ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 17.11.2025
Madras High Court Quashes Customs Orders on Wheat Gluten Import Under DFIA
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 Madras High Court, in a significant ruling on October 15, 2025, quashed multiple orders issued by the Additional Commissioner of Customs, Chennai II Commissionerate, regarding the import of Wheat Gluten under Duty-Free Import Authorisation (DFIA). The judgment, delivered by Honourable Justice, addressed a series of writ petitions filed by M/s. Parry Enterprises India Limited and M/s. Fame Shipping Agency, challenging the orders that denied duty exemption on imported Wheat Gluten.
Background of the Case
M/s. Parry Enterprises India Limited, engaged in importing and trading Wheat Gluten, and its licensed Custom Broker, M/s. Fame Shipping Agency, filed writ petitions against the Additional Commissioner of Customs. The dispute arose when the petitioners imported Wheat Gluten under DFIA, claiming exemption from customs duty as per a notification dated September 11, 2009. The DFIA was issued for the export of biscuits, and the petitioners argued that Wheat Gluten qualifies as Wheat Flour under the same classification.
The Customs Department, however, contended that Wheat Gluten is not covered under the DFIA license, which only allows the import of Wheat Flour. Consequently, the Department issued show-cause notices, demanding duty, cess, and penalties, and sought to confiscate the imported goods.
Petitioners’ Argument
The petitioners argued that the issue of whether Wheat Gluten qualifies as Wheat Flour had already been settled by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in multiple cases, including Uni Colloids Impex Pvt Ltd. vs. Commissioner of Customs (2014) and Unibourne Food Ingredients LLP vs. Commissioner of Customs, Mundra (2022). In these cases, CESTAT had consistently held that Wheat Gluten is classified as Wheat Flour with specific technical characteristics and is eligible for duty exemption under DFIA.
The petitioners contended that the Customs Department was bound by the decisions of CESTAT and could not take an independent view contrary to the established precedent.
Respondent’s Stand
The Customs Department argued that the petitioners were not entitled to the exemption as Wheat Gluten was not covered under the DFIA license. They further stated that the Department had not appealed against the CESTAT decisions due to monetary limits, but this did not preclude them from raising the issue in other cases. The Department also argued that the petitioners had an alternative remedy of appeal and questioned the maintainability of the writ petitions.
High Court’s Observations and Judgment
Justice rejected the Customs Department’s arguments and emphasized the importance of judicial discipline. The Court held that the Customs Department is bound by the decisions of higher appellate authorities, such as CESTAT, unless those decisions are overturned by a competent court. The Court referred to the Supreme Court’s judgment in Union of India vs. Kamlakshi Finance Corporation Ltd. (1991), which established that revenue officers must follow the orders of appellate authorities unreservedly.
The Court also dismissed the argument regarding the maintainability of the writ petitions, stating that the bar on entertaining writ petitions due to alternative remedies is not absolute, especially when the jurisdiction of the authority passing the orders is challenged.
Key Takeaways from the Judgment
Binding Nature of CESTAT Decisions: The Court reiterated that decisions of appellate authorities like CESTAT are binding on assessing officers unless overturned by a higher court.
Judicial Discipline: The judgment emphasized the importance of judicial discipline in ensuring consistency and fairness in the administration of tax laws.
Writ Petition Maintainability: The Court clarified that the availability of an alternative remedy does not bar the High Court from exercising its jurisdiction under Article 226 of the Constitution, particularly when the authority’s jurisdiction is in question.
Wheat Gluten Classification: The Court upheld CESTAT’s consistent stance that Wheat Gluten falls under the same classification as Wheat Flour and is eligible for duty exemption under DFIA.
Conclusion
This landmark judgment by the Madras High Court is a significant win for importers and exporters, as it reinforces the binding nature of CESTAT decisions and provides clarity on the classification of Wheat Gluten under DFIA. The ruling also underscores the judiciary’s role in ensuring that administrative authorities adhere to established legal precedents, thereby preventing undue harassment of businesses and ensuring consistency in the application of tax laws.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 04.11.2025
Madras High Court Strikes Down Customs Public Notice on GST for Auctioned Cargo
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 Madras High Court, in a landmark judgment delivered on October 23, 2025, quashed a Public Notice issued by the Joint Commissioner of Customs (Chennai-IV) dated February 12, 2021, regarding the applicability of GST on the clearance of uncleared/unclaimed cargo. The judgment was delivered by Hon’ble Justice in response to three writ petitions filed by M/s. National Association of Container Freight Stations and M/s. German Express Shipping Agency (India) Pvt. Ltd.
