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Tag: #Exports

  • CESTAT Ahmedabad Quashes Duty Demand on MEIS/SEIS Scrip Imports

    CESTAT Ahmedabad Quashes Duty Demand on MEIS/SEIS Scrip Imports

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 12.06.2025

    CESTAT Ahmedabad Quashes Duty Demand on MEIS/SEIS Scrip Imports

    The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad, the appeals filed by Louis Dreyfus Company India Pvt. Ltd. and Narendra Forwarders Pvt. Ltd. have been allowed, offering significant clarity on the non-applicability of Education Cess (EC), Secondary and Higher Education Cess (SHEC), and Social Welfare Surcharge (SWS) where the Basic Customs Duty (BCD) is Nil under the MEIS/SEIS scrip-based imports.

    This ruling reiterates the principle that when customs duty is exempted, any surcharge or cess linked as a percentage to that duty also becomes zero. The case carries serious implications for importers using duty credit scrips under the Foreign Trade Policy (FTP), who had been facing retrospective demands from Customs authorities.

    Case Background

    • Appellant: Louis Dreyfus Company India Pvt. Ltd.
    • Co-Appellant: Narendra Forwarders Pvt. Ltd.
    • Respondent: Commissioner of Customs, Kandla
    • Issue: Whether EC, SHEC, and SWS can be validly debited from MEIS/SEIS scrips when BCD was Nil.

    The Customs authorities demanded recovery of duties on the grounds that the debit of EC/SHEC/SWS from duty credit scrips was impermissible, and should have been paid in cash. It also invoked the extended limitation period under Section 28(4) and imposed penalties under Sections 114A and 114AA of the Customs Act, 1962.

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

    Source: CESTAT Ahmedabad

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  • BIS can be enforced through QCO only on Scheduled Industry under the IDR Act, 1951

    BIS can be enforced through QCO only on Scheduled Industry under the IDR Act, 1951

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 11.06.2025

    BIS can be enforced through QCO only on Scheduled Industry under the IDR Act, 1951

    The Industries (Development and Regulation) Act, 1951 (IDRA) is a cornerstone in the legal and regulatory architecture of industrial policy in India. Enacted on 8th October 1951, the Act was passed under Entry 52 of the Union List of the Constitution of India, which empowers the Central Government to regulate industries declared by Parliament to be under its control in public interest.

    The IDRA laid the legislative foundation for India’s planned economic growth in the post-independence era. It served as the backbone of industrial licensing, control, and regulation, commonly referred to as the β€œLicense Raj.”

    Even though economic liberalization in 1991 significantly relaxed licensing controls, the Act continues to apply in critical sectors such as defence, hazardous chemicals, and atomic energy, and was last substantively amended in 2016.

    Objectives of the Act

    The key objectives of the IDRA, 1951 include:

    • Government intervention in mismanaged or non-performing industrial units
    • Regulation and development of scheduled industries in accordance with national policy
    • Equitable distribution of resources and balanced regional development
    • Control over production, quality, pricing, and distribution of essential industrial goods
    • Preventing monopolistic and unfair trade practices

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

    Source: IDRA Act, 1951 & BIS Act, 2016 (DPIIT/BIS)

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  • CESTAT Mumbai- SCMTR Not Enforceable at Time of Shipment

    CESTAT Mumbai- SCMTR Not Enforceable at Time of Shipment

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 11.06.2025

    CESTAT Mumbai- SCMTR Not Enforceable at Time of Shipment

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, quashed a punitive order issued by the Commissioner of Customs (General), Nhava Sheva, against Aiyer Shipping Agency Pvt. Ltd., citing improper application of the Sea Cargo Manifest and Transshipment Regulations, 2018 (SCMTR) and misinterpretation of the Customs Act, 1962.

    Background of the Case

    The appeal stemmed from a penalty order issued against Aiyer Shipping Agency in connection with two shipping bills dated 07.01.2022, involving export of 297.541 MTs of SHG Jumbo Zinc by Hindustan Zinc Ltd. The exporter had used Direct Port Entry (DPE) and e-sealing, but due to procedural timing, the Let Export Order (LEO) was obtained after the vessel β€˜MV Thorsky’ had sailed on 09.01.2022. This resulted in an EGM error: β€œLEO date greater than sailing date”.

