𝐀𝐚𝐝𝐫𝐢𝐤𝐚𝐚 𝐋𝐞𝐠𝐚𝐥 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 (𝐀𝐋𝐒)

Tag: #Facebook

CESTAT Kolkata ruled that the rejection of transaction value and enhancement based on NIDB data was erroneous
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 29.11.2025

CESTAT Kolkata ruled that the rejection of transaction value and enhancement based on NIDB data was erroneous

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

In the realm of international trade, customs valuation plays a pivotal role in determining the assessable value of imported goods for the purpose of levying duties. A recent case involving M/s Eagle International and the Commissioner of Customs (Port), Kolkata, sheds light on the complexities surrounding customs valuation and the importance of adhering to established legal principles.

Background of the Case

M/s Eagle International, an importer based in New Delhi, filed a Customs Appeal (No. 75332 of 2023) before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata. The appeal arose from an Order-in-Original passed by the Commissioner of Customs (Port), Kolkata, which rejected the declared transaction value of imported water purifier spare parts and re-assessed the value based on National Import Database (NIDB) data. The order also imposed differential duty, interest, redemption fine, and penalties on the appellant.

The case revolved around allegations of mis-declaration of the description and value of the imported goods. The adjudicating authority claimed that the declared value was significantly lower than the value determined using NIDB data, leading to the rejection of the transaction value.

Key Issues in the Case 
1. Non-Existence of the Importer: The Revenue alleged that the appellant was a non-existent entity. However, the Tribunal found no evidence to support this claim, as the appellant was operating under a valid Importer-Exporter Code (IEC) and had been recognized by the High Court in previous proceedings.
2. Rejection of Transaction Value: The primary issue was the rejection of the transaction value declared by the appellant. The Revenue argued that the declared value was under-invoiced and relied on NIDB data to enhance the value. However, the appellant contended that the transaction value was genuine and supported by commercial invoices, and that the rejection was arbitrary and lacked proper evidence.
3. Use of NIDB Data: The Revenue used NIDB data to enhance the value of the imported goods. The appellant argued that this approach was legally unsound, as the Customs Valuation Rules, 2007, require the rejection of transaction value to be based on clear and cogent evidence, which was absent in this case.
Tribunal’s Observations and Final Order 

After hearing both sides and reviewing the evidence, the Tribunal made the following key observations:
- The transaction value declared by the importer should be accepted as the assessable value unless there is clear evidence to reject it under Rule 3 of the Customs Valuation Rules, 2007.
- The Revenue failed to provide any evidence to prove that the declared transaction value was not the actual price paid for the goods or that the buyer and seller were related.
- The use of NIDB data to enhance the value was deemed erroneous, as the transaction value was not first discarded with plausible reasoning.
- The Tribunal cited several precedents, including the Supreme Court’s affirmation in the case of Agarwal Foundries P Ltd vs Commissioner of Customs, which held that NIDB data cannot be directly applied to enhance the value without proper evidence.
Based on these findings, the Tribunal set aside the impugned order and allowed the appeal, granting consequential relief to the appellant.

Key Takeaways

This case highlights several important aspects of customs valuation:
1. Importance of Transaction Value: The transaction value, which is the price actually paid or payable for imported goods, is the primary basis for customs valuation. It cannot be rejected without clear evidence of its inaccuracy.
2. Limitations of NIDB Data: While NIDB data can serve as a guideline, it cannot be the sole basis for enhancing the value of imported goods. Proper evidence and adherence to the Customs Valuation Rules are essential.
3. Adherence to Legal Procedures: The customs authorities must follow the prescribed legal procedures and provide valid reasons for rejecting the declared transaction value. Failure to do so can render their actions legally unsustainable.
Conclusion

The case of M/s Eagle International serves as a reminder of the importance of transparency, evidence-based decision-making, and adherence to legal principles in customs valuation. Importers and customs authorities alike must ensure compliance with the Customs Valuation Rules to maintain fairness and integrity in international trade. This case also underscores the role of judicial bodies like CESTAT in upholding the rule of law and protecting the rights of importers.

Source: CESTAT Kolkata

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
November 29, 2025
CESTAT Chennai Sets Aside Flawed Customs Valuation
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 29.11.2025

CESTAT Chennai Sets Aside Flawed Customs Valuation

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

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Chennai recently delivered a significant judgment in the case of M/s. Rajeshwari Copper Products vs. Commissioner of Customs, Tuticorin. This case, revolving around the rejection of declared transaction value for imported copper scrap, highlights critical aspects of customs valuation and the importance of adhering to statutory provisions.