Background of the Case
The petitioners, who are Container Freight Stations (CFS), challenged the Public Notice issued by the Customs Department, which directed custodians not to collect GST on goods sold through auction under Section 48 of the Customs Act, 1962. The petitioners argued that the notice was contrary to the provisions of the Customs Act, 1962, and the Central Goods and Services Tax (CGST) Act, 2017, and was issued without jurisdiction.
The petitioners contended that the auction of unclaimed or uncleared cargo constitutes a supply of goods under Section 7(1) of the CGST Act, making it liable for GST under Section 9(1) of the CGST Act. They further argued that the custodian provides a service by auctioning the goods, which also attracts GST. The respondents, however, maintained that the bid amount for auctioned goods already includes IGST, and collecting GST on the bid amount would lead to double taxation.
Key Observations by the Court
The following key observations in the judgment:
Jurisdiction of Customs Authorities: The court held that the Customs Department does not have the jurisdiction to issue a Public Notice directing custodians not to collect GST. The authority to regulate GST collection lies solely with the GST authorities under the CGST Act.
Separate Taxable Transactions: The court clarified that IGST paid on import is a levy under Section 3(7) of the Customs Tariff Act read with Section 5 of the IGST Act, whereas GST on auction sales is a levy under Section 9 of the CGST Act. These are distinct transactions and cannot be considered as double taxation.
Auction Sale as Supply of Goods: The court emphasized that when goods are sold through auction, the title of the goods is transferred to the auction purchaser, and the goods lose their character as imported goods. The auction sale is a taxable supply under the CGST Act, and GST must be collected on the sale price.
Role of CFS as Service Providers: The court noted that CFS, as custodians under Sections 45 and 141(2) of the Customs Act, provide services such as storage, delivery, and auctioning of goods. These services are liable for GST, and custodians must collect and remit GST to the exchequer.
Judgment and Impact
The court quashed the Public Notice dated February 12, 2021, issued by the Joint Commissioner of Customs, declaring it as wholly without jurisdiction and contrary to the provisions of the CGST Act, 2017, and the Customs Act, 1962. The consequential notice issued by the Deputy Commissioner of Customs was also quashed.
This judgment reinforces the principle that customs authorities cannot interfere in matters related to GST collection, which falls under the exclusive domain of GST authorities. It also clarifies the distinction between IGST on imports and GST on auction sales, ensuring compliance with the legal framework.
Conclusion
The Madras High Court’s decision is a significant step in upholding the jurisdictional boundaries between customs and GST authorities. It provides clarity to custodians and auction purchasers regarding their tax liabilities and ensures that the process of auctioning unclaimed cargo is conducted in accordance with the law. This judgment is expected to have a far-reaching impact on the operations of Container Freight Stations and the interpretation of tax laws in similar cases.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 01.11.2025
Understanding the Legal Landscape of Importing Second-Hand Digital Multifunction Devices in India
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 importation of second-hand Digital Multifunction Devices (MFDs) has been a contentious issue in India, with various legal and regulatory challenges faced by importers. Recent judgments from the High Court of Madras and the Supreme Court of India have provided clarity on the matter, particularly regarding the provisional release of these goods under Section 110A of the Customs Act, 1962.
The Background
MFDs, which are highly specialized equipment used for printing, copying, and scanning, have been subject to scrutiny by the Customs Department. The primary concerns revolve around their categorization under import/export regulations, which classify items as prohibited, restricted, or freely importable. While importers argue that MFDs are freely importable, the Customs Department and other government bodies, such as the Ministry of Electronics and Information Technology (MEITY) and the Ministry of Environment, Forest and Climate Change (MoEFCC), have raised objections, claiming that these goods are restricted or prohibited.
Key Legal Developments
Provisional Release Under Section 110A of the Customs Act
Section 110A allows for the provisional release of seized goods during investigation or adjudication. This provision aims to prevent financial losses and operational delays for importers while ensuring that the Customs Department can continue its investigation. Importers are required to execute a bond or provide a bank guarantee to cover potential duties, fines, or penalties.
