ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 11.09.2025
CESTAT Chennai Set Aside Duty Demand on Misrepresented Licenses
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 & Service Tax Appellate Tribunal (CESTAT), Chennai, has shed light on the legal nuances surrounding duty-free import licenses obtained through misrepresentation. The case, M/s. M.R. & Co. vs. Commissioner of Customs (Seaport – Export), highlights the distinction between fraudulent licenses and licenses obtained by misrepresentation, offering clarity on the rights of innocent transferee importers.
Background of the Case
The appellant, M/s. M.R. & Co., imported 13,940 kilograms of raw silk yarn valued at Rs. 1,64,31,703/- duty-free using Duty-Free Replenishment Scheme (DFRC) licenses procured from M/s. Shree Kuberappa & Sons. Investigations by the Directorate of Revenue Intelligence (DRI) revealed that the original exporter, M/s. Shree Kuberappa & Sons, had misrepresented facts to obtain these licenses fraudulently. Consequently, the Directorate General of Foreign Trade (DGFT) canceled the licenses in January 2010, years after the imports were made.
The Customs authorities issued a Show Cause Notice to M/s. M.R. & Co., demanding duty of Rs. 50,39,604/- along with interest and penalties, and held the imported goods liable for confiscation. Aggrieved by this order, the appellant filed an appeal before the Tribunal.
Source: CESTAT Chennai
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