Background of the Case

M/s. Rajeshwari Copper Products filed an appeal against the Order-in-Appeal No.49/2016-TTN (CUS) dated 19.04.2016, which upheld the rejection of the transaction value declared by the appellant for imported copper scrap. The appellant had declared the unit price of the copper scrap at $1.25 per kg in the Bill of Entry dated 29.10.2014. However, the customs authorities rejected this value, citing discrepancies based on contemporaneous import data and re-determined the value under Rules 3 and 4 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.

The appellant challenged the valuation, arguing that the rejection of the declared value was not in compliance with the mandatory provisions of Section 14 of the Customs Act and Rule 12 of the 2007 Rules. The appellant also contended that the reasons for rejecting the declared value were not adequately communicated, as required by law.

Key Issues in the Case

The case revolved around the following key issues:
1. Rejection of Declared Transaction Value: The customs authorities rejected the declared value of the imported goods, citing doubts about its accuracy and truthfulness.
2. Adherence to Rule 12 of the Customs Valuation Rules: The appellant argued that the customs authorities failed to follow the mandatory provisions of Rule 12, which require the proper officer to provide written reasons for doubting the declared value.
3. Use of Contemporaneous Import Data: The customs authorities relied on NIDB data to justify the rejection of the declared value. However, the appellant contended that the data referred to different items, quantities, and countries of origin, making it irrelevant for comparison.
The Tribunal’s Observations

The Hon’ble Tribunal, comprising (Member Judicial) and (Member Technical), carefully examined the orders of the lower authorities and the arguments presented by both parties. The Tribunal made the following observations:
1. Non-Adherence to Rule 12: The Tribunal noted that the customs authorities failed to adhere to the mandatory provisions of Rule 12, which require the proper officer to provide written reasons for doubting the declared value. This failure rendered the rejection of the transaction value unsustainable.
2. Flawed Use of NIDB Data: The Tribunal found that the NIDB data referred to in the Order-in-Original was not relevant to the imported goods in question. The items were different, and there was no specific mention of the country of origin or comparable quantities.
3. Supreme Court Precedent: The Tribunal referred to the judgment of the Hon’ble Supreme Court in Century Metal Recycling Private Limited vs. Union of India, which emphasized the importance of adhering to Section 14 and Rule 12 in customs valuation. The Supreme Court held that transaction value should not be rejected without reasonable doubt and corroborative evidence.
Final Decision

Based on its observations, the Tribunal concluded that the impugned order was flawed and not sustainable. It set aside the order, providing relief to M/s. Rajeshwari Copper Products.

Key Takeaways

This judgment underscores the importance of following statutory provisions in customs valuation cases. It highlights the need for customs authorities to provide clear and cogent reasons for rejecting declared transaction values and to ensure that any comparison with contemporaneous import data is relevant and accurate.

The case also serves as a reminder of the significance of judicial precedents, such as the Century Metal Recycling judgment, in guiding the interpretation and application of customs laws.

Conclusion

The decision in the case of M/s. Rajeshwari Copper Products is a landmark ruling that reinforces the principles of transparency, fairness, and adherence to statutory mandates in customs valuation. It is a testament to the importance of ensuring that importers are treated fairly and that their declared values are not rejected arbitrarily. This judgment will undoubtedly serve as a guiding light for similar cases in the future, promoting a more equitable and consistent approach to customs assessments.

Source: CESTAT Chennai

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
November 29, 2025
CESTAT Mumbai Sets Aside Anti-Dumping Duty Order in KPL International Case
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 28.11.2025

CESTAT Mumbai Sets Aside Anti-Dumping Duty Order in KPL International Case

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

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Mumbai, recently delivered its decision in the case of KPL International Limited vs. Commissioner of Customs (NS-I), concerning the levy of anti-dumping duty (ADD) on imported goods. The case revolved around the classification of imported goods—whether they were “homopolymers” or “copolymers”—and the applicability of anti-dumping duty under relevant notifications.

Background of the Case

KPL International Limited imported “polyvinyl chloride, copolymer solvin 550GA (suspension polymerization)” from Belgium between June 2015 and March 2017. The dispute arose when the customs authorities alleged that the company had not discharged anti-dumping duty on these imports, claiming the goods fell under the category of “homopolymers” subject to ADD. The appellant argued that the imported goods were “copolymers,” which are explicitly excluded from the scope of anti-dumping duty as per Notification No. 26/2014-Customs (ADD).

The Commissioner of Customs (NS-I), Nhava Sheva, had earlier confirmed a differential duty liability of ₹34,25,436 and imposed penalties under Section 114A of the Customs Act, 1962. However, KPL International Limited contended that the technical submissions regarding the chemical composition of the goods were not adequately considered.

