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Category: Gujarat High Court

  • Gujarat High Court Strikes Down CBEC Circular Limiting Shipping Bill Amendments

    Gujarat High Court Strikes Down CBEC Circular Limiting Shipping Bill Amendments

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 07.01.2026

    Gujarat High Court Strikes Down CBEC Circular Limiting Shipping Bill Amendments

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.

    The Gujarat High Court recently delivered a significant judgment in the case of Messrs Mahalaxmi Rubtech Ltd. vs. Union of India (R/Special Civil Application No. 21636 of 2019), which has far-reaching implications for exporters and the interpretation of Section 149 of the Customs Act, 1962. This blog delves into the details of the case, the legal arguments presented, and the court’s decision.

    Background of the Case

    Messrs Mahalaxmi Rubtech Ltd., a company engaged in manufacturing and exporting rubber printing blankets, filed a writ application under Article 226 of the Constitution of India. ​ The company sought relief against the rejection of its request to amend 41 shipping bills to claim duty drawback benefits under Section 149 of the Customs Act, 1962. The rejection was based on CBEC Circular No. ​ 36/2010, which prescribes a three-month time limit for requesting amendments to shipping bills. ​

    The company argued that the goods were exported between October 2017 and November 2018, but due to a misunderstanding regarding the eligibility of duty drawback under the Export Promotion Capital Goods (EPCG) scheme, the claim for drawback was not declared on the export documents. Upon realizing that duty drawback was permissible, the company requested amendments to the shipping bills in January 2019 and July 2019. However, the Principal Commissioner of Customs rejected the request, citing the three-month time limit imposed by the CBEC circular. ​

    Key Legal Arguments

    1. Ultra Vires CBEC Circular: The petitioner argued that the three-month time limit prescribed in CBEC Circular No. ​ 36/2010 was ultra vires Section 149 of the Customs Act, 1962. ​ Section 149 allows amendments to shipping bills based on documentary evidence that existed at the time of export but does not specify any time limit for such amendments. ​ The petitioner contended that the CBEC lacked the authority to impose a time limit through a circular, as it was not prescribed by the Customs Act. ​
    2. Violation of Constitutional Rights: The petitioner further argued that the circular violated Articles 14 and 19(1)(g) of the Constitution of India. ​ Article 14 guarantees equality before the law, while Article 19(1)(g) protects the right to practice any profession or carry on any occupation, trade, or business. ​
    3. Legitimate Export Benefits Denied: The petitioner emphasized that the denial of duty drawback benefits was unjust, as the goods were exported in compliance with customs procedures, and the necessary documentary evidence was available at the time of export. ​
    4. Precedents from Other High Courts: The petitioner referred to judgments from other High Courts, including the Delhi High Court’s decision in M/s. ​ Kedia Agencies Pvt. ​ Ltd. vs. Commissioner of Customs, which held that amendments to shipping bills should be allowed if documentary evidence existed at the time of export. ​

    Respondents’ Arguments ​

    The respondents, represented by learned Standing Counsel, opposed the writ application, arguing that the CBEC circular was valid and binding. They cited the Delhi High Court’s judgment in M/s. ​ Terra Films Pvt. ​ Ltd., which held that requests for conversion of shipping bills after a long period could not be entertained due to the impossibility of verifying the goods. ​

    Court’s Analysis and Judgment

    The Gujarat High Court carefully analyzed the provisions of Section 149 of the Customs Act, the CBEC circular, and relevant case laws. ​ The court made the following observations:

    1. No Time Limit in Section 149: The court agreed with the petitioner that Section 149 does not prescribe any time limit for amending shipping bills. ​ The CBEC circular’s imposition of a three-month time limit was deemed ultra vires Section 149. ​
    2. Amendments Based on Documentary Evidence: Section 149 allows amendments to shipping bills if documentary evidence existed at the time of export. ​ In the present case, the necessary export documents were available, and the claim for duty drawback at the All Industry Rate (AIR) did not require physical verification of goods. ​
    3. Distinction Between Brand Rate and All Industry Rate: The court distinguished the present case from M/s. Terra Films Pvt. ​ Ltd., where the claim was for a brand rate of drawback requiring physical verification of goods. ​ In contrast, the petitioner sought duty drawback at the AIR, which is calculated based on existing export documents.
    4. Violation of Constitutional Rights: The court held that the circular violated Articles 14 and 19(1)(g) of the Constitution, as it imposed an arbitrary restriction on the petitioner’s right to claim legitimate export benefits. ​
    5. Precedents Supporting the Petitioner: The court referred to judgments in M/s. ​ Kedia Agencies Pvt. ​ Ltd. and Messrs Gokul Overseas vs. Union of India, which supported the petitioner’s case and emphasized the need for a progressive interpretation of laws to benefit exporters. ​