Madras High Court Judgments
In a landmark judgment dated 10th July 2025 (WP No. 29418 of 2024), the Madras High Court ruled in favor of importers, stating that MFDs qualify as Highly Specialized Equipment (HSE) under Clause 8 of the Compulsory Registration Order (CRO), 2021. The court emphasized that MFDs weighing more than 80 kg and imported in less than 100 units per model per year are exempt from the application of CRO, 2021. The court also clarified that the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, do not prohibit the import of MFDs, provided the required documents are submitted to the Customs Authorities.
Tanish Enterprises vs Commissioner of Customs– WP No. 29418 of 2024
The case involves importers seeking provisional release of second-hand digital multifunction devices (MFDs) detained by the Customs Department, which claimed the goods were restricted or prohibited. The petitioners argued that MFDs are freely importable as Highly Specialized Equipment (HSE) under the Compulsory Registration Order (CRO), 2021, and Foreign Trade Policy (FTP), 2023. The court ruled in favor of the petitioners, directing the Customs Department to provisionally release the goods under Section 110A of the Customs Act, 1962, subject to conditions, while leaving the final adjudication open.
Key Points:
Issue: Whether second-hand MFDs are freely importable or restricted items requiring BIS certification and DGFT authorization.
Petitioners’ Claim: MFDs qualify as Highly Specialized Equipment (HSE) and are exempt from restrictions under CRO, 2021, and FTP, 2023.
Respondents’ Claim: MFDs are restricted or prohibited items requiring compliance with BIS, DGFT, and environmental regulations.
Court’s Ruling: Directed provisional release of MFDs under Section 110A of the Customs Act, subject to conditions, and left final adjudication open.
Precedents: Previous rulings by the Madras High Court, Telangana High Court, and Supreme Court upheld the free importability of MFDs.
Provisional Release: Allows importers to access goods while investigations continue, preventing financial losses due to detention.
HD Printers vs Commissioner of Customs- Writ Petition No.39010 of 2025 and W.M.P.No.43694 of 2025
The case involves M/s. HD Printers, represented by its proprietor Mr. Jagan Kumar, filing a writ petition under Article 226 of the Constitution of India. The petitioner sought a Writ of Mandamus directing the Customs Department to allow the provisional release of 120 units of second-hand digital multifunction print and copying machines. These machines were imported and submitted for clearance with the required documentation, including a report from a DGFT-approved Chartered Engineer. The Customs Department had initially refused to release the goods, citing restrictions under the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016 (HOW Rules). However, the court referred to a previous judgment (W.P.No.29418 of 2024) and ruled that the case was covered under the earlier order, which allowed provisional release of similar goods. The court directed the Customs Department to release the goods provisionally, subject to conditions and final adjudication.
Key Points:
Petitioner: M/s. HD Printers.
Respondents: Commissioner, Additional Commissioner, and Deputy Commissioner of Customs, Chennai.
Issue: Provisional release of 120 second-hand digital multifunction print and copying machines.
Legal Basis: Article 226 of the Constitution of India and Section 110A of the Customs Act, 1962.
Customs Department’s Argument: Machines classified as “other wastes” under HOW Rules, 2016, requiring prior permission for import.
Court’s Decision: Directed provisional release of goods within four weeks, subject to conditions and final adjudication.
Reference Case: W.P.No.29418 of 2024, which allowed provisional release of similar goods.
Provisional Release Conditions: Execution of a simple bond for 100% of the enhanced value and payment of applicable GST.
Final Adjudication: Customs Department retains the right to reverse the provisional release order during final adjudication.
Maruti Enterprises vs Commissioner of Customs- WP No. 35987 of 2025
The case involves M/s. Maruti Enterprises, represented by its proprietor Gautam Sharma, filing a writ petition under Article 226 of the Constitution of India for the issuance of a writ of mandamus. The petitioner seeks the provisional release of two consignments of second-hand digital multifunction print and copying machines (MFDs) imported by them. The petitioner claims that the goods were examined by a DGFT-approved Chartered Engineer, who provided a report to the Customs Officer. Despite this, the Customs Department proceeded to forfeit the goods. The petitioner argues that the issue is covered by a previous order of the Madras High Court, which allowed the provisional release of similar goods under Section 110A of the Customs Act, 1962.
The court referred to the earlier judgment, which clarified that MFDs are not prohibited items under the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, and are freely importable. The court directed the Customs Department to grant provisional release of the goods within four weeks, subject to conditions as per the Customs Act, 1962. The provisional release is subject to final adjudication, and the Customs Department retains the authority to reverse the provisional release order during the final adjudication process.
