs Interdiction of Infringing Goods ​

    • Legal Basis: Section 11 of the Customs Act empowers the Central Government to prohibit import/export of goods violating IPRs. ​
    • Notification: Notification No. ​ 51/2010-Cus. (NT) prohibits the import of goods infringing IPRs. ​
    • Conditions: Prohibition is subject to the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 enforced through M.F. (D.R.) Notification No. 47/2007-Cus. (N.T.) dated 8th May, 2007 as amended.

    Rule 2. Definitions. 

    (a) “goods infringing intellectual property rights” means any goods which are made, reproduced, put into circulation or otherwise used in breach of the intellectual property laws in India or outside India and without the consent of the right holder or a person duly authorized to do so by the right holder;

    (b) “intellectual property” means a copyright as defined in the Copyright Act, 1957, trade mark as defined in the Trade Marks Act,1999, 1 [* * * *] design as defined in the Designs Act, 2000 and geographical indications as defined in the Geographical Indications of Goods (Registration and Protection) Act, 1999;

    (c) “Intellectual property law” means the Copyright Act, 1957, the Trade Marks Act,1999, 1 [* * * *] the Designs Act, 2000 or the Geographical Indications of Goods (Registration and Protection) Act, 1999;

    (d) “right holder” means a natural person or a legal entity, which according to the laws in force is to be regarded as the owner of protected intellectual property right, its successors in title, or its duly authorized exclusive licensee as well as an individual, a corporation or an association authorized by any of the aforesaid persons to protect its rights.

    Procedure for IPR Recordation with Customs:

    • Online Application: Submit applications at https://ipr.icegate.gov.in/IPR/homePage
    • Required Documents:
      • Registration certificate or proof of ownership. ​
      • Demand draft details/Online Payment through ICEGATE Portal/Payment Proof of INR 2000.00 only
      • Power of Attorney in the name of the Right Holder or the Authorized representative. ​
      • Statement of exclusivity. ​
      • Digital images of genuine and infringing goods. ​
      • IEC code. ​
      • Description of geographical indications (if applicable). ​

    Indemnity Bond

    • Protects Customs authorities from liability for detaining goods suspected of infringement. ​

    General Bond vs. Centralized Bond

    • General Bond: Requires consignment-specific bonds for each interdiction. ​
    • Centralized Bond: A running bond applicable across India, with a single Bond Registration Number (BRN) for all rights registered by the rights holder. ​

    Detention of Suspected Infringing Goods ​

    • Notification: Customs informs the importer and rights holder of the detention. ​
    • Action by Rights Holder:
      • Join proceedings within 5 days. ​
      • Inspect goods and take action within 10 working days (extendable by 10 more days). ​
      • Provide necessary bonds and evidence of infringement.
    • Maximum Detention Period for deciding the matter: 10 working days for regular goods; 3 working days for perishable goods. (Rule 7)

    Rule 11. Disposal of infringing goods:

    • (1) Where upon determination by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, it is found that the goods detained or seized have infringed intellectual property rights, and have been confiscated under section 111(d) of the Customs Act, 1962 and no legal proceedings are pending in relation to such determination, the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall, destroy the goods under official supervision or dispose them outside the normal channels of commerce after obtaining ‘no objection’ or concurrence of the right holder or his authorized representative :
    • Provided that if the right holder or his authorized representative does not oppose or react to the mode of disposal as proposed by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, within twenty working days after having been informed, or within such extended period as may have been granted by the Commissioner at the request of the right holder, not exceeding another twenty working days, he shall be deemed to have concurred with the mode of disposal as proposed by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be :
    • Provided further that the costs toward destruction, demurrage and detention charges incurred till the time of destruction or disposal, as the case may be, shall be borne by the right holder.
    • (2) There shall not be allowed the re-exportation of the goods infringing intellectual property rights in an unaltered state.
    • (3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may on his own, or at the request of the right holder, retain samples of goods infringing intellectual property rights prior to their destruction or disposal and provide the same to the right holder or importer if such samples are needed as evidence in pending or future litigation.

    Rule 12. Exclusion of baggage and De-minimis Imports:

    • Goods of a non-commercial nature contained in personal baggage or sent in small consignments intended for personal use of the importer are not subject to the above Rules.