    Final Decision

    The Gujarat High Court declared that the three-month time limit prescribed in CBEC Circular No. ​ 36/2010 was ultra vires Section 149 of the Customs Act and Articles 14 and 19(1)(g) of the Constitution. ​ The court quashed the Principal Commissioner’s order and directed the respondents to pay the petitioner the duty drawback amount of Rs. ​ 11,18,458 along with statutory interest under Rule 14 of the Drawback Rules within four weeks. ​

    Implications of the Judgment

    This landmark judgment has significant implications for exporters and the interpretation of customs laws:

    1. Clarity on Section 149: The judgment reinforces that Section 149 does not impose a time limit for amending shipping bills, allowing exporters to claim legitimate benefits even after the three-month period prescribed by CBEC circulars. ​
    2. Protection of Exporters’ Rights: The court’s decision upholds the constitutional rights of exporters, ensuring that procedural restrictions do not unjustly deny them their rightful benefits.
    3. Impact on CBEC Circulars: The judgment sets a precedent for challenging CBEC circulars that impose restrictions beyond the scope of the Customs Act. ​
    4. Encouragement for Exporters: By adopting a progressive interpretation of the law, the court has sent a positive message to exporters, encouraging them to seek redressal for genuine grievances.

    Conclusion

    The Gujarat High Court’s judgment in Messrs Mahalaxmi Rubtech Ltd. is a significant step toward ensuring fairness and justice for exporters. It highlights the importance of adhering to statutory provisions and protecting constitutional rights. This case serves as a reminder that procedural restrictions should not override substantive rights, and exporters should be encouraged to claim legitimate benefits under the law.

    Source: Gujarat High Court

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  • High Court of Gujarat Upholds Customs Duty Exemption for Inshell Walnuts Under DFIA Scheme

    High Court of Gujarat Upholds Customs Duty Exemption for Inshell Walnuts Under DFIA Scheme

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 31.12.2025

    High Court of Gujarat Upholds Customs Duty Exemption for Inshell Walnuts Under DFIA Scheme

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.​ ​ ​

    On December 24, 2025, the High Court of Gujarat delivered a significant judgment in the case of The Commissioner of Customs – Kandla vs. M/s Devam Impex (R/Tax Appeal No. ​ 507 of 2025). ​ The case revolved around the applicability of Customs Notification No. ​ 25/2023-Cus dated April 1, 2023, which provides exemptions from Basic Customs Duty on imports under Transferable Duty-Free Import Authorizations (DFIAs). ​ The court upheld the ruling of the Customs Authority for Advance Rulings (CAAR), allowing M/s Devam Impex to import “Inshell Walnuts” under the DFIA scheme.

    Background of the Case

    M/s Devam Impex, a proprietorship firm holding a valid Importer-Exporter Code (IEC), applied for an Advance Ruling under Section 28H of the Customs Act, 1962. ​ The firm sought clarity on whether “Inshell Walnuts” could be imported under the DFIA scheme by availing the exemption provided in Notification No. ​ 25/2023-Cus. The DFIA was issued in line with Paragraph Nos. 4.24 and 4.26 of the Foreign Trade Policy (FTP) and was based on Standard Input Output Norms (SION) E-1 for Assorted Confectionary Products and SION E-5 for Biscuits. ​

    The CAAR ruled in favor of M/s Devam Impex, stating that “Inshell Walnuts” are permissible for import under the DFIA scheme as they fall under the description of “Other Confectionery Ingredients” and “Dietary Fibre” in the DFIA license. ​ The ruling was challenged by the Commissioner of Customs – Kandla, leading to the present appeal before the High Court of Gujarat.

    Key Issues Raised in the Appeal ​

    The appellant, represented by Senior Standing Counsel, argued that the CAAR’s ruling was erroneous for the following reasons:

    1. Misclassification of Walnuts: The appellant contended that “Inshell Walnuts” could not be classified as “Dietary Fibre” under SION E-5, as dietary fibre typically refers to cellulose or pectin-based roughage used in biscuit formulation, not high-fat nuts composed of oils and proteins. ​
    2. Absence of Specific Endorsement: The appellant argued that the exemption was granted despite the absence of specific endorsement of the Harmonized System (HS) Code for “Inshell Walnuts” in the DFIA license. ​
    3. Technical Usage: The appellant claimed that the actual technical usage of “Inshell Walnuts” in the exported products was not established, which is a requirement under Paragraph No. ​ 4.12 of the FTP and the conditions of the Notification. ​
    4. Circulars and Public Notices: The appellant referred to DGFT’s Public Notice No. ​ 20/2025-26, which suspended SION norms in the food sector, including SION E-1 and SION E-5, arguing that the legal basis for the CAAR ruling was no longer valid. ​

