Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 22.09.2026
Andhra Pradesh HC Grants Bail as Charge Sheet Not Filed Even After 180 Days
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 Andhra Pradesh High Court has granted bail to an accused in an NDPS case involving an alleged 59.160 kg of ganja, taking note of his 201 days of judicial custody, substantial completion of investigation, absence of adverse antecedents, and the fact that the charge sheet had not been filed even after expiry of the statutory period of 180 days.
The order was passed by Dr. Justice Y. Lakshmana Rao in Pawan Kumar Yadav v. State of Andhra Pradesh, Criminal Petition No. 7886 of 2026, on September 21, 2026.
Bail Sought in Commercial Quantity NDPS Case
The petitioner, Pawan Kumar Yadav, arrayed as Accused No. 4, approached the High Court under Sections 480 and 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) seeking bail in Crime No. 41 of 2026 registered at Gokavaram Police Station, East Godavari District.
The case was registered for alleged offences punishable under Section 8(c) read with Section 20(b)(ii)(C) of the Narcotic Drugs and Psychotropic Substances Act, 1985.
The Court recorded that the allegation against the petitioner concerned involvement in dealing with 59.160 kg of ganja, which constituted a commercial quantity.
Petitioner Claimed False Implication
Counsel for the petitioner contended that Pawan Kumar Yadav was innocent and had been falsely implicated by the police. It was further submitted that he was the sole earning member of his family and that his continued incarceration would cause undue hardship to his dependants.
The petitioner also undertook to comply with any conditions imposed by the High Court if released on bail.
State Opposed Bail
The prosecution strongly opposed the application, arguing that the investigation was still underway and that several material witnesses remained to be examined.
The Assistant Public Prosecutor contended that releasing the petitioner at that stage could create a risk of his absconding, thereby affecting the ongoing investigation and the process of law.
201 Days in Custody, But No Charge Sheet
A significant factor considered by the High Court was the length of the petitioner’s incarceration.
The petitioner had been arrested on March 4, 2026 and had remained in judicial custody for 201 days by the time the bail petition was considered.
The Court specifically recorded that although a substantial part of the investigation concerning the petitioner’s alleged role had been completed, the charge sheet had not been filed even after expiry of the statutory period of 180 days.
The Court further noted that:
no application seeking custodial interrogation of the petitioner had been filed;
the period for filing such an application had expired;
no application seeking extension of the period of judicial custody had been filed; and
no adverse antecedents had been reported against the petitioner.
Rajasthan Residence Not Sufficient to Deny Bail
The petitioner was a permanent resident of Rajasthan. Nevertheless, the High Court observed that he had a fixed abode and considered that stringent bail conditions could adequately address the prosecution’s apprehensions.
The Court found that, if released subject to such conditions, there was no likelihood of the petitioner absconding, threatening witnesses, tampering with evidence or hampering the further investigation.
High Court Grants Bail With Stringent Conditions
Considering the facts and circumstances, nature and gravity of the allegations, period of incarceration and stage of investigation, the High Court held that the petitioner could be enlarged on bail subject to stringent conditions.
The Court accordingly allowed the criminal petition and directed his release on a βΉ50,000 bond with two sureties for the like amount each, to the satisfaction of the I Additional Judicial Magistrate of First Class, Rajamahendravaram.
The petitioner was also directed to appear before the concerned Station House Officer every Saturday between 10:00 AM and 5:00 PM until filing of the charge sheet, and not to leave the district without prior permission of the SHO.
He must cooperate with further investigation, make himself available for interrogation when required, refrain from influencing or threatening persons acquainted with the case, and surrender his passport, if any. If he does not possess a passport, he must furnish an affidavit to that effect.
Why the Decision Is Significant
The order is notable because the alleged quantity of ganja was expressly recorded as commercial quantity, yet the High Court considered the prolonged custody and procedural status of the investigation while deciding the bail application.
The particularly important factual circumstances recorded by the Court were the petitioner’s 201-day incarceration, failure to file the charge sheet after expiry of the 180-day period, substantial completion of investigation concerning his alleged role, absence of any application for extension of judicial custody, and lack of adverse antecedents.
The order, however, is only a bail decision. The High Court did not acquit the petitioner or finally determine whether the allegations under the NDPS Act were proved. Those questions remain matters for the criminal proceedings.
Key Takeaway
The Andhra Pradesh High Court granted bail to an accused allegedly involved in a 59.160 kg ganja case after finding that he had already spent 201 days in judicial custody, while the charge sheet remained unfiled beyond the 180-day statutory period and no application for extension of judicial custody had been made.
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.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 22.09.2026
Calcutta High Court: Bona Fide Purchaser of Transferable DFIA Licence Cannot Be Saddled With Customs Duty for Exporterβs Fraud
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 .
In a significant ruling concerning Duty Free Import Authorisation (DFIA) licences and the liability of bona fide transferees, the Calcutta High Court has held that a purchaser who acquires a transferable duty-free import licence for value and without notice of any fraud or irregularity committed by the original licence holder cannot be made liable for customs duty, interest and redemption fine when the licence has never been cancelled by the competent authority.
A Division Bench comprising Justice Rajarshi Bharadwaj and Justice Sudip Deb allowed the appeal filed by Comet Overseas Pvt. Ltd. and quashed a customs duty demand of βΉ22,87,654.95, the consequential interest and a βΉ15 lakh redemption fine that had earlier been sustained by CESTAT.
Comet Overseas Purchased Transferable DFIA Licence for βΉ14.51 Lakh
Comet Overseas Pvt. Ltd., engaged in export-import bulk commodity trading, was a subsequent purchaser and transferee of DFIA Licence No. 0210100847 dated 16 May 2007.
The licence was one among 23 DFIA licences obtained by Gemini Overseas Ltd. from DGFT during 2007-08 and 2008-09 under Notification No. 40/2006-Cus dated 1 May 2006, permitting duty-free import of specified silk products.
Three of those licences were subsequently endorsed as transferable by the Regional Authority after certification of fulfilment of export obligation. Comet Overseas purchased the licence in question for βΉ14,51,795 through proper banking channels, through Customs House Agent M/s S.K. Saha & Co.
Acting upon the licence, Comet imported Mulberry Raw Silk Yarn duty-free under Bill of Entry No. 437910 dated 22 October 2008 at Kolkata Port. The assessable value was approximately βΉ74.03 lakh, while the customs duty foregone amounted to βΉ22,87,654.95.
DRI Investigation Found Fraud by Original Licence Holder
The controversy arose after intelligence gathered by the Directorate of Revenue Intelligence (DRI) indicated irregularities in the manner in which Gemini Overseas had discharged its export obligation.
According to the judgment, Gemini Overseas had exported fabric made of Noil Yarn while declaring it as Natural Silk Fabric predominantly made of Mulberry Raw Silk.
Consignments were intercepted at N.S. Dock, Kolkata and at the factory of Eastern Silk Industries Ltd. in Falta SEZ in November 2008. Testing by the Central Silk Board indicated that the fabric consisted of Noil Yarn mixed with cotton.
Gemini Overseas subsequently admitted by letter dated 2 January 2009 that the description contained in its export documents was incorrect and that benefits not otherwise due could have been availed. It also expressed willingness to pay the duty foregone in relation to the three transferable licences.
Customs Issued Show Cause Notice to Comet Overseas
A Show Cause Notice dated 11 May 2012 was issued jointly to Comet Overseas, Gemini Overseas and other persons.
Customs proposed recovery of βΉ22,87,654.95 under the erstwhile proviso to Section 28(1), read with Section 28(4) of the Customs Act, 1962, along with interest. Confiscation was proposed under Section 111(o) and penalty under Section 112.
Importantly, the High Court noted that the SCN, insofar as Comet Overseas was concerned, did not contain any allegation of collusion, wilful misstatement or suppression of facts on its part.
The Order-in-Original dated 28 February 2014 nevertheless confirmed the duty demand, imposed a βΉ15 lakh redemption fine under Section 125, and imposed a penalty of βΉ10 lakh under Section 112.
CESTAT Removed Penalty but Sustained Duty and Redemption Fine
On appeal, CESTAT partly granted relief to Comet Overseas.
The Tribunal set aside the βΉ10 lakh penalty after finding that Comet had no knowledge of the nature of the goods used and exported by Gemini Overseas/Eastern Silk Industries. However, CESTAT sustained the customs duty demand, interest and βΉ15 lakh redemption fine.
Comet Overseas therefore approached the Calcutta High Court.
Core Question: Can an Innocent Transferee Be Liable for Original Exporterβs Fraud?
The High Court had admitted the appeal on the following substantial question of law:
βWhether a bona fide purchaser of duty-free import licence for value can be required to pay duty, interest and redemption fine in respect of his import, when he has no notice of any irregularity on the part of the exporter who had obtained such licence and the licence is not cancelled by the authorities?β
This placed the legal status of a bona fide transferee for value without notice at the centre of the dispute.
Comet Overseas: Fraud Makes Licence Voidable, Not Automatically Void
The appellant argued that the DFIA licence had been genuinely issued by DGFT and the alleged fraud occurred later, at the stage of certification of fulfilment of export obligation by Gemini Overseas.
Relying on the Supreme Court judgments in East India Commercial Co. Ltd., Calcutta v. Collector of Customs, Calcutta and Collector of Customs, Bombay v. Sneha Sales Corporation, Comet argued that even a licence obtained through fraud is voidable rather than automatically void, and continues to operate until cancelled in accordance with law.
