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Category: Madras HC

  • Madras High Court held that valuation must be based on the “transaction value” as per Section 14 of the Customs Act

    Madras High Court held that valuation must be based on the “transaction value” as per Section 14 of the Customs Act

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 28.08.2025

    Madras High Court held that valuation must be based on the “transaction value” as per Section 14 of the Customs Act ​ ​ ​ ​ ​ ​ ​

    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 17, 2021, the Hon’ble High Court of Madras delivered a significant judgment in the case of M/s. ​ IG International Private Limited vs. ​ The Deputy Commissioner of Customs & Others (W.P. ​ No. 6033 of 2020). ​ The case revolved around the legality of a Valuation Alert Notice issued by the customs authorities and its impact on the assessment of imported goods. ​ This judgment provides clarity on the scope of valuation alerts under the Customs Act, 1962, and their binding nature on importers and assessing officers.

    Background of the Case

    The petitioner, M/s. IG International Private Limited, challenged the Valuation Alert Notice dated May 8, 2017, issued by the customs authorities. ​ The petitioner argued that the valuation alert was contrary to Section 14 of the Customs Act, 1962, and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. ​ The petitioner contended that the alert interfered with the assessment process by mandating the use of benchmark prices, which forced them to pay higher customs duties on imported apples, a perishable commodity. ​

    The petitioner further argued that the valuation alert was not binding on assessing officers and that the assessment should be based on the “transaction value” declared by the importer unless there were valid reasons to doubt its accuracy.

    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: Madras High Court

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  • Madras High Court Allows STPI Duty Exemption

    Madras High Court Allows STPI Duty Exemption

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 11.07.2025

    Madras High Court Allows STPI Duty Exemption

    In a landmark decision that provides much-needed clarity and relief to the IT and infrastructure sector, the Madras High Court has ruled in favour of Khivraj Tech Park Pvt. Ltd., granting it customs duty exemption for capital goods imported under the Software Technology Park of India (STPI) scheme despite a delayed approval from the Chennai Metropolitan Development Authority (CMDA).

    Case Background

    Khivraj Tech Park Pvt. Ltd., a recognized STPI unit, imported capital goods and claimed customs duty exemption under Notification No. 153/1993-Customs, which is available to STPI units for setting up or expanding infrastructure. However, the customs authorities rejected the exemption, citing that CMDA’s building plan approval was obtained only after the goods had been imported.

    The authorities alleged that the condition of prior CMDA approval was a prerequisite for claiming exemption under the STPI scheme, and hence, the benefits were not admissible.

    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: Madras High Court

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  • Madras High Court Quashes Customs Demand for EODCs Issued After 17 Years

    Madras High Court Quashes Customs Demand for EODCs Issued After 17 Years

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 04.07.2025

    Madras High Court Quashes Customs Demand for EODCs Issued After 17 Years

    The Madras High Court has quashed a Bond Enforcement cum Demand Notice issued by the Customs Department after a 17-year delay, citing it as inordinate and unreasonable. The case, filed by M/s Chemplast Sanmar Ltd., involved non-production of Export Obligation Discharge Certificates (EODCs) under the Advance Authorisation Scheme.

    Background of the Case

    • Petitioner: M/s Chemplast Sanmar Ltd., a star export house and manufacturer of specialty chemicals
    • Period of Dispute: Imports made between 1998 and 2000 under 24 Advance Licences issued by DGFT
    • Customs Action: Issued show cause cum demand notice in 2019β€”17 years later, citing non-submission of EODCs
    • Petitioner’s Defense:
      • Produced EODCs for 13 out of 24 licences
      • Cited inability to retrieve remaining EODCs due to passage of time
      • Argued that such a long delay is unfair and violates principles of natural justice

    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: Madras High Court

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  • Madras HC Affirms DGFT’s Authority on Capital Goods Classification Under EPCG

    Madras HC Affirms DGFT’s Authority on Capital Goods Classification Under EPCG

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 03.07.2025

    Madras HC Affirms DGFT’s Authority on Capital Goods Classification Under EPCG

    The Madras High Court reaffirmed that the Customs Department cannot override the classification of capital goods as determined by the DGFT under the Export Promotion Capital Goods (EPCG) Scheme. The Court held that the customs authorities are bound by the EPCG licence issued by the DGFT unless it has been withdrawn or proved fraudulent.

    Background of the Case

    The appellant, M/s. Adyar Gate Hotel Ltd., imported lighting equipment and fittings in 1999 under an EPCG licence issued by the DGFT, which categorically classified the goods as capital goods. Despite this, the customs authorities denied concessional duty benefit, claiming the goods did not qualify as capital goods under Notification No. 28/97-Cus dated 01.04.1997.

    The case underwent prolonged litigation for over two decades, involving:

    • Denial of concessional duty in 1999.
    • Multiple rounds of appeals before the CESTAT.
    • Remand by the CESTAT following CBEC Circular No. 62/2002, which favoured importers like hotels using goods for rendering services.
    • Refund finally granted in 2018, but interest on delayed refund remained disputed.

    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: Madras High Court

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