    Respondent’s Defense

    The respondent, represented by Senior Advocate, countered the appellant’s arguments with the following points:

    1. Legal Precedent: The respondent relied on the Bombay High Court’s judgment in The Commissioner of Customs, Nhava Sheva-V vs. VKC Nuts Private Limited (2022), which affirmed that walnuts, including inshell walnuts, fall within the broader classification of “Dietary Fibre” for DFIA entries. ​
    2. Circular Clarifications: The respondent referred to CBIC Circular No. ​ 20/2025-Cus dated July 24, 2025, which clarified that correlation between technical characteristics, quality, or specifications of inputs used in export products and those imported under DFIA is not required, except for inputs specified under Paragraph No. ​ 4.29 of the FTP. “Inshell Walnuts” are not listed under Paragraph No. 4.29, making the correlation unnecessary.
    3. Technical Opinion: The respondent highlighted the technical opinion of the Joint Director, Jawahar Customs House Laboratory, which confirmed that walnuts could be used as a source of dietary fibre in the manufacture of biscuits and confectionery. ​
    4. DFIA License Validity: The respondent argued that the DFIA license issued to them permits the import of goods described as “Other Confectionery Ingredients” and “Dietary Fibre,” and the absence of a specific HS Code does not invalidate the import. ​

    High Court’s Analysis and Judgment

    The High Court of Gujarat thoroughly analyzed the arguments presented by both parties and referred to various legal precedents, including the Bombay High Court’s judgment in VKC Nuts Private Limited and decisions by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT). ​ The court noted the following:

    1. Legal Precedent: The Bombay High Court had already ruled that “Inshell Walnuts” are covered under the description of “Dietary Fibre” and can be imported duty-free under the DFIA scheme. ​ The technical opinion supporting this classification was not refuted by the appellant. ​
    2. Clarificatory Circular: The CBIC Circular No. ​ 20/2025-Cus clarified that correlation of technical characteristics, quality, and specifications is not required for inputs not listed under Paragraph No. ​ 4.29 of the FTP. This further supported the respondent’s case. ​
    3. Restricted Scope of Appeal: The court emphasized that the scope of appeal under Section 28KA of the Customs Act, 1962, is limited to cases where the ruling of the authority is profoundly illegal, arbitrary, or unreasonable. ​ The court found no such issues in the CAAR’s ruling. ​
    4. Dismissal of Appeal: The court concluded that the proposed questions of law had already been answered by existing legal precedents and dismissed the appeal. ​ The civil application was also disposed of. ​

    Conclusion

    The High Court’s judgment in favor of M/s Devam Impex reinforces the importance of legal precedents and clarificatory circulars in resolving disputes related to customs duty exemptions. The case highlights the complexities of interpreting exemption notifications and the significance of technical opinions in determining the classification of imported goods. ​ By upholding the CAAR’s ruling, the court has provided clarity and certainty to importers and exporters operating under the DFIA scheme, ensuring compliance with the Foreign Trade Policy while facilitating trade.

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    Source: Gujarat High Court

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  • Gujarat High Court Quashes DRI Seizure of Imported Distillate Oil

    Gujarat High Court Quashes DRI Seizure of Imported Distillate Oil

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 22.12.2025

    Gujarat High Court Quashes DRI Seizure of Imported Distillate Oil

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.​​​ ​

    In a significant ruling, the High Court of Gujarat at Ahmedabad has delivered a judgment in favor of Noya Infrastructure LLP and other petitioners, quashing the seizure memos issued by the Directorate of Revenue Intelligence (DRI) regarding the detention of imported bulk liquid cargo of Distillate Oil. ​ The judgment, delivered on December 9, 2025, by Honourable Justice, marks a pivotal moment in the interpretation of Indian Standards for petroleum products and the application of the “most akin” test for classification under the Customs Tariff Act, 1975. ​

    Background of the Case

    The petitioners, including Noya Infrastructure LLP, Sweven Impex, and One Chemical Company, are engaged in the trading and import of industrial oils, including Distillate Oil. The case arose when the DRI seized their imported cargo of Distillate Oil at Pipavav Port, Amreli, Gujarat, citing a Test Report dated September 30, 2025, which claimed that the samples did not meet the requirements of Distillate Oil as per IS 16731:2019. ​ The report also stated that the samples had characteristics of diesel fraction with a small amount of heavier hydrocarbons, leading to allegations of mis-declaration during import. ​