The appellant also relied upon Taparia Overseas (P) Ltd. v. Union of India to contend that a transferee who purchases a duty-free licence for valuable consideration through legitimate banking channels and without notice of the original holder’s fraud should not be saddled with duty, interest and redemption fine.
Revenue: Fraud Went to Foundation of DFIA Benefit
Customs argued that Gemini Overseas’ fraud went to the foundation of the licence because the exporter had falsely declared the nature of goods exported for fulfilling its export obligation.
Revenue relied upon ICI India Ltd. v. Commissioner of Customs (Port), Calcutta and Munjal Showa Ltd. v. Commissioner of Customs & Central Excise (Delhi-IV) to contend that an instrument tainted by fraud could not confer exemption upon a subsequent holder merely because that holder was personally innocent.
Revenue also relied upon Tata Iron and Steel Co. Ltd. v. Commissioner of Customs, Mumbai on the extended period of limitation and Commissioner of Customs, Hyderabad v. Pennar Industries Ltd. on compliance with conditions of exemption notifications.
Genuine Licence Different From Forged or Non-Existent Scrip: High Court
A crucial distinction drawn by the High Court was between a genuinely issued licence subsequently affected by fraud and an instrument that was forged and never issued by the competent authority at all.
The Court observed that ICI India and Munjal Showa involved forged instrumentsβDEPB scrips and Transfer Release Advicesβwhich were never validly issued by the competent authority.
Comet Overseas’ case was materially different. The DFIA licence had been genuinely issued by DGFT and validly endorsed as transferable by the Regional Authority. The alleged fraud occurred in relation to the certification of export obligation by the original licence holder.
The High Court therefore declined to mechanically apply the proposition that βfraud vitiates everythingβ to an innocent subsequent purchaser.
Fraudulent Licence Remains Effective Until Cancelled
The Court relied significantly upon the principles laid down in East India Commercial and Sneha Sales Corporation.
It held that a licence affected by fraud or misrepresentation is not automatically rendered non-est. Rather, such a licence remains effective in law until it is avoided or cancelled in the manner prescribed by law.
A decisive fact in Comet Overseas’ favour was that DFIA Licence No. 0210100847 had never been cancelled by DGFT or the Regional Authority.
The Court regarded this as a material and unrebutted circumstance demonstrating that the licence remained a valid and subsisting instrument when Comet made its import.
Bona Fide Purchaser for Value Stands on Different Footing
The High Court also gave substantial weight to Comet Overseas’ status as a bona fide purchaser for value without notice.
The company had paid βΉ14,51,795 for the licence through banking channels. More importantly, CESTAT itself had already found that Comet had no knowledge of the irregularities committed by Gemini Overseas or Eastern Silk Industries. Revenue had not challenged that finding.
Applying Taparia Overseas, the High Court held that an innocent transferee stands on a different footing from the person who committed or participated in the fraud.
The Court observed that the maxim βfraud vitiates everythingβ does not, without more, extend to defeat the rights of such a transferee.
Pennar Industries Distinguished
The High Court also rejected Revenue’s reliance upon Commissioner of Customs, Hyderabad v. Pennar Industries Ltd., (2015) 10 SCC 581 / 2015 (322) E.L.T. 402 (S.C.).
It explained that Pennar Industries concerned the original importer’s own failure to fulfil the conditions of an exemption notification.
It did not deal with the distinct question of whether liability arising from the default of a third party could subsequently be imposed upon an innocent transferee who purchased the licence for value without knowledge of that default.
Tata Iron & Steel Decision Did Not Alter the Result
The Court similarly declined to treat Tata Iron and Steel Co. Ltd. v. Commissioner of Customs, Mumbai, 2015 (319) E.L.T. 546 (S.C.) as controlling.
It observed that the reported decision was a brief order and did not clearly disclose whether the transferee in that case occupied the same position as Comet Overseasβnamely, a bona fide purchaser for value without notice.
The Court therefore regarded its precedential weight on the facts before it as limited and preferred the reasoning in East India Commercial, Sneha Sales Corporation and Taparia Overseas.
Limitation Argument Not Independently Decided
Comet Overseas had also argued that the extended limitation period under Section 28 could not have been invoked because the SCN contained no allegation of collusion, wilful misstatement or suppression against it.
The High Court, however, noted that no substantial question of law concerning limitation had been framed when the appeal was admitted. It therefore declined to decide limitation as an independent ground at the final hearing.
Nevertheless, the Court expressly recorded that the SCN contained no allegation of collusion, wilful misstatement or suppression against Comet Overseas and treated that fact as relevant to its overall assessment, without independently adjudicating the limitation issue.
Calcutta High Court Rules in Favour of Comet Overseas
The High Court ultimately held that because the DFIA licence had never been cancelled, and because the fraud attributable to Gemini Overseas arose at the export-obligation certification stage rather than at the original issuance of the licence, the licence had to be treated as voidable rather than void on the record before it.
Since Comet Overseas was an unimpeached bona fide purchaser for value without notice, the Court held that it could not be fastened with customs duty, interest and redemption fine arising from a third party’s fraud of which it had no knowledge.
The substantial question of law was accordingly answered in favour of Comet Overseas and against the Revenue.
βΉ22.87 Lakh Duty Demand and βΉ15 Lakh Redemption Fine Quashed
The High Court allowed Comet Overseas’ appeal and set aside CESTAT’s order dated 22 December 2015 to the extent that it had sustained:
Customs duty: βΉ22,87,654.95 Interest: Consequential interest on the duty demand Redemption fine: βΉ15,00,000
All three were quashed.
CESTAT’s earlier decision setting aside the βΉ10 lakh penalty under Section 112 of the Customs Act remained undisturbed because Revenue had not challenged that part of the Tribunal’s order.
Key Takeaway
The ruling provides important protection to bona fide purchasers of transferable DFIA licences. On the facts before it, the Calcutta High Court drew a clear distinction between a forged/non-existent instrument and a licence genuinely issued by DGFT and validly endorsed as transferable but subsequently affected by fraud attributable to the original exporter. Where the transferee purchased such a licence for value without notice of the irregularity, and the competent authority never cancelled the licence, the Court held that the transferee could not be saddled with the duty, interest and redemption fine arising from the original licence holder’s fraud.
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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.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 19.09.2026
Gujarat High Court: Customs Refund Limitation Cannot Run Until Final Assessment Is Communicated to Importer; Mere ICEGATE Upload Not Enough
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 has held that merely uploading an order finalising provisional assessment on the Customs electronic portal is not sufficient to start the limitation period for claiming refund under Section 27(1B)(c) of the Customs Act, 1962. The final assessment must be communicated to the assessee before the statutory one-year period can operate against it.
The Division Bench of Justice Bhargav D. Karia and Justice Niral R. Mehta, in Principal Commissioner, Customs, Ahmedabad Commissionerate v. M/s GAIL (India) Ltd., R/Tax Appeal No. 211 of 2024, dismissed the Revenue’s appeal on 13 June 2024, finding no infirmity in CESTAT’s decision in favour of GAIL. The judgment carries neutral citation 2024:GUJHC:30963-DB.
Dispute Over Refund of Excess Customs Duty on Imported LNG
GAIL (India) Ltd. was engaged in the import of Liquefied Natural Gas (LNG). It filed 16 Bills of Entry, which were initially assessed provisionally under Section 18 of the Customs Act upon execution of a bond. After production of the original documents, the Bills of Entry were subsequently finalised.
The table reproduced by the High Court on pages 3 and 4 of the judgment records the provisional and finally assessed quantities, Customs duty paid and the refund claimed for each Bill of Entry. The aggregate excess duty claimed as refund was βΉ7,78,98,646.
GAIL eventually filed its refund application on 26 October 2016. It also submitted a Chartered Accountant’s certificate dated 7 September 2016 concerning unjust enrichment, stating that the excess Customs duty had been reflected as a receivable in its books and had not been passed on to customers.
Customs Department Rejected Refund as Time-Barred
The adjudicating authority rejected GAIL’s refund claim on limitation.
According to Customs, the 16 Bills of Entry had been finally assessed between 7 October 2015 and 20 October 2015. Since the refund application was filed on 26 October 2016, the Department treated it as having been filed beyond the one-year limitation prescribed under Section 27(1B)(c).
The Department’s case was essentially that Section 27(1B)(c), where duty has been provisionally paid under Section 18, computes the limitation period from the date of adjustment of duty after final assessment or, in the case of reassessment, from the date of reassessment.
CESTAT Allowed GAIL’s Appeal
GAIL challenged the rejection before CESTAT.
The Tribunal allowed the appeal by relying upon Indian Oil Corporation Ltd., 2014 (308) E.L.T. 169, holding that the relevant point for limitation was the date of service of the finalisation of provisional assessment.
The precedent emphasised that where an order gives rise to a remedial right, the date on which the order is served upon the person concerned assumes significance for exercising that remedy.
CESTAT consequently rejected the Department’s contention that the importer should simply have discovered the finalisation through ICEGATE.
Revenue Approaches Gujarat High Court
The Principal Commissioner of Customs challenged the Tribunal’s order before the Gujarat High Court under Section 130 of the Customs Act.
The principal question proposed by Revenue was whether CESTAT was correct in treating the date of service of the finalisation order as the relevant date for limitation when Section 27(1B)(c) refers to the date of adjustment of duty after final assessment or the date of reassessment.