    Ex Officio Action ​

    • Customs can suspend clearance of goods on its own initiative if there is prima facie evidence of infringement. Or at the written request of the Rights holder, as the case maybe.
    • Rights holder must comply with recordable requirements within 5 days. ​

    Post-Detention Procedure

    • Show Cause Notice: Issued to the importer and shared with the rights holder. ​
    • Adjudication: Includes importer’s reply and personal hearing. ​
    • Confiscation: If goods are found infringing, they are confiscated. ​

    Disposal/Destruction of Infringing Goods ​

    • Process: Confiscated goods are destroyed or disposed of outside normal commerce channels. ​
    • Rights Holder’s Consent: Required for destruction/disposal. ​
    • Samples: Provided to the rights holder upon request. ​

    Informing Customs of Infringing Consignments ​

    • Rights holders can notify Customs via email, fax, or post at the relevant Customs Station or Risk Management Division. ​

    This Short Article serves as a comprehensive guide for rights holders, Customs officers, importers, and other stakeholders involved in IPR enforcement at Indian borders. ​

    Source: CBIC, ICEGATE, Customs Act 1962

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  • β€œCAAR New Delhi Clarifies Classification of Smartphone Window Glass as β€˜Parts’ under CTH 8529”

    β€œCAAR New Delhi Clarifies Classification of Smartphone Window Glass as β€˜Parts’ under CTH 8529”

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    Aadrikaa Law Offices (ALO)- Customs I IDT Tax I Arbitration I Litigation

    Date: 30.01.2026

    β€œCAAR New Delhi Clarifies Classification of Smartphone Window Glass as β€˜Parts’ under CTH 8529”

    Adv Ravi Shekhar Jha
    Adv Ravi Shekhar Jha

    This Article has been written by Advocate Ravi Shekhar Jha-BALLB & LLM (Constitutional Law) 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.comor on his Mobile +91-9999005379.

    ​​ ​​  β€‹  β€‹ ​​ ​

    Summary of the Case

    The ruling concerns an application filed by M/s. Samsung Display Noida Private Limited before the Customs Authority for Advance Rulings (CAAR), New Delhi, seeking clarity on the tariff classification of imported β€œWindow Glass” used in the manufacture of display assemblies for mobile phones and tablets.

    The applicant argued that the product is not merely safety glass but an integral and indispensable component of the display assembly, providing protection, structural stability, optical clarity, and user interaction interface.

    Two competing tariff headings were examined:

    • CTH 7007 – Safety glass (toughened or laminated)
    • CTH 8529 – Parts suitable for use solely or principally with apparatus of headings 8525–8528

    After analysing the product’s function, industry usage, and HSN explanatory notes, the Authority concluded that the Window Glass functions as a part of the display assembly rather than standalone safety glass and therefore merits classification under CTH 8529 90 90 (β€œOther”).

    Legal / Statutory Provisions Referred

    1. Section 28E(c), Customs Act, 1962 β€” Defines β€œapplicant” eligible to seek an advance ruling.
    2. Section 28H β€” Governs the procedure for filing advance ruling applications.
    3. Section 28-I(2) β€” Bars admission where the issue is pending before any customs authority or court.
    4. Section 12, Customs Act, 1962 β€” Charging provision for levy of customs duty.
    5. General Rules for Interpretation (GIR) β€” Classification must follow headings, section notes, and chapter notes; Rule 3(c) applies when goods are equally classifiable.
    6. Section XVI Note 2(b) β€” Parts suitable for use solely or principally with a specific machine are classified with that machine.
    7. HSN Explanatory Notes to Heading 7007 and 8529 β€” Provide interpretative guidance on β€œsafety glass” versus β€œparts of apparatus.”

    Judicial Citations Referred:

    1. Saurashtra Chemicals v. Collector of Customs, 1997 (95) ELT 455 (SC)

    Held that section and chapter notes override headings, establishing hierarchy in tariff interpretation.

    2. O.K. Play (India) Ltd. v. CCE, Delhi III, 2005 (180) ELT 300 (SC)

    Recognised the HSN as a dependable guide for resolving classification disputes.

    3. I.M.L. Ltd. v. Commissioner of Customs, 2010 (258) ELT 321 (SC)

    Confirmed that HSN explanatory notes carry persuasive value in tariff interpretation.

    4. CC v. Gajra Beveling Electronics Ltd., 2005 (188) ELT 352 (SC)

    Reaffirmed reliance on HSN where domestic tariff mirrors international nomenclature.

    5. CCE v. Phil Corporation Ltd., 2008 (223) ELT 9 (SC)

    Held that classification must consider functional characteristics of goods.

    6. CAAR Mumbai Ruling β€” M/s Online Instruments India Pvt. Ltd. (01.05.2025)

    Display cover glass designed solely for Interactive Flat Panel Displays classified under CTH 8529, not 7007.