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

    Source: CESTAT Mumbai

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  • CESTAT Chennai- Clarifying the Scope of Customs Exemption for MIMO-Based Devices

    CESTAT Chennai- Clarifying the Scope of Customs Exemption for MIMO-Based Devices

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 11.06.2025

    CESTAT Chennai- Clarifying the Scope of Customs Exemption for MIMO-Based Devices

    The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai has ruled in favor of M/s Inflow Technologies Pvt. Ltd., granting them exemption from Basic Customs Duty (BCD) under Notification No. 24/2005-Cus., despite their imported Wireless Access Points (WAPs) employing MIMO technology. The Tribunal relied heavily on the Delhi High Court’s judgment in Ingram Micro India Pvt. Ltd., asserting that the term β€œMIMO and LTE Products” must be read conjunctively, not disjunctively.

    Case Background

    • Appellant: Inflow Technologies Pvt. Ltd.
    • Product in Question: Wireless Access Points (WAPs) imported between July 2014 and June 2017.
    • Classification: Under CTI 8517 6990 (apparatus for transmission/reception of data).
    • Claimed Exemption: Under Sl. No. 13 of Notification No. 24/2005-Cus., which provides for β€˜nil’ rate of BCD for eligible telecom goods.
    • Dispute: The Commissioner rejected the exemption claim stating that since the WAPs used MIMO technology, they were excluded under Sl. No. 13(iv), which excluded β€œMIMO and LTE Products.”

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

    Source: CESTAT Chennai

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  • CESTAT Ahmedabad Upholds Carrier Rights under SCMTR 2018

    CESTAT Ahmedabad Upholds Carrier Rights under SCMTR 2018

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 11.06.2025

    CESTAT Ahmedabad Upholds Carrier Rights under SCMTR 2018

    The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad allowed the appeal of M/s ASR India Pvt. Ltd., a shipping line operating at Mundra Port, quashing the revocation of its registration as an authorized carrier under the Sea Cargo Manifest and Transhipment Regulations (SCMTR), 2018. The case involved complex issues around container detention charges, regulatory compliance, and procedural fairness under Customs law.

    Background of the Case

    • The dispute arose after the Principal Commissioner of Customs, Mundra, issued a Show Cause Notice on 25 November 2024 to ASR India for alleged violations of Regulations 10(1)(l) and 10(1)(m) of SCMTR, 2018.
    • The company’s registration as an authorized carrier was revoked effective 8 April 2025, and a penalty of β‚Ή50,000 was imposed.

    ASR India filed an appeal before the CESTAT and was granted interim stay on the revocation order.

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

    Source: CESTAT Ahmedabad

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  • CESTAT Chennai Upholds Target Plus Scheme Benefits

    CESTAT Chennai Upholds Target Plus Scheme Benefits

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 10.06.2025

    CESTAT Chennai Upholds Target Plus Scheme Benefits

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai dismissed five appeals filed by the Revenue against M/s Shakthi Knitting Ltd. and its directors. The core issue revolved around the alleged misuse of the Target Plus Scheme (TPS) through import of plastic granules purportedly unrelated to their exported productβ€”ready-made garments.

    Background of the Case

    The Directorate of Revenue Intelligence (DRI) initiated an investigation alleging that Shakthi Knitting Ltd. misused the TPS license to import PP/PE plastic granules, claiming they lacked a “broad nexus” with the exported garments. The DRI further alleged misrepresentation in export data submitted to DGFT, and sought cancellation/modification of the license under Notification No. 32/2005-Cus. and Circular 21/2007-Cus..

    However, the DGFT itself responded in writing that the duty credit was rightly issued under the Target Plus Scheme, confirming compliance with the FTP norms.

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

    Source: CESTAT Chennai

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  • CESTAT Ahmedabad Trade Discounts Are Not Taxable Services

    CESTAT Ahmedabad Trade Discounts Are Not Taxable Services

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 10.06.2025

    CESTAT Ahmedabad Trade Discounts Are Not Taxable Services

    The CESTAT Ahmedabad bench allowed the appeal of M/s Akshita Exports, setting aside a demand of over β‚Ή32 lakhs in service tax, interest, and penalties.

    The case revolved around the deduction of foreign commission in export invoices, which the Department alleged was taxable under Business Auxiliary Services (Section 65(105)(zzb) of the Finance Act, 1994). However, the Tribunal ruled that no such tax was applicable since there was no contract or payment made to any foreign commission agent by the appellant.