Revenue argued that the final assessments had already been uploaded on the ICEGATE system and that GAIL was required to take notice of the assessments made available on the portal. On this basis, Customs contended that the refund application was beyond limitation.
Section 27(1B)(c): One-Year Limitation After Finalisation
The High Court examined Sections 18 and 27 of the Customs Act, 1962.
Section 27(1B)(c) provides that where duty has been paid provisionally under Section 18, the one-year limitation is computed from the date of adjustment of duty after final assessment, or, in the case of reassessment, from the date of reassessment.
The High Court accepted that once provisional assessment is completed and an assessee becomes entitled to refund, the refund application has to be made within the period prescribed under Section 27 read with Section 27(1B).
The crucial question, however, was whether limitation could operate against an assessee before the final assessment had actually been communicated to it.
GAIL’s August 2016 Letter Became Crucial
A significant factual circumstance was GAIL’s letter dated 19 August 2016.
The adjudicating authority itself had recorded that this letter requested the Department to finalise the Customs duty/final assessment. Customs rejected GAIL’s argument that this letter itself should be treated as a refund claim, observing that it was merely a request for early finalisation and was unrelated to a refund application.
But that finding had another consequence.
The Gujarat High Court observed that the very fact that GAIL was requesting finalisation on 19 August 2016 indicated that, until then, the assessee was not aware that the final assessments had already been completed.
This became an important factual basis for rejecting Revenue’s limitation argument.
Mere Upload on Customs Portal Is Not Sufficient Communication
The most important part of the judgment is the High Court’s finding concerning electronic uploading of the assessment order.
The Court held:
βMerely because the Custom Department has uploaded the final assessment orders on portal is not sufficient compliance of intimation to the assesseeβ¦β
The Court treated communication of the final assessment as a condition sine qua non for the assessee to exercise the statutory right of seeking refund within one year under Section 27(1B)(c).
It further held that CESTAT had correctly considered the documents showing when the finalisation of provisional assessments was actually communicated to GAIL.
The decision therefore draws an important distinction between an order merely being available electronically on a departmental portal and the order being communicated to the person whose statutory remedy depends upon knowledge of that order.
Gujarat High Court Dismisses Revenue’s Appeal
The High Court found no infirmity in CESTAT’s order and held that no question of law, much less any substantial question of law, arose for consideration.
The Revenue’s appeal was therefore dismissed as being devoid of merit.
Thus, GAIL (India) Ltd. succeeded before the Gujarat High Court on the limitation dispute concerning its Customs refund claim.
Why the Judgment Is Important for Importers
The decision has considerable practical importance for importers whose Bills of Entry have been provisionally assessed under Section 18 and who subsequently become entitled to refund following finalisation.
The judgment establishes that the Department cannot necessarily rely only upon the internal date of final assessment or the fact that the assessment was uploaded on ICEGATE when the importer was not shown to have been duly informed of the finalisation.
For refund disputes under Section 27(1B)(c), evidence relating to communication or service of the final assessment can therefore become critical in determining whether the refund application is within limitation.
The judgment is particularly relevant where Customs argues that the importer should have independently monitored the portal even though no effective communication of the final assessment was established.
Key Legal Principle
The principle emerging from the judgment can be stated succinctly:
Where refund arises following finalisation of provisional assessment under Section 18 of the Customs Act, the statutory limitation under Section 27(1B)(c) cannot effectively be invoked against the assessee merely on the basis that the final assessment was uploaded on the Customs portal. Communication of the final assessment to the assessee is essential before limitation can operate against the refund claim.
The ruling therefore reinforces the procedural importance of actual communication of Customs assessment orders, particularly where commencement of a limitation period affects an importer’s substantive right to claim refund.
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.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 18.09.2026
CESTAT Chennai: Refund Limitation Cannot Begin Before Final Assessment Order Is Communicated to Importer
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 .
In an important ruling concerning the limitation period for Customs refunds arising from provisional assessments, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai has held that the one-year limitation under Section 27(1B)(c) of the Customs Act, 1962 must be reckoned from the date on which the order finalising the provisional assessment is communicated to the person entitled to claim the refund, and not merely from the date on which the order is passed.
The Tribunal dismissed the Revenue’s appeal against Tamilnadu Newsprint and Papers Ltd. (TNPL) and upheld the Commissioner (Appeals)’ finding that TNPL’s refund claim was not time-barred.
Background: βΉ75.50 Lakh Refund Arising From Provisional Assessment
TNPL had imported non-coking coal under Bill of Entry No. 3551653 dated October 17, 2013. The Bill of Entry was provisionally assessed because original documents and the test report were unavailable at the time of assessment.
After the relevant documents were produced, the Assistant Commissioner of Customs, Nagapattinam finalised the assessment through Order-in-Original No. 35/2014 dated April 30, 2014. The finalisation resulted in a finding that TNPL had paid excess Customs duty of βΉ75,50,539, which was ordered to be refunded.
TNPL subsequently filed its refund claim dated May 13, 2015, received by Customs on May 15, 2015. After the Department issued a deficiency memo, the claim was resubmitted on June 4, 2015 and received on June 9, 2015.
Customs Department Rejected Refund as Time-Barred
The Department took the position that the limitation period had commenced on April 30, 2014, when the provisional assessment was finalised.
According to Customs, Section 27(1B)(c) specifically provides that where duty has been paid provisionally under Section 18, the one-year limitation period is computed from the date of adjustment of duty after final assessment.
On that reasoning, even TNPL’s original filing in May 2015 was beyond one year from April 30, 2014. The adjudicating authority therefore rejected the refund as time-barred by Order No. 37/2015 dated September 2, 2015.
Commissioner (Appeals) Allowed TNPL’s Appeal
The Commissioner (Appeals), however, set aside the rejection.
It held that under Section 153 of the Customs Act, an order has to be communicated in the prescribed manner and that the relevant date for pursuing a remedial measure is the date on which the order is communicated to the affected person.
The appellate authority relied upon CESTAT’s decision in Indian Oil Corporation Ltd. v. Commissioner of Customs, 2014 (308) E.L.T. 169 (Tri.-Del.).
TNPL had also produced a postal cover bearing the postal authority’s seal and stamp as evidence regarding receipt of the finalisation order. The Department, on the other hand, could not establish an earlier date of communication. The Commissioner (Appeals) consequently directed the refund claim to be considered, prompting Revenue to approach CESTAT.
Core Question Before CESTAT
The Tribunal identified the central issue as whether TNPL’s refund claim relating to duty paid provisionally under Section 18 was filed within the one-year limitation prescribed under Section 27(1B)(c).
The Department argued for a literal construction: the statute refers to the date of adjustment following final assessment and does not expressly use the word βcommunication.β
CESTAT, however, held that the provision could not be interpreted in isolation from the settled principles governing limitation where an affected person has to pursue a legal remedy.
Limitation Cannot Begin Before Party Knows About the Order
The Tribunal placed significant reliance on the Supreme Court’s judgment in Collector of Central Excise, Madras v. M.M. Rubber & Co., 1991 (55) E.L.T. 289 (SC).
CESTAT explained that the Supreme Court had distinguished between two situations.
Where a statutory authority is required to exercise its own power within a prescribed period, limitation may run from the date the order is made because the authority cannot claim ignorance of its own action. But where limitation governs the right of an aggrieved person to pursue a remedy, actual or constructive knowledge of the order becomes essential.
Applying that principle, CESTAT observed that TNPL was not the author of the final assessment order. It was the person required to act upon that order to recover excess duty. It would therefore be incongruous for the limitation period to begin running even before the order was communicated to it.
Gujarat High Court’s GAIL Ruling Followed
The Tribunal found substantial support in Principal Commissioner of Customs, Ahmedabad v. GAIL (India) Ltd., (2024) 20 Centax 516 (Guj.).
The Gujarat High Court had considered essentially the same question: whether the βdate of serviceβ of an order finalising provisional assessment is relevant for calculating limitation under Section 27(1B)(c), despite the statutory language referring to adjustment of duty after final assessment.
The High Court decided the issue against Revenue and held that communication of the finalisation order to the assessee is a condition sine qua non for filing the refund claim within the prescribed period.
Importantly, CESTAT also noted the Gujarat High Court’s finding that mere uploading of an assessment order on the Department’s portal, without more, would not satisfy the requirement of communication.
CESTAT consequently held that the issue was no longer res integra.
One-Year Period Runs From Communication of Final Assessment Order
The Chennai Bench crystallised the legal position in clear terms.
It held that the one-year limitation prescribed under Section 27(1B)(c), for refund of duty paid provisionally under Section 18, runs from the date on which the order finalising the assessment is communicated to the person entitled to the refund, rather than from the bare date on which the finalisation order is passed.
This distinction is significant for importers whose provisional assessments are finalised but where the resulting order is communicated after a delay.
Mere Dispatch Is Not Enough; Customs Must Prove Service
CESTAT went further and examined what amounts to valid communication under Section 153 of the Customs Act.
The Tribunal held that the Department must demonstrate actual communication in accordance with the prescribed statutory mechanism. Mere assertion that an order was dispatched is insufficient.
It relied upon the Larger Bench ruling in Margra Industries Ltd. v. Commissioner of Customs, New Delhi, 2006 (202) E.L.T. 244 (Tri.-LB), which held that dispatch by post without proof of delivery does not constitute sufficient compliance where the special statute itself prescribes the manner of service.
The Bench also relied upon the Madras High Court’s decision in Schiller Healthcare India Pvt. Ltd. v. Assistant Commissioner of Customs, 2021-TIOL-1357-HC-MAD-CUS, where the Court dealt with the hierarchy of modes of service contemplated under Section 153.