    Key Legal Principles Emerging from the Ruling

    • Functional test prevails over material composition in classification.
    • Goods forming an inseparable part of a larger apparatus should be classified as parts.
    • HSN explanatory notes remain a critical interpretative tool.
    • When dual classification is possible, GIR and section notes guide the final outcome.
    • Industry and commercial understanding can influence classification.

    Order Issued

    The CAAR held that the imported Window Glass is an integral component of the display assembly used in mobile phones and is therefore classifiable under CTH 8529 90 90 rather than CTH 7007.

    Expert View:

    This ruling is strategically important for the electronics manufacturing ecosystem, particularly for companies operating under India’s PLI-driven mobile manufacturing supply chains.

    Why the ruling matters:

    • It reinforces the β€œsole or principal use” doctrine for parts classification.
    • Prevents revenue authorities from adopting a narrow, material-based approach.
    • Provides certainty for importers of high-value electronic components.
    • Aligns Indian classification with global HSN interpretation β€” reducing litigation risk.

    Possible Future Impact:

    The decision may influence classification disputes involving touch panels, cover glass, OLED layers, and display modules, where authorities often attempt classification under generic glass headings.

    Caution:

    Since advance rulings are binding only on the applicant and jurisdictional officers, broader applicability will depend on departmental acceptance or appellate affirmation.

    Source: CAAR Ruling, New Delhi Bench

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  • CAAR Mumbai Rules Carbon Pultruded Plates under HSN 68151900 eligible for Concessional Duty as WOEG Blade Parts

    CAAR Mumbai Rules Carbon Pultruded Plates under HSN 68151900 eligible for Concessional Duty as WOEG Blade Parts

    Aadrikaa Law Offices (ALO)- IDT Tax I Arbitration I Litigation

    Dated: 30.01.2026

    CAAR Mumbai Rules “Carbon Pultruded Plates under HSN 68151900” eligible for Concessional Duty as WOEG Blade Parts

    Adv Ravi Shekhar Jha
    Adv Ravi Shekhar Jha

    This Article has been written by Advocate Ravi Shekhar Jha- BALLB & LLM (Constitutional Law) 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.comor on his Mobile +91-9999005379.

    Summary of the Case

    Applicant: Suzlon Energy Limited ​

    Subject Goods: Carbon Pultruded Plates ​

    Issue: Determination of the applicable Basic Customs Duty (BCD) rate for the import of Carbon Pultruded Plates under Notification No. ​ 50/2017-Customs (as amended by Notification No. ​ 05/2025-Customs). ​

    Suzlon Energy Limited sought an advance ruling on whether Carbon Pultruded Plates, used as spar caps in rotor blades of Wind Operated Electricity Generators (WOEG), qualify for concessional BCD under Sr. No. 405(4) or Sr. No. ​ 405(5) of the exemption notification. ​

    The applicant argued that the plates, made from carbon fibers, are integral to the manufacturing of rotor blades and should qualify for concessional BCD either as “raw materials” under Sr. No. ​ 405(5) or as “parts” under Sr. No. 405(4). ​

    The Customs Authority for Advance Rulings (CAAR) examined the classification of the goods under Customs Tariff Heading (CTH) 68151900 and the scope of the exemption notification. ​

    Legal and Statutory Provisions Referred to ​

    1. Customs Act, 1962 ​
      • Section 28H(1): Application for advance ruling.
      • Section 28-I(2): Matters related to classification of goods and applicability of exemption notifications. ​
    2. Customs Tariff Act, 1975 ​
      • Chapter Heading 68151900: Classification of Carbon Pultruded Plates as “Other articles of carbon fibers.” ​
    3. Notification No. ​ 50/2017-Customs (as amended by Notification No. ​ 05/2025-Customs) ​
      • Sr. No. ​ 405(5): Concessional BCD for “Balsa Wood, Carbon Fibre for the wind operated electricity generator blades.” ​
      • Sr. No. ​ 405(4): Concessional BCD for “Parts for the manufacture or the maintenance of blades for rotor of wind operated electricity generators.” ​

    Case Citations Referred to

    1. Collector of Central Excise v. Mahendra Engineering Works [1993 (67) ELT 134 (Tribunal)] ​
      • Established the principle that “a part of a part is a part of the whole,” meaning sub-components of a machine are categorized as components of the machine. ​
    2. Collector of Central Excise v. MP Oil Ltd [1990 (46) ELT 68 (Tribunal)] ​
      • Reaffirmed the principle that sub-components are integral parts of the whole machine. ​
    3. CCE v. Insulation Electrical [2008 (224) ELT 512 (SC)] ​
      • Defined “parts” as essential components of the whole without which the whole cannot function. ​
    4. Star Paper Mills Ltd. v. CCE [1989 (43) ELT 178 (SC)] ​
      • Distinguished machine-specific components as “parts” rather than generic raw materials. ​