Tribunal’s Observations

The Hon’ble Tribunal, comprising (Member Technical) and (Member Judicial), noted several deficiencies in the impugned order:
1. Non-Consideration of Technical Submissions: The Tribunal observed that the lower authority failed to address the appellant’s arguments regarding the classification of the goods as “copolymers” rather than “homopolymers.” The appellant had relied on specific exclusions mentioned in the anti-dumping duty notification and provided evidence of the chemical composition of the goods.
2. Deficient Reasoning: The Tribunal highlighted that the impugned order lacked a proper examination of the merits of the submissions and did not provide a “speaking order” as required under Section 17(5) and Section 28 of the Customs Act, 1962.
3. Self-Assessment and Re-Assessment: While the customs authorities emphasized the responsibility of importers under the self-assessment mechanism, the Tribunal clarified that re-assessment under Section 17 of the Customs Act is equally important and must be validated by proper findings.
Final Decision

The Tribunal set aside the impugned order and remanded the matter back to the original authority for a fresh decision. It directed the original authority to re-examine the submissions and issue a proper speaking order addressing the technical arguments and legal provisions.

Key Takeaways
1. Importance of Speaking Orders: The case underscores the necessity for authorities to provide detailed reasoning and address all submissions while confirming duty liabilities.
2. Classification Matters: Proper classification of goods is critical in determining the applicability of duties, and technical arguments must be thoroughly examined.
3. Role of Self-Assessment: While self-assessment places added responsibility on importers, it does not absolve authorities from their obligation to re-assess and validate duty liabilities.
Conclusion

The remand of this case highlights the importance of procedural fairness and thorough examination in customs disputes. Importers and authorities alike must ensure compliance with legal requirements and proper classification of goods to avoid prolonged litigation. As the matter returns to the original authority, all eyes will be on the fresh decision and its implications for similar cases in the future.

Source: CESTAT Mumbai

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
November 28, 2025
Bombay High Court Directs Customs to Refund ₹35.37 Lakh with Interest to Importer for Undelivered Goods
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 28.11.2025

Bombay High Court Directs Customs to Refund ₹35.37 Lakh with Interest to Importer for Undelivered Goods

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

In a landmark judgment, the Bombay High Court has ruled in favor of M/s. Ajay Industrial Corporation Ltd., directing the Assistant Commissioner of Customs (Refund) to refund ₹35,37,358/- in customs duty along with 9% interest. This decision comes after a prolonged legal battle that highlights the challenges faced by importers due to administrative delays and inter-departmental disputes.

The Case Overview

The case revolved around a consignment of 100 metric tons of Polyvinyl Chloride Resin Suspension Grade 5 imported by M/s. Ajay Industrial Corporation Ltd. in April 2022. Despite paying the customs duty in full, the company never received the goods, which were either short-landed or pilfered during transit. The petitioner was caught in a bureaucratic deadlock between the Customs Department (Respondent No. 1) and the Mumbai Port Authority (Respondent No. 2), with both parties shifting blame onto each other.

The petitioner made repeated attempts to resolve the issue, including filing complaints, conducting joint surveys, and lodging grievances. However, the Customs Department refused to process the refund application, citing procedural deficiencies and the absence of a “closure letter” for the Bill of Entry. This led the petitioner to approach the Bombay High Court for relief.

Key Arguments

Petitioner’s Submission

The petitioner argued that it had fulfilled all statutory obligations, paid the customs duty, and made diligent efforts to trace the goods. Despite this, the company was denied its rightful refund due to administrative inaction and inter-departmental disputes. The petitioner relied on Sections 13, 23, and 27 of the Customs Act, 1962, which provide for the remission and refund of customs duty in cases where goods are lost, destroyed, or pilfered before clearance for home consumption.

Customs Department’s Defense

The Customs Department contended that the refund claim was premature, as the Bill of Entry had not been formally closed due to unresolved issues with the Port Authority and the Shipping Line. They argued that the liability for the lost goods lay with the Port Authority, not the Customs Department, and that the petitioner had an alternative remedy under Section 128 of the Customs Act to file an appeal.

Port Authority’s Defense 

The Mumbai Port Authority maintained that the goods were short-landed and never came into their custody for delivery. They issued a Short Landing Certificate to the petitioner but denied any liability for the loss of goods or the refund of customs duty.