Burden of Proving Communication Lies on Revenue
Another important principle emerging from the ruling concerns the burden of proof.
Referring to its earlier ruling in Rane (Madras) Ltd. v. Commissioner of GST and Central Excise, Chennai South Commissionerate, along with the Chhattisgarh High Court’s decision in Vijay Pratap and the Supreme Court’s ruling in Saral Wire Craft Pvt. Ltd., the Tribunal held that the prescribed statutory method of service must be strictly followed.
CESTAT stated that the burden of proving that an order adversely affecting an assessee has been served through the prescribed method rests on Revenue.
Section 153 Applies to Assessment Orders Too
Revenue could also not escape the communication requirement merely because the order in question finalised a provisional assessment rather than being an adjudication order in the conventional sense.
The Tribunal noted that Section 153 speaks of an βorder or decisionβ without restricting its operation to adjudication orders.
Further, provisional assessment falls within the definition of βassessmentβ under Section 2(2) of the Customs Act.
Relying upon Commissioner of Customs (Export), Mumbai v. Goodwill Sales Pvt. Ltd., 2016 (343) E.L.T. 1193 (Tri.-Mumbai), CESTAT observed that although assessment and adjudication are conceptually distinct, both constitute orders or decisions for purposes of the Customs Act.
Revenue Failed to Prove Earlier Service
On the facts, the Department could not produce evidence demonstrating that the finalisation order had been dispatched to TNPL by registered post, speed post or another method contemplated under Section 153, much less evidence establishing delivery on an earlier date.
TNPL, in contrast, had produced the postal cover bearing the seal and stamp of the postal department.
The Department’s suggestion that the postal cover might have contained some other correspondence was rejected by the Tribunal as a bare surmise unsupported by evidence.
Refund Claim Held Within Limitation
After adopting the date of communication as the relevant starting point, the Tribunal found TNPL’s refund claim to be within the statutory limitation.
The order records that, reckoned from the accepted date of communication, the one-year period expired on June 10, 2015. TNPL’s refund claim dated May 13, 2015 and received on May 15, 2015 was therefore within time.
Even its resubmission after curing the deficiencyβmade on June 4 and received by Customs on June 9, 2015βfell within the one-year period.
Revenue’s Appeal Dismissed
CESTAT ultimately found no error in the Commissioner (Appeals)’ conclusion that TNPL’s refund claim was not barred by limitation.
Accordingly, the Tribunal dismissed the Revenue’s appeal and upheld Order-in-Appeal No. 91/16-TRY(CUS) dated April 5, 2016, with consequential relief in accordance with law. Thus, Tamilnadu Newsprint and Papers Ltd. succeeded before CESTAT on the limitation issue.
Why the Ruling Matters for Importers
The judgment has practical significance beyond TNPL’s individual refund claim. It reinforces that an importer cannot ordinarily be deprived of a statutory remedy by allowing limitation to run from an order that has not been properly communicated to it.
The decision is particularly relevant in cases involving provisional assessment under Section 18, refund applications under Section 27, and disputes regarding service or communication under Section 153 of the Customs Act.
The ruling also underscores a crucial evidentiary point for Customs proceedings: where Revenue relies on an earlier date of service to defeat a claim on limitation, the burden of establishing proper communication through the statutorily prescribed mode rests upon the 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.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 17.09.2026
CESTAT Mumbai: Vitamin and Enzyme Premixes for Animal Feed Classifiable Under CTH 2309
This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai has ruled in favour of DSM Nutritional Products India Pvt. Ltd. in a long-running customs classification dispute, holding that imported vitamin premixes and enzyme preparations meant for use in animal feeding are classifiable under Customs Tariff Heading (CTH) 2309, and not under CTH 2936 or CTH 3507 as contended by Customs.
A Division Bench comprising S.K. Mohanty, Member (Judicial), and M.M. Parthiban, Member (Technical) set aside the May 8, 2024 order of the Commissioner of Customs (Appeals), JNCH, Nhava Sheva, and allowed Customs Appeal Nos. 87088 to 87126 of 2024 with consequential relief. The final order was pronounced on September 11, 2026.
The ruling is significant for the tariff classification of feed-grade vitamin and enzyme premixes, particularly where such products contain active ingredients along with carriers, fillers, stabilisers, anti-caking agents and other substances specifically designed for animal-feed applications.
DSM Imported Vitamin and Enzyme Premixes for Animal Feeding
DSM Nutritional Products India imported preparations containing vitamins and enzymes from its related overseas supplier, DSM Nutrients Asia Pacific Private Limited, Singapore.
The imports included a range of Rovimix vitamin premixes and Ronozyme enzyme preparations, which were intended for use in preparation of animal feed.
DSM classified these products under CTH 2309, covering preparations of a kind used in animal feeding.
Because the overseas supplier was a related party, the assessments had remained provisional since October 2010. The Special Valuation Branch subsequently concluded in 2016 that the relationship had not influenced the declared import price.
Customs Sought Classification Under Chapters 29 and 35
The dispute arose after the Central Intelligence Unit and Special Investigation & Intelligence Branch examined the classification adopted by DSM.
Customs took the position that the vitamin and vitamin premixes should be classified under CTH 2936, while enzyme preparations should fall under CTH 3507, instead of Heading 2309.
Consequently, provisional assessments covering imports from October 2010 to December 2020 remained pending.
DSM repeatedly sought finalisation of the assessments and refund of pre-deposits/Extra Duty Deposits. When the matter remained unresolved, it approached the Bombay High Court in Writ Petition No. 3323 of 2021. The High Court directed Customs to finalise the provisional assessments.
Customs Finalised Assessments Against DSM
The Assistant Commissioner of Customs eventually passed an Order-in-Original dated September 22, 2023 rejecting DSM’s classification under CTH 2309.
The authority classified the vitamin products under CTH 2936 and enzyme products under CTH 3507, finalised the assessments under Section 18(2) of the Customs Act, 1962, demanded differential customs duty with interest and ordered appropriation against deposits already made by DSM.
Interestingly, the Tribunal recorded that the exact amount of duty demanded, confirmed or appropriated was not mentioned in the operative portion of the original order.
The Commissioner (Appeals) subsequently upheld the classification adopted by the original authority and dismissed DSM’s appeals, leading to the proceedings before CESTAT.
DSM: Products Are Exclusively Intended for Animal Feed
DSM argued that the disputed vitamin and enzyme premixes were exclusively intended for animal feeding and were not used for human consumption.
The preparations contained vitamins or enzymes as active ingredients together with carriers, fillers, anti-caking agents, stabilisers and other additives selected keeping their animal-feed end use in view.
DSM further used these imported premixes to manufacture composite premixes containing vitamins, minerals, enzymes and other ingredients, which were also intended exclusively for animal feeding.
DSM therefore relied heavily on the Larger Bench decision in Tetragon Chemie (P) Ltd. v. Collector of Central Excise, Bangalore, 2001 (138) E.L.T. 414 (Tri.-LB), which had held that premixes of the relevant nature used in animal feeding fall under the animal-feed heading. That ruling was upheld by the Supreme Court when the Revenue’s appeal was dismissed.
Earlier Venkateshwara B.V. Bio Corp Ruling Became Crucial
A particularly important aspect of DSM’s case was the Tribunal’s earlier ruling in Venkateshwara B.V. Bio Corp Private Limited v. Commissioner of Customs (NS-I), (2025) 26 Centax 283 (Tri.-Bom.).
DSM argued that the classification dispute in Venkateshwara was virtually identical, arose from the same investigation and even involved the same overseas supplier, DSM Nutritional Products Asia Pacific Pte. Ltd., Singapore.
In that case, CESTAT had classified the imported products under CTI 2309 9090. Customs challenged that ruling before the Supreme Court, but its appeal was dismissed on February 7, 2025.
The Supreme Court order reproduced on page 10 of the CESTAT judgment records that it found no good ground to interfere with the Tribunal’s decision, particularly in light of Circular No. 188/22/96-CX dated March 26, 1996, and dismissed the Revenue’s appeal.
Core Issue Before CESTAT: CTH 2309 vs 2936/3507
The Tribunal framed the principal issue as whether the imported vitamin premixes and enzyme preparations for feed/animal grade were classifiable under CTI 2309 9020 as claimed by DSM, or whether vitamins should be classified under CTH 2936 and enzymes under CTH 3507 as determined by Customs.
Customs had reasoned that vitamins and enzymes had specific tariff headings and that a specific classification should prevail over what it regarded as the more general or residual animal-feed heading.
The Commissioner (Appeals) had relied substantially upon Rule 3(a) of the General Rules for Interpretation and the ingredients of the imported products in concluding that vitamins belonged under 2936 and enzyme preparations under 3507.
CESTAT Finds Customs Order Legally Deficient
The Tribunal was not persuaded by that approach.
It observed that neither the Commissioner (Appeals) nor the original authority had undertaken a sufficiently detailed examination of the scope of the competing tariff headings and the relevant HSN Explanatory Notes.
According to CESTAT, a comprehensive classification exercise under the Customs Tariff Act, 1975 required proper examination of the competing entries rather than merely proceeding on the premise that Chapters 29 and 35 contained more specific descriptions.
The Tribunal therefore found, even at the preliminary level of its analysis, that the impugned appellate order was not sustainable.