    The petitioners challenged the seizure, arguing that the Test Report was inconclusive and that similar cargo detained at Kandla Port had been provisionally released based on expert opinions from the Central Revenues Control Laboratory (CRCL). They contended that the ambiguity in the test results and the lack of definitive conclusions should operate in their favor, as per the “most akin” test established by the Supreme Court in the case of Gastrade International vs. Commissioner of Customs, Kandla. ​

    Key Issues in the Case

    The court analyzed the following key issues:

    1. Cloud Point Parameter: The Test Report indicated that the cloud point of the petitioners’ cargo did not meet the specified value of -16Β°C, as it was recorded at -6.2Β°C and -5.4Β°C. ​ However, the court noted that the relevance of the cloud point depends on the climatic conditions and the intended use of the fuel, as clarified by the CRCL in a similar case at Kandla Port. ​
    2. Diesel Fraction Characteristics: The Test Report stated that the samples had characteristics of diesel fraction with a small amount of heavier hydrocarbons. ​ However, the court observed that the report did not definitively conclude that the cargo was diesel, and similar findings in the Kandla case had led to the release of the cargo. ​
    3. Application of the “Most Akin” Test: The court emphasized the importance of the “most akin” test for classification, as established by the Supreme Court. ​ It held that the ambiguity in the test results and the lack of definitive conclusions meant that the cargo should be classified as Distillate Oil, as it bore the closest resemblance to this category. ​

    The Court’s Decision ​

    After a detailed analysis of the facts, test results, and expert opinions, the High Court ruled in favor of the petitioners. The court quashed the seizure memos issued by the DRI and directed the authorities to release the detained cargo of Distillate Oil stored at Pipavav Port. ​ The court also instructed the petitioners to file an end-use certificate with the Customs authorities, as was done in the Kandla case. ​

    Implications of the Judgment

    This landmark judgment has significant implications for the import and classification of petroleum products in India. It reinforces the importance of applying the “most akin” test for classification under the Customs Tariff Act, ensuring that ambiguity in test results does not unfairly penalize importers. ​ Additionally, the ruling highlights the need for consistency in the treatment of similar cases across different ports and authorities.

    The judgment also underscores the importance of expert opinions and scientific analysis in determining the classification of goods. By relying on the CRCL’s clarification and the Supreme Court’s precedent, the High Court has set a strong example of fair and transparent adjudication in cases involving complex technical parameters.

    Conclusion

    The High Court of Gujarat’s decision to quash the seizure of Distillate Oil is a victory for the petitioners and a step forward in ensuring fairness in the import and trade of petroleum products. This judgment not only provides relief to the petitioners but also sets a precedent for future cases involving similar disputes. It serves as a reminder that regulatory authorities must base their actions on clear and definitive evidence, and that ambiguity should not lead to unjust penalties for businesses.

    Source: Gujarat High Court

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  • Gujarat High Court Sets Aside Adjudicating Authority’s Order for Non-Compliance with Section 138-B of Customs Act, 1962

    Gujarat High Court Sets Aside Adjudicating Authority’s Order for Non-Compliance with Section 138-B of Customs Act, 1962

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 17.12.2025

    Gujarat High Court Sets Aside Adjudicating Authority’s Order for Non-Compliance with Section 138-B of Customs Act, 1962 ​

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.​​

    In a significant judgment, the Gujarat High Court, comprising Honourable Justice, has set aside the impugned order dated 18.03.2025, passed by the adjudicating authority (Respondent No.2), in the case of M/S Mitesh Impex & Ors. ​ vs Union of India & Anr. ​ The court has directed a fresh adjudication of the matter, emphasizing the importance of adhering to the principles of natural justice and the provisions of Section 138-B of the Customs Act, 1962. ​

    Background of the Case

    The petitioners, M/S Mitesh Impex & Ors., challenged the impugned order on the grounds that it was passed in defiance of the directions issued by the Central Excise and Service Tax Appellate Tribunal, West Zonal Bench at Ahmedabad. ​ The Tribunal, in its order dated 13.03.2023, had remanded the matter to the adjudicating authority, directing it to grant the petitioners an opportunity to cross-examine six witnesses whose statements were relied upon in the original adjudication. ​

    The petitioners argued that the adjudicating authority ignored the statements of three witnesses who had deposed in their favor after cross-examination, while relying on the statements of three other witnesses who were not cross-examined in the first round of adjudication. ​ The petitioners contended that this approach violated the principles of natural justice and the directions of the Tribunal. ​