The Court’s Decision

After thoroughly analyzing the case, the Bombay High Court ruled in favor of the petitioner. The Court emphasized the following key points:
1. Statutory Entitlement to Refund: The Court held that the petitioner’s case fell under Section 23 of the Customs Act, 1962, which mandates the remission of duty on goods lost or destroyed before clearance for home consumption. Since the goods were never received, the customs duty paid by the petitioner was deemed refundable.
2. Administrative Inaction: The Court criticized the Customs Department and Port Authority for their bureaucratic deadlock, which forced the petitioner to pursue the matter for nearly three years. The Court stated that the petitioner, who acted in good faith, should not suffer due to inter-departmental disputes.
3. Interest on Refund: The Court directed the Customs Department to refund the customs duty along with 9% interest, as per Section 27A of the Customs Act, 1962. The interest is to be calculated from the date of payment until the actual date of refund.
4. Inter-Departmental Liability: The Court refrained from adjudicating the inter-departmental dispute between the Customs Department and the Port Authority. However, it clarified that the petitioner’s refund claim should not be delayed due to this dispute.
Implications of the Judgment

This judgment is a significant win for importers, as it reinforces their statutory rights under the Customs Act, 1962. It sends a strong message to public authorities to act fairly and efficiently, ensuring that administrative hurdles do not deprive businesses of their lawful dues. The Court’s decision also highlights the importance of transparency and accountability in resolving inter-departmental disputes.

Conclusion

The Bombay High Court’s ruling in favor of M/s. Ajay Industrial Corporation Ltd. is a testament to the judiciary’s role in upholding the rights of businesses and ensuring justice in the face of administrative challenges. This case serves as a reminder to public authorities to prioritize the interests of taxpayers and businesses, fostering an environment of trust and ease of doing business.

The judgment not only provides relief to the petitioner but also sets a precedent for similar cases, ensuring that importers are not unfairly burdened due to procedural delays or inter-departmental conflicts. As the Court rightly stated, the petitioner’s refund is a statutory entitlement, not a discretionary relief, and must be honored without further delay.

Listen to this on our #YouTube Channel

Source: Bombay High Court

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
November 28, 2025
CESTAT Kolkata Quashes Customs Duty Demands Over Disputed Certificates of Origin

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 27.11.2025

CESTAT Kolkata Quashes Customs Duty Demands Over Disputed Certificates of Origin

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

In a landmark decision, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench, Kolkata, has delivered a significant judgment in favor of M/s. United Sales Agency, setting aside two appeals related to customs duty demands. The case revolved around the authenticity of Certificates of Origin (COO) submitted by the appellant for availing preferential customs duty benefits under Notification No. 46/2011-Cus. dated 01.06.2011.

Background of the Case

M/s. United Sales Agency, a Kolkata-based importer, had imported bicycles from M/s. Seawa Industries (M) SDN, BHD, Malaysia, availing preferential customs duty benefits based on Certificates of Origin. However, discrepancies in the COO led to a Show Cause Notice issued by the Customs Department, alleging that the COO was inauthentic. The adjudicating authority subsequently denied the exemption benefit and demanded differential customs duty of Rs. 33,17,607/- for one consignment and Rs. 1,02,94,248/- for six earlier consignments imported between 2021 and 2022. The appellant challenged these orders before the CESTAT.

Key Arguments by the Appellant 

The appellant contended that the rejection of the COO was based solely on a letter from the FTA Cell, Directorate of International Customs, C.B.I.C., which referred to a verification report from the Malaysian authorities. However, the appellant argued that this verification report was never provided to them, violating the principles of natural justice. Without access to the report, the appellant was unable to defend their case effectively.

Additionally, the appellant argued that the six earlier consignments were assessed and cleared on a self-assessment basis, and the Customs Department had not challenged these assessments. They cited the Supreme Court judgment in ITC Ltd. v. Commissioner of Central Excise, Kolkata-IV [2019 (368) E.L.T. 216 (S.C.)], which held that demands for differential duty cannot be sustained without challenging the original assessment.

CESTAT’s Observations and Final Order 

The Tribunal noted that the Department relied on the FTA Cell’s letter dated 27.01.2023, which itself was based on a verification report from the Malaysian authorities. However, the verification report was not provided to the appellant, making the Department’s reliance on the letter akin to hearsay evidence. The Tribunal emphasized that the principles of natural justice were not adhered to, as the appellant was not given access to the verification report.

In the case of the six earlier consignments, the Tribunal observed that the Department failed to verify the authenticity of the respective COOs and did not challenge the self-assessed Bills of Entry. Citing the Supreme Court’s judgment in ITC Ltd., the Tribunal held that the confirmed demand of Rs. 1,02,94,248/- was legally unsustainable.

Furthermore, the Tribunal set aside the confiscation and redemption fine of Rs. 25,00,000/- imposed by the adjudicating authority, as the imported goods were no longer available with the Revenue.