Larger Bench in Tetragon Chemie Supports Heading 2309
CESTAT then relied on the Larger Bench ruling in Tetragon Chemie.
That decision had considered the specific question whether preparations used in animal feeding consisting of one or more vitamins mixed with diluents should be classified under the vitamin heading or under the animal-feed heading.
The Larger Bench concluded that premixes containing mineral substances, vitamins or provitamins, trace elements, appetisers, soya flour or meal, yeast and similar ingredients were covered by Heading 23.09 of the HSN, corresponding to the relevant animal-feed heading in the Central Excise Tariff.
The Larger Bench ultimately answered the classification issue in favour of the assessees.
CESTAT noted that this decision was upheld by the Supreme Court in 2001 (132) E.L.T. 525 (S.C.).
Indian Trading Bureau Decision Also Favoured Animal-Feed Classification
The Mumbai Bench further referred to Indian Trading Bureau Private Limited v. Commissioner of Customs (Port), Kolkata, 2024 (2) TMI 1030 β CESTAT Kolkata.
In that case, vitamins and enzymes used as animal-feed additives were classified under CTH 2309 rather than the competing tariff heading asserted by Revenue.
The decision emphasised the product literature showing that the goods were part of animal feed and were not fit for human consumption.
The Revenue’s appeal against that decision was also dismissed by the Supreme Court.
CESTAT: DSM’s Case Identical to Venkateshwara Classification Dispute
The Tribunal found the classification dispute in DSM’s appeals to be identical to the issue already considered in Venkateshwara B.V. Bio Corp.
It noted that the overseas supplier in the present case was also one of the suppliers involved in that earlier dispute.
The Venkateshwara decision had examined the Customs Tariff Act, General Rules for Interpretation, competing tariff headings 2309 and 2936, HSN Explanatory Notes and CBEC Circular No. 188/2/96-CX dated March 26, 1996.
That decision had concluded that the disputed goods were classifiable under CTH 2309 and not CTH 2936, and the Supreme Court subsequently declined to interfere with the Tribunal’s decision.
Vitamin and Enzyme Feed Preparations Classifiable Under CTH 2309
On the basis of these authorities and its own analysis, the Mumbai Bench concluded that DSM’s imported goods were properly classifiable under CTH 2309 of the First Schedule to the Customs Tariff Act, 1975.
The Tribunal expressly held that the May 8, 2024 appellate order sustaining classification under CTH 2936 and CTH 3507 did not withstand legal scrutiny and was legally unsustainable.
This finding resolved the substantive classification dispute in DSM’s favour.
DSM Nutritional Products Wins 39 Customs Appeals
CESTAT accordingly set aside the impugned Order-in-Appeal and allowed DSM Nutritional Products India’s appeals, together with consequential relief, if any, in accordance with law.
The ruling therefore represents a substantive victory for DSM on tariff classification: its animal-feed vitamin and enzyme preparations were held classifiable under Heading 2309, rather than being split between the vitamin and enzyme headings in Chapters 29 and 35.
Key Legal Takeaway
The decision reinforces an important classification principle for feed-grade preparations: the presence of vitamins or enzymes as active ingredients does not, by itself, necessarily require classification of the finished preparation under the standalone vitamin or enzyme headings.
The nature of the preparation, its composition, HSN guidance, relevant tariff notes, established judicial precedent and its exclusive design and use in animal feeding must all be considered.
The ruling is particularly important because CESTAT found the dispute materially covered by previous decisionsβincluding Tetragon Chemie and Venkateshwara B.V. Bio Corpβwhose outcomes had survived Revenue challenges before the Supreme Court.
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.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 16.09.2026
Gujarat High Court: Trademark Application Cannot Be Denied Advertisement Merely Due to Section 11(1) Objection
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 has allowed an appeal filed by Lincoln Pharmaceuticals Private Limited against the rejection of its trademark application for βGLYPANTAβ, holding that Section 20 of the Trade Marks Act, 1999 permits advertisement of a trademark application despite objections under Section 11(1).
Justice Mauna M. Bhatt, by an order dated 20 November 2025 in Lincoln Pharmaceuticals Private Limited v. Registrar of Trade Marks & Anr., R/Civil Appeal No. 7 of 2025, quashed the Trade Marks Registry’s rejection order dated 11 August 2025 and directed the Registry to proceed with advertisement of the application within three months.
The ruling does not amount to final registration of βGLYPANTA.β The Court directed advertisement of the application, leaving any opposition to be considered independently on its merits.
Lincoln Pharmaceuticals Sought Registration of βGLYPANTAβ
Lincoln Pharmaceuticals had filed an application on 22 August 2023 under Section 18(1) of the Trade Marks Act, 1999, seeking registration of the mark βGLYPANTA.β
The application was examined by the Trade Marks Registry, which issued an examination report raising objections. Lincoln Pharmaceuticals responded through a detailed reply dated 30 October 2023, raising various grounds in support of registration.
According to the pharmaceutical company, however, the grounds raised in its response were not properly considered before the application was ultimately rejected on 11 August 2025.
The rejection prompted Lincoln Pharmaceuticals to approach the Gujarat High Court under Section 91 of the Trade Marks Act.
Section 11(1) Objection Raised Over Similar Trademark
The principal objection before the Registry arose under Section 11(1) of the Trade Marks Act, which deals with relative grounds for refusal of trademark registration, including situations where similarity with an earlier trademark may create a likelihood of confusion.
Lincoln Pharmaceuticals argued that the objection was unsustainable and that its detailed response to the examination report had not been properly considered.
One of the company’s key arguments was that even where competing pharmaceutical trademarks fall within the same class, differences in the composition of the respective pharmaceutical products may constitute an additional mitigating factor while assessing likelihood of confusion.
Delhi High Courtβs Elyon Pharmaceuticals Decision Cited
To support this argument, Lincoln Pharmaceuticals relied upon the Delhi High Court’s decision in Elyon Pharmaceuticals Pvt. Ltd. v. Registrar of Trademarks, C.A. (COMM.IPD-TM) 153/2021, decided on 23 August 2023.
In that case, the Delhi High Court had considered the marks βELEMENTALβ and βELMENTINβ and observed that differences in the pharmaceutical composition of products could provide an additional mitigating consideration when examining the possibility of public confusion.
Lincoln Pharmaceuticals relied on this reasoning to argue that the Registry’s Section 11(1) objection against βGLYPANTAβ should not have resulted in rejection of its application in the manner adopted.
Company Says βGLYPANTAβ Was Already in Use Since 2023
Another argument raised before the High Court was that the Registry had relied upon trademarks that were proposed to be used, whereas Lincoln Pharmaceuticals claimed that βGLYPANTAβ had been in use since 2023 and had acquired a substantial market for the product.
The company also objected to the fact that its application had been rejected before publication in the Trade Marks Journal.
Its contention was that publication would enable the statutory process to proceed and, if any third party wished to oppose the application, such opposition could thereafter be considered in accordance with law.
Section 20 Permits Advertisement Despite Section 11 Objections: Lincoln Pharmaceuticals
Lincoln Pharmaceuticals placed particular reliance upon Section 20 of the Trade Marks Act, 1999.
It argued that even where objections under Sections 11(1) or 11(2) exist, the statutory framework permits advertisement of a trademark application.
The company therefore sought an opportunity for its application to be advertised rather than being rejected outright before publication.
The Registry’s counsel also raised an issue concerning non-joinder of the opposition party. Lincoln Pharmaceuticals responded that no private respondent was required at that stage because the challenge concerned rejection of the application before publication.
The High Court recorded that counsel appearing for the respondents could not dispute the provisions of Section 20.
Gujarat High Court Relies on Section 20
After considering the submissions, Justice Mauna M. Bhatt noted that Section 20 permits advertisement despite objections under Section 11(1).
On that basis, the Court allowed Lincoln Pharmaceuticals’ appeal and quashed and set aside the Trade Marks Registry’s order dated 11 August 2025.
The Registry was then specifically directed to proceed with advertisement of the subject trademark application in accordance with the proviso to Section 20 of the Trade Marks Act.
The Court directed that the exercise be completed within three months from receipt of its order.
Any Opposition to βGLYPANTAβ Must Be Decided on Its Own Merits
Significantly, the High Court did not direct the Registry to grant final registration of βGLYPANTA.β
Instead, the Court restored the application to the stage of advertisement. It expressly provided that if any opposition is filed against the trademark application after advertisement, such opposition must be decided on its own merits.
Thus, Lincoln Pharmaceuticals succeeded in having the rejection order set aside and obtaining publication of its application, but the ultimate registrability of βGLYPANTAβ remains subject to the statutory process, including any opposition that may be filed.
Why the Judgment Matters for Trademark Applicants
The order is significant for trademark prosecution because it highlights the distinction between an examination-stage objection and the subsequent advertisement/opposition process.
In the circumstances before it, the Gujarat High Court relied on Section 20 to permit the application to proceed to advertisement despite the Section 11(1) objection, rather than allowing the pre-publication rejection to stand.
The decision is particularly relevant to pharmaceutical trademark applications, where the Registry frequently examines competing marks closely because of concerns regarding similarity and confusion. The case also demonstrates that factors such as the nature and composition of competing pharmaceutical products may be raised by an applicant while responding to relative-ground objections, though the Gujarat High Court did not finally adjudicate the merits of the βGLYPANTAβ mark’s registrability in this order.
Key Legal Takeaway
The immediate principle emerging from the order is that the existence of a Section 11(1) objection does not, by itself in the circumstances considered by the Court, prevent the application from being advertised under Section 20.