    Key Legal Issues

    The case revolved around the interpretation and application of Section 138-B of the Customs Act, 1962, which deals with the relevancy of statements made during the course of inquiry or proceedings under the Act. ​ The provision outlines two scenarios under which such statements can be considered relevant:

    1. Clause (a): Statements made by witnesses who are unavailable due to death, incapacity, or other reasonable circumstances can be treated as relevant, provided the adjudicating authority records findings on the non-availability of the witness and offers the assessee an opportunity to respond to the statement. ​
    2. Clause (b): Statements made by witnesses who are available for cross-examination can be admitted in evidence in the interest of justice, provided the assessee is given an opportunity to cross-examine the witness. ​

    The petitioners argued that the adjudicating authority failed to comply with these provisions, as it relied on the statements of witnesses who were not cross-examined, while ignoring the evidence of witnesses who had deposed in their favor. ​

    Observations of the Court ​

    The Gujarat High Court carefully examined the impugned order and the provisions of Section 138-B of the Customs Act, 1962. The court noted the following:

    1. The adjudicating authority had relied on the statements of three witnesses who did not appear for cross-examination, despite being given four opportunities to do so. ​ These statements were recorded during the first round of adjudication, where the petitioners were not granted the opportunity to cross-examine the witnesses. ​
    2. The adjudicating authority ignored the evidence of three witnesses who had appeared and deposed in favor of the petitioners after cross-examination. ​
    3. The adjudicating authority failed to record findings on the non-availability of the three witnesses who did not appear for cross-examination, as required under clause (a) of Section 138-B. ​

    The court emphasized that the principles of natural justice require that the statements of witnesses cannot be used against an assessee unless they are given an opportunity to cross-examine the witnesses and respond to their statements. ​ The court also highlighted that the adjudicating authority must record reasons and findings based on the evidence and corroborative material before arriving at a decision. ​

    Court’s Decision ​

    The Gujarat High Court held that the adjudicating authority had not fully complied with the directions issued by the Tribunal. ​ While the Tribunal had remanded the matter to provide an opportunity for cross-examination, the adjudicating authority failed to properly consider the evidence of all six witnesses in accordance with Section 138-B of the Customs Act, 1962. ​

    The court quashed the impugned order and remanded the matter back to the adjudicating authority for fresh adjudication. ​ The court directed the authority to pass an appropriate order within 12 weeks, taking into account the evidence of all witnesses and adhering to the principles of natural justice. The court also clarified that it was not expressing any opinion on the merits of the case, leaving all rights and contentions of the parties open. ​

    Conclusion

    This judgment underscores the importance of adhering to procedural fairness and the principles of natural justice in adjudication processes under the Customs Act, 1962. The Gujarat High Court’s decision serves as a reminder to adjudicating authorities to ensure that the rights of the assessee are protected, particularly with regard to the opportunity for cross-examination of witnesses. ​ By remanding the matter for fresh adjudication, the court has reinforced the need for a fair and transparent process in cases involving penalties under the Customs Act.

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    Source: Gujarat High Court

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  • High Court of Gujarat Quashes Public Notice Mandating Import Permit for Acrylonitrile

    High Court of Gujarat Quashes Public Notice Mandating Import Permit for Acrylonitrile

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 04.12.2025

    High Court of Gujarat Quashes Public Notice Mandating Import Permit for Acrylonitrile

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.​  β€‹

    In a landmark judgment delivered on November 19, 2025, the High Court of Gujarat at Ahmedabad, comprising Honorable Justice, ruled in favor of APCOTEX Industries Ltd., quashing the Public Notice F. No. 04-01/2022-CIR-I dated February 17, 2022. ​ This decision has significant implications for industries importing Acrylonitrile for non-insecticidal purposes. ​

    Background of the Case

    APCOTEX Industries Ltd., a leading manufacturer of synthetic rubbers, filed a writ petition challenging the mandatory requirement of an import permit for Acrylonitrile, a key raw material used in their production process. The petitioners argued that Acrylonitrile, classified under Tariff Item 29261000, is imported for non-insecticidal purposes and should be exempt from the provisions of the Insecticides Act, 1968, as per Section 38 of the Act. ​

    The dispute arose from the Public Notice issued by respondent no. ​ 7, which mandated import permits for Acrylonitrile, even for non-insecticidal use. ​ APCOTEX contended that this notice contradicted the exemptions provided under Section 38 of the Act, which clearly states that substances intended for non-insecticidal purposes are not subject to the Act’s provisions. ​