    Order Passed by the Advance Ruling Authority ​

    1. Classification: Carbon Pultruded Plates are classified under CTH 68151900 as “Other articles of carbon fibers” with a standard BCD rate of 10%. ​
    2. Eligibility under Sr. No. ​ 405(5): The plates are not eligible for concessional BCD under Sr. No. ​ 405(5) as this entry covers only raw carbon fibers or balsa wood, not articles of carbon fibers. ​
    3. Eligibility under Sr. No. ​ 405(4): The plates qualify as “parts for the manufacture or maintenance of blades for rotor of wind operated electricity generators” and are eligible for concessional BCD at 5%. ​

    Final Ruling: Carbon Pultruded Plates are eligible for concessional BCD under Sr. No. 405(4) of Notification No. ​ 50/2017-Customs (as amended). ​

    1. Statutory Framework Governing Classification in India

    The primary legal framework for the classification of goods is derived from the First Schedule to the Customs Tariff Act, 1975, read with the General Rules for Interpretation (GRI).

    • Classification is the process of identifying the correct tariff heading or sub-heading for goods, which determines duty liability and eligibility for exemptions.
    • The GRI provides that classification shall be determined according to the terms of the headings and any relevant Section or Chapter Notes.

    Key Indian Statutes Applicable:

    1. Customs Tariff Act, 1975 – Provides tariff structure and GRI.
    2. Customs Act, 1962 – Governs levy, valuation, and import compliance once classification is determined.
    3. GST framework (where relevant) – Uses HSN for tax rate determination.

    India follows the internationally harmonized system designed by the World Customs Organization, used by over 200 countries for uniform classification.

    2. Binding Legal Principles for Classification

    (A) Primacy of Headings and Notes

    The Supreme Court-recognized rule is that classification must be based on:

    • Terms of the heading
    • Relevant Section Notes
    • Chapter Notes

    These notes are binding and can override headings when necessary.

    (B) Sequential Application of GRI

    • Titles of sections or chapters are only for reference.
    • Legal determination flows from headings and notes first.

    (C) Essential Character Rule

    Incomplete or unassembled goods are classified as finished goods if they possess the β€œessential character.”

    (D) Competing Headings β†’ Rule 3

    Where goods are prima facie classifiable under multiple headings, GRI Rule 3 determines the correct classification.

    (E) β€œMost Akin” Test

    The Supreme Court has clarified that classification should identify the category most akin to the imported goods, not merely rely on probability.

    3. Judicial Recognition of the Framework

    In Collector of Central Excise v. Wood Craft Products Ltd., 1995 (77) ELT 23 (SC), the Court emphasized that tariff interpretation rules govern classification and that Section/Chapter Notes carry statutory force.

    Further, the Supreme Court reiterated that classification is crucial because it determines the legal and financial treatment of goods, including duty implications.

    4. Special Context: HSN 68151900

    Tariff Description:

    • HSN 6815 covers β€œarticles of stone or other mineral substances (including carbon fibres)… not elsewhere specified.”
    • Sub-heading 68151900 specifically refers to other non-electrical articles of graphite or carbon.

    Interpretative Impact:


    Because Heading 6815 is a residuary-style entry (β€œnot elsewhere specified or included”), courts and authorities typically apply the following logic:

    1. Examine whether the product fits a more specific heading first (GRI Rule 1 & 3).
    2. If not, classification may fall under the residual category.
    3. Apply the most akin test where technical similarity is disputed.

    5. Applied Legal Test for Goods under 68151900

    When deciding whether goods belong under 68151900, authorities generally evaluate:

    • Material composition (graphite/carbon vs. other minerals)
    • Functional use (non-electrical vs. electrical components)
    • Manufacturing characteristics
    • Trade understanding / commercial identity

    Only after excluding competing headings should the residuary entry be invoked β€” a well-settled interpretative approach under tariff law.

    6. Consolidated Legal Position

    The governing doctrine may be summarized as follows:

    Classification under Indian customs law is determined primarily by the statutory language of headings read with Section and Chapter Notes, applied through the General Rules for Interpretation; where ambiguity persists, courts adopt the essential character and β€œmost akin” tests before resorting to residuary entries such as HSN 68151900.

    Source: CAAR Ruling, Mumbai Bench

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