At the same time, advertisement should not be confused with registration. Publication gives third parties an opportunity to oppose the mark, and the Registry retains the responsibility to determine any such opposition on its merits.
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.
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Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 16.09.2026
CESTAT Delhi- Packaging Material Cannot Be Treated at Par with Imported Input Under Advance Authorisation
This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi has allowed an appeal filed by M/s N.V. Distilleries and Breweries Ltd., setting aside an adjudication order that had sought recovery of customs duty on the allegation that the company violated the conditions of Notification No. 96/2009-Cus dated 11 September 2009 while fulfilling export obligations under the Advance Authorisation Scheme.
The Principal Bench comprising Dr. Rachna Gupta, Officiating President, and Ms. Hemambika R. Priya, Member (Technical) delivered Final Order No. 51464/2026 on 15 September 2026 in Customs Appeal No. 50064 of 2020.
The Tribunal drew an important distinction between an input physically incorporated in the exported product and packaging materials used for packing that product, holding that bottles, caps and labels could not be placed at par with the imported Vatted Malt Scotch used in manufacturing Indian Made Foreign Liquor (IMFL).
The Dispute: Advance Authorisation and Rule 19(2) Benefits
N.V. Distilleries was engaged in the manufacture of Indian Made Foreign Liquor (IMFL), Country Liquor, PET bottles and un-denatured spirit. The dispute originated from intelligence received by the Directorate of Revenue Intelligence (DRI), Chandigarh Regional Unit concerning alleged violation of the conditions governing Advance Authorisations.
The Department alleged that the appellant had violated the condition contained in Notification No. 96/2009-Cus because, while using duty-free imported inputs under Advance Authorisations, it had also used domestically procured bottles, caps and labels under Rule 19(2) of the Central Excise Rules, 2002 in the exported IMFL.
According to the Department, exports manufactured using such domestically procured duty-free materials could not be counted towards discharge of the export obligation under the Advance Authorisations.
Show Cause Notice Proposed Substantial Customs Duty Recovery
A Show Cause Notice dated 20 October 2016 proposed, among other things, recovery of βΉ1,93,62,179 in customs duty by invoking the bonds executed at the time of duty-free imports and Section 28(4) of the Customs Act, 1962, along with interest under Section 28AA.
A further customs duty demand of βΉ94,20,905 was proposed in respect of two Advance Authorisations on the allegation of failure to fulfil export obligations. The notice also proposed appropriation of amounts already deposited and penalties under Sections 114A and 114AA of the Customs Act, 1962.
The proposals in the Show Cause Notice were subsequently confirmed through Order-in-Original No. 14/2019 dated 30 August 2019, leading N.V. Distilleries to approach CESTAT.
Appellant: Imported VMS and Domestic Packaging Were Different Materials
The appellant’s central argument was that the essence of the Advance Authorisation Scheme is that the imported input must be physically incorporated in the resultant export product.
In the present case, the appellant had imported Vatted Malt Scotch (VMS) under Advance Authorisation, which was incorporated into the IMFL subsequently exported.
However, the bottles, caps and labels were domestically procured under Annexure-45 and Rule 19(2) of the Central Excise Rules. Therefore, according to the appellant, there was no overlapping or double benefit because the imported material and the domestically procured materials were entirely different.
The appellant further argued that the Government’s export incentive framework is intended to neutralise domestic taxes and duties so that taxes are not exported. According to it, Advance Authorisation was availed for imported VMS, whereas Annexure-45 was utilised for domestically procured glass bottles, caps and labels, with the duty benefit being claimed only once in each case.
Reliance was placed upon the Punjab and Haryana High Court’s decision in R.P. International v. Union of India, 2017 (353) E.L.T. 307 (P&H).
Revenue: Exemption Notification Must Be Strictly Construed
The Revenue defended the adjudication order by contending that Condition (viii) of Notification No. 96/2009-Cus prohibited counting exports involving inputs sourced under Annexure-45 towards fulfilment of Advance Authorisation obligations.
It alleged that the appellant had simultaneously used domestically sourced duty-free goods and imported duty-free material and had therefore breached the exemption conditions.
The Department also relied upon the Supreme Court decisions in CCE, Chandigarh-I v. Mahaan Dairies, (2004) 11 SCC 798 and Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Company, 2018 (361) E.L.T. 577 (S.C.) to argue that exemption notifications must be strictly interpreted and their conditions strictly complied with.
CESTAT Examines Meaning of βMaterialsβ
The Tribunal identified the principal question as whether the importer had failed to fulfil its export obligations and violated Notification No. 96/2009-Cus, thereby attracting customs duty, interest and penalties under Sections 114A and 114AA.
CESTAT examined the Advance Authorisation framework and noted that the scheme permits duty-free import of inputs physically incorporated in the manufactured or resultant product that is required to be exported.
Significantly, the Tribunal examined the definition of βmaterialsβ under the notification. It noted that the definition separately identifies:
raw materials, components, intermediates, consumables, catalysts and parts required for manufacture of the resultant product; and
packaging materials required for packing the resultant product.
This statutory distinction became central to the outcome.
Packaging Material Is Different From Manufacturing Input: CESTAT
CESTAT held that the notification itself differentiates between goods required for manufacture of the resultant product and goods merely used for packaging.
In this case, the raw material imported for manufacture of the resultant IMFL was VMS. Bottles, caps and labels, on the other hand, constituted packaging materials domestically procured under Annexure-45.
The Tribunal therefore held that the relevant condition of Notification No. 96/2009-Cus would apply to the imported material used in manufacturing the resultant product and that the packaging materials could not simply be equated with VMS.
R.P. International Decision Relied Upon
CESTAT also relied on R.P. International v. Union of India to explain the distinction between the DFIA Scheme and the Advance Authorisation Scheme.
The Punjab and Haryana High Court had explained that while DFIA permits duty-free import of inputs βrequired for production of export productβ, Advance Authorisation concerns inputs that are βphysically incorporated in the export product.β
Applying that distinction, CESTAT found that in the case of Advance Authorisation, the relevant imported input was the material physically incorporated into the resultant exported product.
The Tribunal consequently held that the packaging material had been wrongly placed at par with the imported VMS used in manufacturing IMFL. Since the packaging material was not physically incorporated in the IMFL itself, the exports were wrongly alleged to violate the Advance Authorisation conditions. The findings contained in the Order-in-Original were therefore liable to be set aside.
DRI Jurisdiction Objection Rejected
The appellant also challenged the jurisdiction of DRI officers to initiate proceedings under Section 28 of the Customs Act.
CESTAT referred to the Supreme Court litigation concerning the competence of DRI officers to issue demand notices. It noted that although the earlier Supreme Court decision had held against DRI’s jurisdiction, the subsequent review judgment held that DRI officers, when appointed as customs officers and assigned the relevant functions of a βproper officer,β are competent to issue Show Cause Notices under Section 28.
The Tribunal therefore rejected N.V. Distilleries’ jurisdictional objection.
This aspect of the decision is important: the importer did not succeed on the DRI jurisdiction ground. Its appeal succeeded on the substantive merits of the Advance Authorisation dispute.
CESTAT Sets Aside Order-in-Original and Allows Appeal
Ultimately, CESTAT held that although the preliminary issue concerning DRI jurisdiction was decided against the appellant, the appellant succeeded on merits.
The Tribunal accordingly set aside the Order-in-Original dated 30 August 2019 and allowed the appeal of N.V. Distilleries and Breweries Ltd.
Significance for Advance Authorisation Holders
The ruling is significant for exporters operating under the Advance Authorisation Scheme because it emphasises that the nature and role of each material must be examined before alleging violation of an exemption condition.
The Tribunal’s reasoning distinguishes an imported input that is physically incorporated into the resultant export product from materials used for its packaging.
The mere use of domestically procured packaging materials under another duty-relief mechanism cannot, on the reasoning adopted in this case, automatically justify treating those packaging materials at par with the imported manufacturing input. At the same time, the decision should not be read as permitting non-compliance with conditions attached to Advance Authorisations generally.
The ruling turns on the wording of Notification No. 96/2009-Cus and the Tribunal’s finding that VMS and the domestically procured bottles, caps and labels occupied materially different roles in relation to the exported IMFL.
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.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 15.09.2026
Delhi High Court Quashes βΉ76.72 Lakh Excise Demand; Holds Adjudicating Authority Cannot Disregard Binding CESTAT Order
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 ruled in favour of Wellspring Universal, setting aside a βΉ76.72 lakh demand raised by the Central GST authorities after finding that the adjudicating authority had failed to give effect to an earlier CESTAT order which had already upheld the taxpayerβs entitlement to refund.
A Division Bench comprising Justice Anil Kshetrapal and Justice Shail Jain, in Wellspring Universal v. Additional Commissioner of Central GST, W.P.(C) 11957/2025, set aside both the Demand-cum-Show Cause Notice dated 10 December 2019 and the consequential Order-in-Original dated 24 March 2025. The judgment was pronounced on 14 September 2026.
The Court also directed refund of the petitionerβs βΉ7,67,200 statutory pre-deposit with applicable interest.
Background of the Dispute
Wellspring Universal is a partnership firm engaged in manufacturing engineering products, particularly in the welding sector. It was registered as a 100% Export Oriented Unit (EOU) and also as a private bonded warehouse under Sections 58 and 65 of the Customs Act, 1962.