    Key Arguments

    The petitioners relied on the Kerala High Court’s decision in The Deputy Commissioner of Customs (Gr.VII), Cochin v. M. Chandrasekhar, Chennai, which held that substances used for non-insecticidal purposes are exempt from import permit requirements under the Insecticides Act. ​ They further argued that the end-use bond submitted to the authorities ensures compliance with non-insecticidal usage, making the import permit redundant. ​

    On the other hand, the respondents defended the Public Notice, asserting that registration and import permits are mandatory under Sections 9 and 38 of the Act, regardless of the intended use. ​

    Court’s Observations

    After hearing both parties, the Court examined the provisions of the Insecticides Act, 1968, particularly Sections 9 and 38. ​ It noted that Section 38 explicitly exempts substances intended for non-insecticidal purposes from the Act’s requirements. ​ The Court emphasized that Acrylonitrile, used by APCOTEX for manufacturing synthetic rubbers, falls under this exemption.

    The judgment also referred to the Kerala High Court’s ruling, which supported the petitioners’ stance. ​ Furthermore, the Court highlighted that no notification or rule mandates import permits for Acrylonitrile under the latest Foreign Trade Policy. ​

    Judgment

    The High Court quashed the Public Notice dated February 17, 2022, to the extent it applied to Acrylonitrile imported for non-insecticidal purposes. ​ It ruled that the requirement for an import permit was contrary to the exemptions provided under Section 38 of the Insecticides Act, 1968. ​ The Court made the rule absolute, allowing APCOTEX Industries Ltd. and other petitioners to import Acrylonitrile without the need for an import permit. ​

    Implications of the Judgment

    This decision is a significant relief for industries relying on Acrylonitrile as a raw material for non-insecticidal purposes. ​ It reinforces the principle that exemptions under Section 38 of the Insecticides Act must be respected, ensuring smoother import processes for substances used in manufacturing. ​

    The judgment also sets a precedent for similar cases, providing clarity on the application of the Insecticides Act to non-insecticidal imports. ​ It underscores the importance of aligning administrative decisions with legislative intent, preventing unnecessary regulatory hurdles for businesses.

    Conclusion

    The High Court of Gujarat’s ruling is a victory for manufacturers and importers, safeguarding their rights under the law. By quashing the Public Notice, the Court has upheld the principle of exemption for non-insecticidal imports, paving the way for a more streamlined and business-friendly regulatory environment.

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    Source: Gujarat High Court

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  • Gujarat High Court Rules in Favor of Shah Paperplast Industries Ltd. in (ITC) GST Refund for EOU Unit

    Gujarat High Court Rules in Favor of Shah Paperplast Industries Ltd. in (ITC) GST Refund for EOU Unit

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 02.12.2025

    Gujarat High Court Rules in Favor of Shah Paperplast Industries Ltd. in (ITC) GST Refund for EOU Unit

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    In a landmark judgment, the Gujarat High Court has ruled in favor of Shah Paperplast Industries Ltd. & Anr., granting them relief in a long-standing dispute over GST refund claims. The case revolved around the denial and withdrawal of refunds for unutilized input tax credit (ITC) under the Central Goods and Services Tax Act, 2017 (GST Act) and related rules. ​ The judgment, delivered by Honourable Justice, has set a significant precedent for exporters and businesses operating as 100% Export Oriented Units (EOUs). ​

    Background of the Case

    Shah Paperplast Industries Ltd., a 100% Export Oriented Unit (EOU), is engaged in the manufacture and export of tissue paper, wrapping paper, and disposable plastic products. ​ The company had filed refund applications under Section 54(3) of the GST Act, claiming refunds for unutilized ITC on zero-rated supplies made without payment of tax. ​ However, the Central Board of Indirect Taxes and Customs (CBIC) issued Circular No. ​ 172/04/2022-GST on July 6, 2022, which stated that tax paid on deemed exports would not be considered as ITC for calculating refunds under Rule 89(4) or Rule 89(5) of the GST Rules. ​

    Following this circular, the Assistant Commissioner of Central GST & Excise, Vadodara-I, issued show-cause notices to Shah Paperplast Industries Ltd., seeking to withdraw the refunds already granted for the period from December 2021 to March 2022. The company challenged the circular and the subsequent orders, arguing that the circular was ultra vires to the GST Act and should not be applied retrospectively. ​

    Key Issues Addressed by the Court

    The court addressed several critical questions in this case:

    1. Was the refund claim rightly disallowed due to the petitioners not filing under Rule 89(4A)? ​ The court ruled that the petitioners were not deemed exporters but actual exporters of goods, making them eligible for refunds under Section 54(3) of the GST Act and Rule 89(4) of the GST Rules. ​ The court clarified that Rule 89(4A) was not applicable to the petitioners as their suppliers did not claim deemed export benefits. ​
    2. Could the circular be applied retrospectively? ​ The court found that the circular was clarificatory in nature and did not apply to the petitioners’ case. ​ Therefore, the question of retrospective application was not addressed in detail. ​
    3. Were the respondents justified in reviewing the refund sanction orders and issuing notices under Section 73 of the GST Act? ​ The court deemed this issue academic, as it had already ruled in favor of the petitioners on the merits of the case.