Conclusion

The CESTAT’s decision to set aside both appeals is a significant victory for M/s. United Sales Agency and a reminder of the importance of adhering to the principles of natural justice in adjudication proceedings. The judgment underscores the necessity for the Customs Department to provide all relevant documents to the appellants and to follow due process when contesting self-assessed Bills of Entry.

This case serves as a precedent for importers facing similar issues and highlights the importance of transparency and fairness in customs assessments. M/s. United Sales Agency has been granted consequential relief as per law, marking a positive outcome for the appellant.

Source: CESTAT Kolkata

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com

November 27, 2025
CESTAT Chennai Sets Aside Rejection of Shipping Bill Amendment and Upholds Exporter’s Right to Service Tax Refund
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 27.11.2025

CESTAT Chennai Sets Aside Rejection of Shipping Bill Amendment and Upholds Exporter’s Right to Service Tax Refund

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

In a significant judgment, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chennai, has ruled in favor of M/s. Nissan Motor India Private Limited in Customs Appeal No. 41250 of 2015. The case revolved around the rejection of a request to amend shipping bills to claim a refund of service tax under Notification No. 52/2011-ST dated 30.12.2011.

Background of the Case

Nissan Motor India, engaged in the export of motor cars through Chennai/Ennore Port, sought a refund of service tax paid on specified services as a percentage of the FOB value of goods exported. However, the company failed to make the required declaration in its shipping bills at the time of export, which is a procedural requirement under the notification. Upon realizing the oversight, Nissan approached the Customs Authorities to amend the shipping bills to include the declaration, enabling them to claim the refund.

The Assistant Commissioner of Customs rejected the request, citing that the declaration was not made at the time of filing the shipping bills and amendments could not be considered post-export. Subsequently, Nissan filed an appeal with the Commissioner of Customs (Appeals-II), who upheld the rejection. Aggrieved by this decision, Nissan escalated the matter to CESTAT Chennai.

Arguments Presented

The appellant’s consultant, argued that the non-mention of the declaration was a procedural lapse and should not result in the denial of benefits intended for exporters. He cited precedents from various High Courts, including the Gujarat High Court (Reliance Industries Ltd.), Kerala High Court (Saint Gobain India Pvt. Ltd.), and Madras High Court (Pasha International), where similar procedural errors were rectified to ensure exporters received their rightful benefits.

On the other hand, the Revenue’s representative, contended that the appeal should be dismissed as the declaration was not made at the time of export. She referred to the CESTAT Chennai decision in the case of M/s. J.K. Tyre and Industries Limited, which involved a different context of converting shipping bills under the NFEI Scheme to the drawback scheme.

The Tribunal’s Decision 

After hearing both sides and reviewing the appeal records, the Hon’ble Member (Technical), delivered the final verdict on November 26, 2025. The Tribunal emphasized the importance of Section 149 of the Customs Act, 1962, which allows amendments to shipping bills if documentary evidence existed at the time of export. It was noted that Notification No. 52/2011-ST was in effect when the shipping bills were filed, and the government’s policy is to promote exports and avoid taxing them.

The Tribunal found that the lower authorities had not provided valid reasons for rejecting the amendment request, despite the existence of necessary documentary evidence. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief as per the law.

Key Takeaways
1. Procedural Lapses Should Not Deny Benefits: The judgment reinforces the principle that procedural errors should not prevent exporters from availing benefits they are entitled to under the law.
2. Section 149 of the Customs Act: The Tribunal highlighted the discretionary power of customs authorities to amend shipping bills if documentary evidence existed at the time of export.
3. Precedents Matter: The Tribunal relied on similar judgments from various High Courts, emphasizing the importance of consistency in legal decisions.
4. Promoting Exports: The decision aligns with the government’s policy to encourage exports and ensure that taxes are not exported.
Conclusion

This landmark ruling by CESTAT Chennai is a win for exporters, ensuring that procedural lapses do not hinder their ability to claim rightful benefits. It underscores the importance of a fair and balanced approach by authorities in dealing with procedural errors, especially when the intent and eligibility of the exporter are clear. This decision will undoubtedly serve as a precedent for similar cases in the future, promoting a more exporter-friendly environment in India.

Listen to this on our #YouTube Channel

Source: CESTAT Chennai

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
November 27, 2025
CESTAT Delhi Sets Aside DRI Duty Demand on Imported Aircraft
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 26.11.2025

CESTAT Delhi Sets Aside DRI Duty Demand on Imported Aircraft

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

In a landmark judgment, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has ruled in favor of M/s. Decore Exxoils Pvt. Ltd., setting aside the order passed by the Additional Director General (Adjudication), Directorate of Revenue Intelligence (DRI), New Delhi. The case revolved around the alleged misuse of an exemption notification related to the import of an aircraft and its spare parts, which led to a demand for differential customs duty amounting to Rs. 8.84 crore, along with penalties and interest.