    Background of the Dispute

    • Akshita Exports exported goods between 2008–2009 and 2011–2012, with export invoices reflecting commission amounts deducted from the gross value.
    • The foreign buyers paid the net invoice amount after deducting these commissions.
    • The Department claimed the deductions constituted consideration for services rendered by foreign agents, thereby attracting service tax under reverse charge.
    • The appellant contended that no foreign agent was engaged or paid directly, and the deductions were standard trade discounts to buyers.

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

    Source: CESTAT Ahmedabad

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  • CESTAT Mumbai- Country of Origin Cannot Be Judged by Packaging Labels

    CESTAT Mumbai- Country of Origin Cannot Be Judged by Packaging Labels

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 10.06.2025

    CESTAT Mumbai- Country of Origin Cannot Be Judged by Packaging Labels

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, set aside the impugned order passed by the Commissioner of Customs (Appeals), which had upheld penalties, fine, and re-assessment against Caliber International and its partners. The issue involved allegations of misdeclaration of country of origin for imported dry dates, with Customs claiming the goods were of Pakistan origin, not UAE origin as declared.

    Case Background

    • Goods Involved: Dry Dates
    • Declared Country of Origin: United Arab Emirates
    • Allegation: Goods were actually from Pakistan, attracting 200% BCD
    • Self-Assessment: Under CTI 0804 1030 with 20% BCD and 12% IGST
    • Customs Demand: Reclassification under CTI 9806 0000 with 200% BCD
    • Penalty Imposed: Under Sections 112(a)(ii), 114AA of the Customs Act

    Customs relied primarily on jute bag tags that indicated manufacturing origins from Pakistan (e.g., β€œSargodha Jute Mills”), despite documentary proof from Dubai Chamber of Commerce, UAE port authorities, and plant quarantine certification affirming UAE as the origin.

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

    Source: CESTAT Mumbai

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  • CESTAT New Delhi Rejects DRI’s Undervaluation Claim

    CESTAT New Delhi Rejects DRI’s Undervaluation Claim

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 09.06.2025

    CESTAT New Delhi Rejects DRI’s Undervaluation Claim

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has set aside the order of the Commissioner of Customs (Adjudication) that confirmed undervaluation and duty evasion charges against M/s EDAG Technologies India Pvt. Ltd. and its foreign parent EDAG Germany, along with its officials.

    The Tribunal categorically held that there was no additional consideration paid for the imported goods and no legal basis for rejecting the declared transaction value under the Customs Valuation Rules, 1988.

    Case Background

    • Turnkey Contract: EDAG India entered a β‚Ή22.21 crore turnkey project with Ford India to set up a plant in Chennai, with 49% as import content.
    • Allegation: Directorate of Revenue Intelligence (DRI) alleged that EDAG undervalued imports by β‚Ή6.97 crore, supported by a cancelled invoice of €1 million from EDAG Germany.
    • Action Taken: A detailed SCN was issued in 2009 followed by a common adjudication in 2010, resulting in demands for differential duty, interest, confiscation of goods, and personal penalties.

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

    Source: CESTAT New Delhi

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  • CESTAT Delhi Sets Aside Penalty in DEPB Export Valuation

    CESTAT Delhi Sets Aside Penalty in DEPB Export Valuation

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 09.06.2025

    CESTAT Delhi Sets Aside Penalty in DEPB Export Valuation

    The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi, has quashed the β‚Ή10 lakh penalty imposed on him under Section 114 of the Customs Act, 1962. The penalty stemmed from alleged involvement in a major export overvaluation case under the DEPB scheme.

    Background of the Case

    The case revolves around alleged fraudulent exports of CD-ROMs by M/s. Sundram Export Pvt. Ltd. and M/s. Netcompware Pvt. Ltd., who were accused of inflating Freight on Board (FOB) value to wrongfully avail DEPB (Duty Entitlement Pass Book) benefits.

    • Allegation: Exports were declared at an inflated rate of $19 per CD-ROM, far exceeding actual value.
    • Objective: To fraudulently earn DEPB scrips, later used to import goods duty-free.
    • Appellant’s Alleged Role: Accused of orchestrating the export of CD-ROMs and re-importation under a new entity, M/s. Arvind International.

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

    Source: CESTAT Delhi

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