    Court’s Decision

    The Gujarat High Court quashed all orders and notices issued by the respondents to withdraw or reject the refund claims of Shah Paperplast Industries Ltd. ​ The court directed the respondents to process and pay the refund claims within 12 weeks from the date of the judgment. ​ The court also rejected the respondents’ request to stay the judgment. ​

    Implications of the Judgment

    This ruling is a significant win for exporters and EOUs, as it reinforces their entitlement to claim refunds for unutilized ITC on zero-rated supplies made without payment of tax. ​ The judgment also clarifies the scope of deemed exports under the GST Act and the applicability of Circular No. 172/04/2022-GST. Businesses can now rely on this precedent to challenge any unjust denial or withdrawal of GST refunds.

    Conclusion

    The Gujarat High Court’s decision in favor of Shah Paperplast Industries Ltd. is a testament to the judiciary’s role in upholding the rights of businesses under the GST framework. It provides clarity on the treatment of deemed exports and zero-rated supplies, ensuring that exporters can claim their rightful refunds without undue interference. ​ This case serves as a reminder of the importance of adhering to the provisions of the GST Act and the need for fair and transparent implementation of tax laws.

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    Source: Gujarat High Court

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  • Gujarat High Court Invalidates DRI Notice on Customs Duty for Crude Palm Kernel Oil Imports

    Gujarat High Court Invalidates DRI Notice on Customs Duty for Crude Palm Kernel Oil Imports

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 25.11.2025

    Gujarat High Court Invalidates DRI Notice on Customs Duty for Crude Palm Kernel Oil Imports

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    In a landmark judgment, the High Court of Gujarat has quashed a show cause notice issued by the Directorate of Revenue Intelligence (DRI) against VVF India Ltd & Anr., marking a significant decision in the realm of customs duty exemptions and the interpretation of exemption notifications. ​

    Background of the Case

    The case revolved around the import of “crude palm kernel oil edible grade” by VVF India Ltd, a company engaged in manufacturing personal care products such as soaps, fatty acids, and fatty alcohols. The company had been availing the benefit of concessional customs duty under Serial No. ​ 57 of Customs Notification No. ​ 12/2012, which provides for a reduced or nil rate of duty on “all goods, crude and edible grade” under specific tariff headings. ​

    However, the DRI issued a show cause notice on June 27, 2013, alleging that the imported crude palm kernel oil was not fit for human consumption without further processing and refining. ​ The notice claimed that the goods should be classified under a different tariff heading (CTH 15132110) and subjected to a 100% customs duty instead of the concessional rate. ​

    Key Arguments

    Petitioners’ Submissions:

    1. Challenge to Circular No. ​ 40/2001-CUS: The petitioners argued that the show cause notice was based on Circular No. ​ 40/2001-CUS, which had been quashed by the Gujarat High Court in the case of Intercontinental (India) v. Union of India and upheld by the Supreme Court. ​ The circular had sought to impose an end-use condition on exemption notifications, which was deemed unlawful. ​
    2. Edible Grade Definition: The petitioners contended that the crude palm kernel oil imported by them met the standards of “edible grade” as per the Prevention of Food Adulteration Rules, 1955 and the Food Safety and Standards (Food Products and Food Additives) Regulations, 2011. ​ They argued that the exemption notification did not require the oil to be fit for immediate human consumption, but only to meet the criteria for “edible grade.” ​
    3. Past Practice: The petitioners highlighted that they had been availing the exemption for years without any objections from the authorities, and the sudden issuance of the show cause notice was unjustified. ​

    Respondents’ Submissions:

    1. End-Use Condition: The respondents argued that the exemption notification implicitly required the imported oil to be used for edible purposes, and since the crude palm kernel oil was imported for industrial use, it did not qualify for the concessional rate. ​
    2. Misdeclaration Allegations: The respondents claimed that the petitioners had misdeclared the description of the imported goods to avail the exemption. ​