Background of the Case

M/s. Decore Exxoils Pvt. Ltd., formerly known as Bhaskar Essoils Pvt. Ltd., is a company engaged in non-scheduled air taxi services and charter operations. The company imported a Learjet 60XR aircraft in December 2010, claiming exemption under Notification No. 21/2002-Cus and Notification No. 6/2006-CE. The exemption was granted based on the condition that the aircraft would be used exclusively for non-scheduled air transport services.

However, in June 2015, the DRI issued a show-cause notice alleging that the company had violated the conditions of the exemption notification. The notice claimed that the aircraft was primarily used for private purposes by the promoters and their families, rather than for non-scheduled air transport services. The DRI also alleged that the company failed to issue individual passenger tickets and publish tariffs, which are requirements under the Civil Aviation Requirements (CAR) 2010.

Tribunal’s Observations 

The case was heard by Hon’ble Justice (President) and Hon’ble (Member – Technical). After a detailed examination of the submissions made by both parties, the Tribunal ruled in favor of M/s. Decore Exxoils Pvt. Ltd., citing the following key points:
1. Compliance with Exemption Notification: The Tribunal referred to previous judgments, including Commissioner of Customs (Preventive), New Delhi vs. Global Vectra Helicorp Ltd., which clarified that non-scheduled operators are allowed to operate revenue charter flights for related entities. The Tribunal concluded that the appellant had not violated Condition 104 of the Exemption Notification, as the aircraft was used for non-scheduled air transport services, including charter services.
2. Non-Issuance of Tickets: The Tribunal held that the non-issuance of individual tickets does not violate CAR 2010. It was noted that the appellant issued invoices for chartered flights, which is permissible under the CAR guidelines.
3. Extended Period of Limitation: The Tribunal found that the invocation of the extended period of limitation under Section 28(4) of the Customs Act was unjustified. It emphasized that suppression of facts must be deliberate and intended to evade payment of duty. In this case, there was no evidence to suggest that the appellant had deliberately suppressed information or acted with fraudulent intent.
Final Verdict

The Tribunal set aside the impugned order dated 26.09.2017, ruling that the demand for differential customs duty, penalties, and interest could not be sustained. The appeal filed by M/s. Decore Exxoils Pvt. Ltd. was allowed, marking a significant victory for the company.

Key Takeaways

This judgment highlights the importance of adhering to the conditions of exemption notifications while also emphasizing the need for authorities to establish deliberate intent when invoking the extended period of limitation under Section 28(4) of the Customs Act. It also clarifies the scope of non-scheduled air transport services under CAR 2010, providing clarity for operators in the aviation industry.

Listen to this on our #YouTube Channel

Source: CESTAT Delhi

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
November 26, 2025
CESTAT Chennai Quashes Penalties Imposed Under Customs Act in Duty Drawback Fraud
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 26.11.2025

CESTAT Chennai Quashes Penalties Imposed Under Customs Act in Duty Drawback Fraud

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

In a significant judgment, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chennai, has set aside penalties imposed on M/s. Trans Asian Shipping Services (P) Ltd. and its employee, in a case involving alleged manipulation of shipping documents and fraudulent duty drawback claims. The judgment, delivered by Hon’ble, Member (Technical), on November 25, 2025, has brought clarity to the responsibilities of shipping liners and their employees in export transactions.

Background of the Case

The case originated from an investigation by the Directorate of Revenue Intelligence (DRI), Chennai, which alleged that three exporters—Pathi Fashions, Starwin Exports, and S & H Inc—had engaged in fraudulent activities, including exports under fictitious names, inflated export values, non-realization of export proceeds, and encashment of drawback benefits through newly opened bank accounts. The investigation revealed discrepancies in export documentation, including the issuance of two sets of Bills of Lading (BLs) for the same consignments, with different ports of discharge—Jebel Ali (Dubai) and Southampton (UK).

The Commissioner of Customs and Central Excise imposed penalties on M/s. Trans Asian Shipping Services and Mr. Lakshmanan under Sections 114(i) and 114(iii) of the Customs Act, 1962, alleging that they had abetted the fraud by issuing falsified shipping documents.