Key Points:
Petitioner: M/s. Maruti Enterprises.
Respondents: Commissioner, Additional Commissioner, and Deputy Commissioner of Customs, Chennai.
Issue: Provisional release of two consignments of second-hand digital multifunction print and copying machines.
Legal Basis: Section 110A of the Customs Act, 1962, and Article 226 of the Constitution of India.
Court’s Reference: Previous Madras High Court order in WP No. 29418 of 2024, which allowed provisional release of similar goods.
Court’s Decision: Directed the Customs Department to grant provisional release within four weeks, subject to conditions under the Customs Act, 1962.
Provisional Release Conditions: Subject to final adjudication, and the Customs Department may reverse the provisional release order during the final adjudication process.
No Costs: The court disposed of the writ petition without imposing any costs.
Supreme Court Endorsement
The Supreme Court upheld the decision of the Telangana High Court, which had granted provisional release of MFDs under similar circumstances. This decision reinforced the stance that MFDs are freely importable and eligible for provisional release.
Atul Commodities Pvt. Ltd. & Ors. vs Commissioner of Customs- Civil Appeal Nos. 5259/2007, 3226/2007 and 3977/2007
The case revolves around whether second-hand photocopying machines imported by M/s Atul Commodities Pvt. Ltd. in January 2005 were “freely importable” as capital goods under the Foreign Trade Policy (FTP) 2004-09 or required a license for import. The Kerala High Court had ruled that such imports required a license, relying on policy circulars issued by the Directorate General of Foreign Trade (DGFT). However, the Supreme Court held that the DGFT circulars were clarificatory and not amendatory, and only the Central Government had the authority to amend the FTP under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992. The Court ruled that second-hand photocopying machines were “capital goods” and were freely importable under the FTP 2004-09. The Supreme Court allowed the appeal of M/s Atul Commodities Pvt. Ltd. and dismissed the appeals filed by the Department.
Key Points:
Issue: Whether second-hand photocopying machines imported in January 2005 were freely importable as “capital goods” or required a license under the FTP 2004-09.
High Court Decision: Kerala High Court ruled that the imports required a license, relying on DGFT circulars.
Supreme Court Decision: The Supreme Court held that DGFT circulars were clarificatory, not amendatory, and only the Central Government could amend the FTP under Section 5 of the Foreign Trade Act, 1992.
Outcome: The Supreme Court ruled that second-hand photocopying machines were “capital goods” and were freely importable under FTP 2004-09. The judgment of the Kerala High Court was set aside, and the Tribunal’s decision favoring M/s Atul Commodities Pvt. Ltd. was restored.
Final Verdict: M/s Atul Commodities Pvt. Ltd. won the case, and the Department’s appeals were dismissed.
Recent Judgments
Subsequent cases, such as WP No. 39010 of 2025 and WP No. 35987 of 2025, have followed the precedent set by the Madras High Court and the Supreme Court. These judgments have consistently directed the Customs Department to grant provisional release of MFDs, subject to conditions such as the execution of a bond and payment of applicable GST.
Notification on Special Economic Zones (Fourth Amendment) Rules, 2024
The document is a notification issued by the Ministry of Commerce and Industry, Department of Commerce, dated June 20, 2024. It announces the Special Economic Zones (Fourth Amendment) Rules, 2024, which amend the Special Economic Zones Rules, 2006. The amendments focus on rule 18, sub-rule (4), clause (d), specifically modifying the provisions related to reconditioning, repair, and re-engineering activities within Special Economic Zones (SEZs).
Key changes include:
Reconditioning, repair, and re-engineering are permitted under the condition that exports must have a one-to-one correlation with imports, and all processed products must be exported.
Non-hazardous metal and metal-alloy wastes generated from these activities may be sold in the Domestic Tariff Area (DTA) under certain conditions:
The waste must be in metallic, non-dispersible form without contaminants listed under Basel No. B1010 in Part D of Schedule III of the Hazardous and Other Wastes Rules, 2016.
Sale in the DTA is subject to payment of applicable customs duty and treated as import.
Such sales are allowed only to actual users or traders authorized by the State Pollution Control Board on a one-time basis.
Verification of specified documents by Customs Authority is required.
The rules come into effect upon publication in the Official Gazette. The notification also references previous amendments to the principal rules, last updated on June 6, 2024.