The dispute had a lengthy history involving CENVAT credit, excise duty paid on exports and subsequent refund proceedings.
Between April and December 2007, Wellspring exported goods through 36 consignments after paying excise duty of βΉ76,72,000. It initially sought rebate under Rule 18 of the Central Excise Rules, 2002. After the Department took the position that the EOU was not required to pay duty on exported goods, the petitioner repaid rebate already sanctioned and subsequently pursued its claim through the CENVAT credit/refund mechanism.
Earlier proceedings eventually culminated in an Order-in-Original dated 21 March 2017, whereby proceedings against the petitioner were dropped. That order was accepted by the competent reviewing authority and was not challenged.
βΉ76.72 Lakh Refund Sanctioned
Following these proceedings, Wellspring filed a refund claim for βΉ76,72,000, which was sanctioned by the Assistant Commissioner, CGST, Janakpuri through Refund Order dated 6 May 2019.
The authority found, among other things, that the refund claim was within limitation and that the necessary documents evidencing export had been furnished.
The Department, however, reviewed the refund order and filed an appeal before the Commissioner (Appeals). During the pendency of that appeal, a separate Demand-cum-Show Cause Notice dated 10 December 2019 was issued alleging that the βΉ76.72 lakh refund had been erroneously sanctioned and proposing recovery with interest.
The Commissioner (Appeals) subsequently allowed the Departmentβs appeal on 16 December 2019, including on the ground that the credit ought to have been transitioned through TRAN-1 and that cash refund could not be sustained.
Wellspring challenged the Commissioner (Appeals)β order before CESTAT.
In Final Order No. 56215/2024 dated 1 August 2024, CESTAT allowed Wellspringβs appeal and set aside the Commissioner (Appeals)β order.
Significantly, CESTAT did not decide the matter merely on a technical ground. It expressly held that Wellspring was entitled to refund of βΉ76,72,000 under Rule 5 of the CENVAT Credit Rules, 2004.
CESTAT further held that a substantive benefit could not be denied merely because the petitioner had quoted the wrong rule while claiming refund or because the Assistant Commissioner had sanctioned it with reference to an incorrect rule.
CESTAT also specifically examined the Departmentβs limitation objection and held that the refund claim was not barred by limitation.
Department Still Confirmed βΉ76.72 Lakh Demand
Despite the CESTAT decision, the Additional Commissioner passed an Order-in-Original on 24 March 2025, confirming the βΉ76.72 lakh demand against Wellspring.
Among the grounds adopted were that earlier refund claims had been rejected and not challenged, that the subsequent refund applications constituted fresh claims barred by limitation, and that the 2019 Refund Order had been set aside by the Commissioner (Appeals).
This prompted Wellspring to approach the Delhi High Court.
Delhi High Court: CESTATβs Operative Order Could Not Be Ignored
The High Court found a fundamental flaw in the Departmentβs approach.
It observed that the Commissioner (Appeals)β order dated 16 December 2019, on which the Additional Commissioner had relied, had itself already been set aside by CESTAT on 1 August 2024.
Therefore, the adjudicating authority could not proceed in March 2025 as though the Commissioner (Appeals)β order continued to remain an operative determination against Wellspring.
The Court emphasised a significant principle governing departmental adjudication:
An adjudicating authority exercising statutory powers must take into account operative orders passed by appellate authorities having appellate jurisdiction over it and cannot disregard a subsequent appellate determination directly bearing upon the issue under adjudication.
Limitation Issue Could Not Be Reopened Contrary to CESTAT Finding
The High Court also rejected the Departmentβs attempt to once again treat the refund as time-barred.
CESTAT had already specifically considered the limitation issue and decided it in Wellspringβs favour. The Additional Commissioner, therefore, could not simply treat the refund as a fresh application and reach a conclusion directly contrary to the Tribunalβs determination.
The High Court observed that the petitioner had specifically communicated CESTATβs 2024 decision to the adjudicating authority on 24 February 2025. Thus, this was not a situation where the authority was unaware of the appellate decision.
Nevertheless, the Order-in-Original was passed on 24 March 2025 without dealing with its effect.
Substantive Refund Benefit Cannot Be Denied Merely for Quoting Wrong Rule
Another important aspect of the case is CESTATβs underlying finding, which the High Court treated as operative.
CESTAT had held that Wellspring was substantively entitled to the βΉ76.72 lakh refund under Rule 5 of the CENVAT Credit Rules, 2004, and that the benefit could not be denied merely because an incorrect rule had been quoted while filing or sanctioning the refund claim.
The High Court clarified that CESTATβs order had not merely removed the Commissioner (Appeals)β order on a procedural or technical basis; the Tribunal had actually examined and upheld Wellspringβs substantive entitlement to the refund.
Delhi High Court Quashes SCN and Order-in-Original
The Court ultimately found that the Additional Commissioner had committed a βmanifest errorβ in confirming the βΉ76.72 lakh demand.
It held that the impugned adjudication was fundamentally unsustainable because it failed to give effect to CESTATβs subsequent Final Order and proceeded on the basis of an appellate order that had already ceased to exist.
Accordingly, the High Court:
allowed Wellspring Universalβs writ petition;
set aside the Demand-cum-Show Cause Notice dated 10 December 2019;
set aside the Order-in-Original dated 24 March 2025 confirming βΉ76.72 lakh demand; and
directed refund of βΉ7,67,200 deposited as statutory pre-deposit, together with applicable interest in accordance with law.
Why the Judgment Is Significant
The ruling reinforces judicial and quasi-judicial discipline within the tax adjudication hierarchy. Once a competent appellate tribunal has conclusively decided an issue and its order has neither been stayed nor set aside, a subordinate adjudicating authority cannot effectively nullify that decision by deciding the same issue on a contrary premise.
The High Court specifically recorded that CESTATβs Final Order dated 1 August 2024 had not been shown to have been stayed or set aside in subsequent proceedings.
The judgment is also significant for legacy Central Excise/CENVAT disputes transitioning into the GST era. It demonstrates that the existence of a separate demand proceeding cannot justify ignoring an operative appellate determination that directly decides the taxpayerβs entitlement and limitation issues.
Key Legal Principle
A statutory adjudicating authority cannot disregard an operative decision of the appellate authority having jurisdiction over it. Where CESTAT has already adjudicated the taxpayerβs substantive entitlement to refund and limitation, the adjudicating authority cannot subsequently confirm a demand on premises directly contrary to that binding appellate determination.
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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.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 14.09.2026
Madras HC: Subsequent Amendment Cannot Be Applied Retrospectively to Deny Provisional Release of Imported Goods
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 Madras High Court has ruled in favour of importer M/s Smart Impex Solutions on the issue of provisional release of imported goods, holding that a subsequent statutory amendment cannot govern imports covered by Bills of Lading issued before the amendment came into force unless the notification expressly provides for retrospective operation.
Justice Hemant Chandangoudar directed Customs authorities to consider the petitioner’s request for provisional release under Section 110A of the Customs Act, 1962, within four weeks and, upon compliance with the conditions imposed, release the goods provisionally within a further period of two weeks.
Dispute Over Import of Second-Hand Digital Multifunction Machines
Smart Impex Solutions approached the High Court under Article 226 of the Constitution of India, seeking a writ of mandamus directing Customs authorities to allow provisional release of two consignments comprising various models of second-hand Highly Specialized Equipment β Digital Multifunction Print and Copying Machines.
The consignments were covered by two Bills of Entry dated 3 August 2026. The corresponding Bills of Lading were dated 26 May 2026 and 24 May 2026, respectively.
The importer sought provisional release on execution of a simple bond for 100% of the enhanced value of the goods and payment of applicable total GST on the enhanced value. The order records that Customs Duty was exempted. The enhanced valuation was based on inspection reports and valuation certificates issued by the Chartered Engineers, M/s Supreme Techno Associates Pvt. Ltd.
Importer Relied on Earlier Madras High Court Decision
Counsel for Smart Impex Solutions argued that the issue was no longer res integra and was squarely covered by an earlier common order of the Madras High Court dated 10 July 2025 in W.P. Nos. 29418 of 2024 etc. batch.
In that batch of cases, the Court had directed consideration of importers’ requests for provisional release of similar goods under Section 110A of the Customs Act.
Customs Relied on 2026 Amendment
The Customs Department opposed the petition by relying upon an amendment dated 10 March 2026 to the Notification dated 1 July 2021.
According to the Department’s submission recorded in the judgment, the amendment provided an exemption in respect of Highly Specialized Equipment satisfying the prescribed criteria, subject to a specific exemption issued by the Ministry of Electronics and Information Technology under paragraph 2 of the Gazette Notification dated 18 March 2021, as amended on 26 April 2023, where the equipment was manufactured or imported in quantities of less than 100 units per model per year.
Crucially, the amendment was stated to have come into force with effect from 15 June 2026.
Customs further submitted that, for considering the petitioner’s claim, the date of the Bills of Lading would be considered as provided under Section 15 of the Customs Act, 1962.
Bills of Lading Pre-Dated the Amendment
The dates became decisive.
The High Court noted that the two Bills of Lading were dated 26 May 2026 and 24 May 2026, whereas the amendment relied upon by Customs came into force only on 15 June 2026.
The Court then laid down the central principle governing the dispute:
βUnless a statutory notification expressly provides for retrospective operation, it can only operate prospectively.β
Accordingly, the Court held that the amendment relied upon by Customs could not govern imports covered by Bills of Lading issued before the amendment commenced. Consequently, Customs could not refuse to consider the importer’s request for provisional release by relying upon that amendment.