Key Arguments by the Appellants 

The appellants, represented by Advocate, argued that:
1. The containers were stuffed and sealed in the presence of Customs officials, and the appellants had no knowledge of the cargo contents.
2. The Master Bill of Lading (MBL) issued by the appellants only specified Dubai as the port of discharge, while the House Bill of Lading (HBL) issued by freight forwarders mentioned Southampton, UK.
3. The appellants had no direct relationship with the exporters and were not involved in the fraudulent activities.
4. The penalties imposed were based on incorrect legal provisions, and the adjudicating authority had traversed beyond the scope of the Show Cause Notice (SCN).
Tribunal’s Observations and Decision

After carefully examining the submissions, evidence, and records, the Tribunal made the following key observations:
- The appellants issued only one Master Bill of Lading with Dubai as the port of discharge, and there was no evidence of falsification or issuance of duplicate BLs.
- The appellants had no direct knowledge of the cargo contents, as their role was limited to providing containers and issuing the Master BL.
- The fraudulent duty drawback claims were processed using the Shipping Bill and House BL, which were submitted by the exporters and freight forwarders, not the appellants.
- The Customs officials responsible for examining the cargo at the time of stuffing failed to detect the alleged undervaluation and other discrepancies, indicating systemic lapses in the examination process.
- The penalties imposed under Sections 114(i) and 114(iii) of the Customs Act were not applicable, as the goods were not prohibited or restricted for export, and the appellants were not proven to have acted with wrongful intent or knowledge.
The Tribunal concluded that the appellants were not beneficiaries of the fraudulent activities and had no role in facilitating the fraud. It also emphasized that the adjudicating authority had erred by invoking incorrect penal provisions and altering the charges without issuing a corrigendum or providing proper notice to the appellants.

Final Order

The Tribunal set aside the penalties imposed under the three impugned Orders-in-Original and allowed all six appeals filed by the appellants with consequential benefits as per the law.

Key Takeaways

This judgment highlights the importance of adhering to due process and ensuring that penalties are imposed under the correct legal provisions. It also underscores the need for robust customs examination procedures to prevent fraudulent activities and protect the integrity of export transactions. The Tribunal’s decision serves as a reminder that penalties cannot be imposed without clear evidence of intent or active facilitation of fraud.

This case is a landmark ruling that reinforces the principles of natural justice and provides clarity on the role and responsibilities of shipping liners and their employees in export operations. It is a significant step toward ensuring fairness and accountability in customs adjudication processes.

Source: CESTAT Chennai

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
November 26, 2025
CESTAT Mumbai- Procedural Lapses Cannot Deny SEZ Exemption Under Section 26 of SEZ Act, 2005
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 25.11.2025

CESTAT Mumbai- Procedural Lapses Cannot Deny SEZ Exemption Under Section 26 of SEZ Act, 2005

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

Introduction

In a significant development, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, has delivered a landmark judgment in the case of ACE Enterprises vs. Commissioner of CGST & Central Excise, Nashik. The ruling, issued on November 17, 2025, reaffirms the overriding authority of the Special Economic Zones (SEZ) Act, 2005, in granting exemption benefits to excisable goods supplied to SEZ units, even in cases of procedural lapses. This decision is a major win for businesses operating in SEZs and sets a precedent for similar cases in the future.

Background of the Case

The case revolved around M/s ACE Enterprises, a manufacturer of automobile parts and seat covers, which supplied goods to SEZ units without payment of central excise duty under Notification No. 58/2003-C.E. dated July 22, 2003. During an audit, the department alleged that the appellant failed to comply with procedural requirements, such as filing Form ARE-1 and submitting re-warehousing certificates, and did not reflect the clearances in their ER-1 returns. Consequently, a demand for ₹7,52,063/- in excise duty, along with interest and penalties, was raised against the appellant.

The appellant challenged the demand, arguing that the goods were supplied to SEZ units with proper documentation and recorded in their books of accounts. They contended that the exemption under Section 26 of the SEZ Act, 2005, should not be denied due to procedural lapses, as the SEZ Act provides overriding authority over other laws.

Key Issues Addressed

The Tribunal examined two critical issues:
1. Whether the appellant was eligible for exemption from central excise duty on goods supplied to SEZ units under the SEZ Act, 2005.
2. Whether the extended period of limitation and penalty under Section 11AC of the Central Excise Act, 1944, was applicable in this case.
The Tribunal analyzed the legal provisions of the SEZ Act, SEZ Rules, and relevant notifications, including Notification No. 58/2003-C.E. and Circular No. 29/2006-Cus. It also referred to landmark judgments, including GMR Aerospace Engineering Ltd. vs. Union of India and Commissioner of C. Ex. New Delhi vs. Hari Chand Shri Gopal, to arrive at its decision.