    The Court’s Analysis and Judgment

    The Court, led by Honourable Justice, delved into the legal provisions of the Customs Act, 1962, the Prevention of Food Adulteration Rules, 1955, and the Food Safety and Standards Regulations, 2011. The Court observed the following:

    1. No End-Use Condition in Notification: The exemption notification did not stipulate any condition regarding the end-use of the imported goods. ​ The Court reiterated that a circular cannot impose conditions that are not explicitly mentioned in the notification, as this would amount to rewriting the law. ​
    2. Edible Grade vs. Edible Oil: The Court clarified that “edible grade” refers to the quality of the oil as per prescribed standards, and it is distinct from “edible oil,” which is fit for immediate human consumption. ​ The crude palm kernel oil imported by the petitioners met the criteria for “edible grade” and was therefore eligible for the concessional rate. ​
    3. Precedents and Legal Principles: The Court relied on previous judgments, including Intercontinental (India) v. Union of India and Supreme Oil Industries Limited v. Special Secretary, Finance (Taxation) Department, Government of West Bengal, to emphasize that exemption notifications must be interpreted based on their plain language without reading additional conditions into them. ​

    Conclusion

    The High Court concluded that the show cause notice issued by the DRI was without jurisdiction and based on an invalid circular. ​ It held that the crude palm kernel oil edible grade imported by the petitioners was entitled to the benefit of the exemption notification, regardless of its end-use. ​ The Court quashed the show cause notice and ruled in favor of the petitioners. ​

    Implications of the Judgment

    This judgment reinforces the principle that exemption notifications under the Customs Act must be interpreted strictly based on their language, without imposing additional conditions through circulars or other means. ​ It also highlights the distinction between “edible grade” and “edible oil,” providing clarity for importers and customs authorities alike. ​

    The decision is a significant win for businesses importing crude edible grade oils for industrial purposes, as it ensures that they can continue to avail concessional duty rates without being subjected to unwarranted conditions. ​ It also serves as a reminder to authorities to adhere to the legal framework and avoid overstepping their jurisdiction. ​

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    Source: Gujarat High Court

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  • Gujarat High Court Ruled that the DEPB license was valid at the time of import

    Gujarat High Court Ruled that the DEPB license was valid at the time of import

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 15.09.2025

    Gujarat High Court Ruled that the DEPB license was valid at the time of import​ ​ ​ Β 

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    The Gujarat High Court recently delivered a significant judgment in the case of Commissioner of Customs vs. Binani Cement Ltd., shedding light on the interplay between fraud, customs duty liability, and the extended period of limitation under Section 28 of the Customs Act, 1962. This case serves as an important precedent for importers, exporters, and legal professionals navigating the complexities of customs law.

    Case Background

    The dispute arose when M/s Beni Exports obtained a Duty Entitlement Pass Book (DEPB) license in 2000, valued at Rs. ​ 94,56,252/-. Investigations revealed that the license was fraudulently obtained by manipulating export documents. ​ Consequently, the Director General of Foreign Trade (DGFT) canceled the license on October 24, 2001. ​ However, before the cancellation, M/s Beni Exports had transferred the license to Binani Cement Ltd., which used it to import goods exempted from customs duty under Notification No. ​ 34/97-Cus dated April 7, 1997. ​ The Commissioner of Customs argued that since the license was invalidated due to fraud, the imports made using the license were liable for customs duty. ​ The department sought to recover the duty by invoking the extended limitation period under Section 28 of the Customs Act, which allows recovery within five years in cases involving collusion, willful misstatement, or suppression of facts.

    Source: Gujarat High Court

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  • Gujarat High Court allows IGST Refund against Advance Authorization Exports says Rule 96(10) removed for good

    Gujarat High Court allows IGST Refund against Advance Authorization Exports says Rule 96(10) removed for good

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 21.08.2025

    Gujarat High Court allows IGST Refund against Advance Authorization Exports says Rule 96(10) removed for good ​ ​ ​ ​ ​ ​

    The Gujarat High Court recently delivered a significant judgment addressing the omission of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017, and its implications for exporters seeking refunds of Integrated Goods and Services Tax (IGST) paid on exports. This ruling has far-reaching consequences for businesses engaged in international trade and clarifies the legal position on pending refund claims.

    Background of Rule 96(10)

    Rule 96(10) of the CGST Rules was introduced to restrict exporters from claiming refunds of IGST paid on exports if they availed benefits under certain exemption notifications for duty-free procurement of inputs. ​ This rule aimed to prevent exporters from enjoying “double benefits”β€”duty-free procurement and IGST refunds. ​ However, exporters faced significant challenges due to this restriction, especially when only a small portion of their inputs were procured duty-free.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: Gujarat High Court

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