Earlier Judgment on Similar Imports Also Favoured Consideration of Provisional Release
The High Court further observed that the issue concerning provisional release of similar imported goods had already been considered in its common order dated 10 July 2025 in W.P. Nos. 29418 of 2024 etc. batch.
Importantly, the Customs authorities were unable to point out any distinguishing feature that would justify taking a different view in the case of Smart Impex Solutions.
Customs Directed to Decide Section 110A Request Within Four Weeks
In view of these findings, the High Court disposed of the writ petition with specific directions.
The respondents were directed to consider Smart Impex Solutions’ request for provisional release under Section 110A of the Customs Act, 1962 and pass an appropriate order within four weeks from receipt of a copy of the High Court’s order. Customs was permitted to impose such conditions as may be considered necessary in accordance with law.
More importantly, the Court directed that once the petitioner complies with the conditions imposed by Customs, the imported goods shall be provisionally released within two weeks thereafter.
Provisional Release Does Not Decide Customs Adjudication
The High Court nevertheless made an important distinction between provisional release of the goods and final adjudication of the Customs dispute.
It expressly clarified that provisional release would remain subject to the outcome of adjudication proceedings under the Customs Act, 1962.
The adjudicating authority was directed to decide those proceedings independently on their own merits and in accordance with law, without being influenced by observations made in the High Court’s order.
Thus, the judgment should not be interpreted as a final determination of the legality of the import, classification, valuation or any other issue that may arise during Customs adjudication. The relief granted by the High Court concerns the provisional release of the consignments.
Why the Judgment Is Significant for Importers
The decision is significant for importers facing detention or non-release of goods where Customs seeks to rely upon a regulatory amendment introduced after the relevant import transaction.
The judgment reiterates the basic principle that, unless retrospective operation has expressly been provided, a statutory notification ordinarily operates prospectively. In the present case, because the Bills of Lading pre-dated the amendment’s commencement, Customs could not rely upon that later amendment as a ground for refusing even to consider provisional release.
The ruling also reinforces the practical importance of Section 110A of the Customs Act, which provides the statutory mechanism for provisional release of goods pending adjudication, subject to appropriate conditions.
Key Takeaway
The Madras High Court’s decision provides relief to M/s Smart Impex Solutions by requiring Customs to process its request for provisional release rather than reject it on the basis of a subsequently effective amendment.
The key proposition emerging from the judgment is:
A statutory amendment or notification cannot ordinarily be applied retrospectively to imports covered by Bills of Lading issued before its commencement unless retrospective operation is expressly provided. Customs therefore cannot rely upon such a subsequent amendment to refuse consideration of provisional release under Section 110A of the Customs Act.
The petitioner/importer therefore succeeded on the provisional-release issue, although the underlying Customs adjudication remains open for independent determination.
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.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 12.09.2026
CESTAT Mumbai: EPCG Duty Demand Cannot Survive Once DGFT Issues EODC Confirming Fulfilment of Export Obligation
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 .
In a significant ruling concerning imports under the Export Promotion Capital Goods (EPCG) Scheme, the CESTAT Mumbai has set aside the customs duty demand, redemption fine and penalties imposed upon Unison Hotels Limited and its Managing Director, Umesh Saraf, in relation to the import of a Honda CR-V under an EPCG authorization.
The Tribunal held that the alleged violation of EPCG conditions could not legally survive once the competent DGFT authority had issued an Export Obligation Discharge Certificate (EODC) in favour of the importer.
Background of the Dispute
Unison Hotels Limited is engaged in providing hotel-related services. For its business operations, it obtained EPCG authorizations from the Directorate General of Foreign Trade for importing four vehicles as capital goods while availing concessional customs duty benefits. One Honda CR-V was imported through Mumbai Sea Port, while three BMW cars were imported through Chennai Sea Port.
The Department initiated investigation on the basis of information alleging that the vehicles were being used as private vehicles for the personal use of the Managing Director and his family members rather than for commercial purposes connected with earning foreign exchange and fulfilling the prescribed export obligation.
In respect of the Honda CR-V imported through Mumbai, a show cause notice dated 30 August 2011 sought recovery of customs duty of βΉ9,41,922 along with interest, besides confiscation and penalties. The adjudicating authority confirmed the demand, ordered confiscation under Sections 111(d) and 111(o) of the Customs Act, 1962, permitted redemption on payment of a fine of βΉ7 lakh, and imposed penalties of βΉ1.50 lakh on Unison Hotels and βΉ1 lakh on Umesh Saraf. The Commissioner (Appeals) upheld the order.
Issue Before CESTAT
The principal question before the Tribunal was whether the appellants had violated the conditions of the EPCG authorization and consequently failed to satisfy the requirements of Notification No. 97/2004-Customs dated 17 September 2004, under which concessional customs duty had been availed for import of the Honda CR-V.
The EPCG authorization required the importer, among other things, to fulfil an export obligation equivalent to eight times the duty saved within eight years and comply with the actual-user condition. In respect of the Honda CR-V, the authorization recorded an export obligation connected with the imported vehicle and required fulfillment through use of the imported capital goods.
Appellants Relied on Earlier Chennai CESTAT Decision
The appellants argued that an identical dispute involving the other three BMW cars imported under the same EPCG arrangement had already been decided in their favour by a coordinate Bench of CESTAT Chennai through Final Order Nos. 40598-40599/2023 dated 21 July 2023. They contended that the facts and legal issues relating to the Honda CR-V were materially identical and therefore the same reasoning ought to apply.
The Mumbai Bench accepted this contention, observing that the factual matrix relating to the Honda CR-V was exactly similar to that relating to the BMW cars already adjudicated by the coordinate Bench. It consequently held that it could not take a different view in relation to the same appellants and substantially identical EPCG conditions.
Revenue’s Allegation Found Premature
The Tribunal reproduced the reasoning adopted in the earlier proceedings, where it had been held that initiation of proceedings before expiry of the period available for fulfilment of the export obligation was premature. The EPCG authorization allowed eight years for fulfilment of the export obligation, whereas the show cause proceedings were initiated well before that period had expired.
The earlier Bench had also found that the importer had declared substantial foreign-exchange earnings, which were not disputed by the Revenue. The Tribunal emphasized that the essential inquiry was whether the imported capital goods had satisfied the actual-user requirement, and observed that the existence of foreign-exchange earnings supported the appellant’s case.
It further noted that allegations concerning vehicle registration, insurance or parking arrangements were matters primarily within the jurisdiction of the concerned transport or other authorities and could not, by themselves, establish a violation of EPCG conditions enforceable by Customs.
DGFT’s EODC Became Crucial
A decisive factor in the Mumbai proceedings was that the DGFT had eventually issued the EODC/Redemption Letter on 11 January 2024 in respect of the relevant EPCG authorization.
The Tribunal recorded that the appellants had furnished the vehicle’s installation certificate, registration certificate showing the Honda CR-V as a βTourist Taxi Deluxeβ, details of foreign-exchange earnings and repeated requests for issuance of the EODC.
The Bench held that once the competent DGFT authority had issued the EODC, the allegation of non-compliance with EPCG conditions under Notification No. 97/2004-Customs could no longer legally sustain. It also noted that the importer had asserted fulfillment of the export obligation even during the original proceedings and that DGFT had subsequently formally discharged the obligation.
The Tribunal further observed that non-production of the EODC during the earlier adjudication and appellate proceedings could not be held against the appellants because the certificate had not yet been issued by DGFT and the delay was beyond their control.
Earlier Judicial Authorities Considered
The Tribunal also referred to several earlier decisions dealing with EPCG imports and actual-user requirements. Among them was Goldfinch Hotels Pvt. Ltd. v. Commissioner of Customs, 2015 (328) E.L.T. 282 (Tri.-Mumbai), where CESTAT had held that mere parking of an EPCG vehicle at a particular place or statements of drivers could not, without more, establish breach of the actual-user condition. The Bombay High Court later dismissed Revenue’s appeal against that decision.
The order also refers to Vadilal Chemicals Ltd. v. State of Andhra Pradesh, 2005 (192) E.L.T. 33 (S.C.), and M Far Hotels Ltd. v. Union of India, 2011 (270) E.L.T. 158 (Ker.), in the context of EPCG benefits and compliance with prescribed statutory or policy conditions.
The Tribunal additionally referred to the Delhi High Court’s ruling in Interglobe Enterprises Ltd. v. Union of India, 2006 (203) E.L.T. 202 (Del.), as followed in subsequent EPCG litigation, noting that the Supreme Court had dismissed the Revenue’s SLP in the connected matter.
CESTAT’s Final Ruling
The Mumbai Bench concluded that the order sustaining the customs duty demand, redemption fine and penalties was not legally sustainable. It therefore set aside the impugned order and allowed both appeals in favour of Unison Hotels Limited and Umesh Saraf.
Key Takeaway
The ruling reinforces an important principle in EPCG disputes: where the DGFT, being the competent licensing authority, has accepted fulfillment of the export obligation and issued an EODC, Customs cannot ordinarily continue to sustain a demand founded on an allegation of non-fulfilment of the very same EPCG obligation without a legally sustainable basis to disregard that discharge.
The decision is also significant because CESTAT rejected a purely factual inference of personal use based on matters such as vehicle location, registration-related allegations and statements, particularly when the importer demonstrated foreign-exchange earnings and subsequently secured formal discharge of its EPCG obligation from DGFT.
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.