Key Takeaways from the Judgment
1. Exemption Benefits Under SEZ Act, 2005: The Tribunal emphasized that Section 26 of the SEZ Act, 2005, provides standalone exemptions for goods supplied to SEZ units. These exemptions cannot be denied due to non-compliance with procedural requirements under other laws or notifications. The SEZ Act has an overriding effect, as stated in Section 51, which ensures that its provisions take precedence over any inconsistent laws.
2. Procedural Lapses Are Not Grounds for Denial: The Tribunal highlighted that procedural lapses, such as non-filing of Form ARE-1 or non-submission of re-warehousing certificates, cannot be used to deny exemption benefits under the SEZ Act. The appellant had provided substantial evidence, including invoices, transportation receipts, and SEZ gate entry records, to establish that the goods were indeed supplied to SEZ units.
3. Extended Period of Limitation and Penalty: The Tribunal rejected the department’s claim of suppression of facts and intention to evade duty. It ruled that the appellant had acted in good faith and had substantially complied with the procedural requirements, making the invocation of the extended period of limitation and imposition of penalties unsustainable.
Implications of the Ruling

This judgment is a significant win for businesses operating in SEZs, as it reinforces the principle that exemptions under the SEZ Act cannot be denied due to procedural lapses. It also highlights the importance of the SEZ Act’s overriding effect, ensuring that its provisions are not undermined by conflicting requirements under other laws or notifications.

The Tribunal’s decision aligns with previous rulings by the Hon’ble Andhra Pradesh High Court and the Hon’ble Supreme Court, which upheld the primacy of the SEZ Act in granting exemptions. This consistency in judicial interpretation provides clarity and confidence to businesses, encouraging them to leverage the benefits of SEZs for their operations.

Conclusion

CESTAT Mumbai’s ruling in favor of M/s ACE Enterprises is a landmark decision that underscores the importance of the SEZ Act, 2005, in promoting exports and economic growth. By upholding the exemption benefits for SEZ supplies, the Tribunal has reinforced the principle that procedural lapses should not hinder the intent of the law. This judgment is expected to have far-reaching implications for businesses and policymakers, ensuring a more streamlined and business-friendly environment for SEZ operations.

Source: CESTAT Mumbai

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
November 25, 2025
Gujarat High Court Invalidates DRI Notice on Customs Duty for Crude Palm Kernel Oil Imports
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 25.11.2025

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

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

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

Background of the Case

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

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

Key Arguments

Petitioners’ Submissions:
1. Challenge to Circular No. 40/2001-CUS: The petitioners argued that the show cause notice was based on Circular No. 40/2001-CUS, which had been quashed by the Gujarat High Court in the case of Intercontinental (India) v. Union of India and upheld by the Supreme Court. The circular had sought to impose an end-use condition on exemption notifications, which was deemed unlawful.
2. Edible Grade Definition: The petitioners contended that the crude palm kernel oil imported by them met the standards of “edible grade” as per the Prevention of Food Adulteration Rules, 1955 and the Food Safety and Standards (Food Products and Food Additives) Regulations, 2011. They argued that the exemption notification did not require the oil to be fit for immediate human consumption, but only to meet the criteria for “edible grade.”
3. Past Practice: The petitioners highlighted that they had been availing the exemption for years without any objections from the authorities, and the sudden issuance of the show cause notice was unjustified.
Respondents’ Submissions:
1. End-Use Condition: The respondents argued that the exemption notification implicitly required the imported oil to be used for edible purposes, and since the crude palm kernel oil was imported for industrial use, it did not qualify for the concessional rate.
2. Misdeclaration Allegations: The respondents claimed that the petitioners had misdeclared the description of the imported goods to avail the exemption.
The Court’s Analysis and Judgment

The Court, led by Honourable Justice, delved into the legal provisions of the Customs Act, 1962, the Prevention of Food Adulteration Rules, 1955, and the Food Safety and Standards Regulations, 2011. The Court observed the following:
1. No End-Use Condition in Notification: The exemption notification did not stipulate any condition regarding the end-use of the imported goods. The Court reiterated that a circular cannot impose conditions that are not explicitly mentioned in the notification, as this would amount to rewriting the law.
2. Edible Grade vs. Edible Oil: The Court clarified that “edible grade” refers to the quality of the oil as per prescribed standards, and it is distinct from “edible oil,” which is fit for immediate human consumption. The crude palm kernel oil imported by the petitioners met the criteria for “edible grade” and was therefore eligible for the concessional rate.
3. Precedents and Legal Principles: The Court relied on previous judgments, including Intercontinental (India) v. Union of India and Supreme Oil Industries Limited v. Special Secretary, Finance (Taxation) Department, Government of West Bengal, to emphasize that exemption notifications must be interpreted based on their plain language without reading additional conditions into them.
Conclusion

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

Implications of the Judgment

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

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

Listen to this on our #YouTube Channel

Source: Gujarat High Court

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
November 25, 2025