Key Takeaways for Importers
Provisional Release: Importers can seek provisional release of detained goods under Section 110A of the Customs Act, provided they fulfill the conditions set by the Customs Department.
Exemption Criteria: MFDs that meet the criteria for HSE under Clause 8 of CRO, 2021, are exempt from the application of the order. Importers must ensure their goods weigh more than 80 kg and are imported in less than 100 units per model per year.
Compliance with HOW Rules: Importers must submit the required documents as per Schedule VIII of the HOW Rules to the Customs Authorities at the time of import.
Final Adjudication: Provisional release does not guarantee the final outcome. The Customs Department retains the authority to reverse the provisional release order during final adjudication.
Conclusion
The legal clarity provided by the courts is a significant relief for importers of second-hand MFDs. However, it is crucial for importers to ensure compliance with all regulatory requirements and maintain proper documentation to avoid complications during the import process. As the legal landscape continues to evolve, staying updated on relevant judgments and notifications is essential for smooth business operations.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 09.10.2025
Extended Timeline for enforcement of BIS for MSME Domestics Manufacturer will also apply on Imports by MSME says Madras High Court
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 Madras High Court, in a significant ruling on September 25, 2025, disposed of a writ petition filed by M/s. Alankar Shipping and Trading Co. P. Ltd, directing the Customs Department to assess and clear imported goods without insisting on a Bureau of Indian Standards (BIS) Registration Certificate. The judgment, delivered by Honourable Justice, brought clarity to the applicability of the Plywood and Wooden Flush Door Shutters (Quality Control) Order, 2024, particularly concerning imports by Micro, Small, and Medium Enterprises (MSMEs).
Background of the Case
The petitioner, M/s. Alankar Shipping and Trading Co. P. Ltd, represented by its Managing Director, had imported 3,456 sheets of packing plywood from Vietnam, valued at USD 24,896.96. The goods arrived at Chennai on August 13, 2025, under a bill of lading dated July 29, 2025. The petitioner filed a writ petition under Article 226 of the Constitution of India, seeking a Writ of Mandamus to direct the Customs Department to assess and clear the goods covered under Bill of Entry No. 3836297 dated August 12, 2025, without requiring a BIS Registration Certificate.
The petitioner argued that the Quality Control Order (QCO), which mandates the use of standard marks, came into force on February 28, 2025, but its provisions were postponed until August 28, 2025. As a recognized Micro Enterprise under the MSME classification, the petitioner claimed exemption from the BIS requirement until the postponed date. However, the Customs Department refused to grant this exemption, citing a communication from the Ministry of Commerce and Industry dated March 19, 2025, which stated that the additional time period for compliance granted to MSMEs does not apply to imports.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 29.09.2025
Madras High Court Grants Provisional Release of Imported 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.
The Madurai Bench of the Madras High Court, presided over by Honourable Justice, has delivered a significant order in the case of M/s. Genuine Spices vs. The Commissioner of Customs & Others. The case revolved around the import of goods classified as roasted areca nuts, which were detained by customs authorities on grounds of alleged misdeclaration.
Background of the Case
M/s. Genuine Spices, represented by its proprietor, had imported goods under Bill of Entry No. 4225311 dated June 28, 2024. The customs authorities refused to clear the goods, claiming that they did not fall under the classification of roasted areca nuts. The petitioner, however, maintained that the goods were indeed roasted areca nuts and challenged the show cause notice issued by the respondents. The petitioner also highlighted the perishable nature of the goods and sought relief from the court to prevent their disposal by customs authorities.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 28.08.2025
Delegated Legislation in Indirect Taxes: Judicial Scrutiny under the Customs Act, 1962 & Indirect Taxes
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.
1. Constitutional Framework for Delegated Legislation
Article 245–246: Only Parliament/State legislatures can levy taxes; delegation cannot include “essential legislative functions.”
Article 265: “No tax shall be levied or collected except by authority of law.” Thus, a rule, notification, circular, or regulation cannot create/expand a tax liability without clear legislative sanction.
Doctrine of Excessive Delegation: Laid down inIn re Delhi Laws Act (1951 SCR 747), later reaffirmed in Avinder Singh v. State of Punjab (1979 1 SCC 137). Parliament may delegate the manner or details of implementation, but not the policy or essential features.
Judicial role: Courts test whether delegated instruments remain within the “parent Act” or trespass into taxation without statute.
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: Multiple sources- High Court, Indian Kanoon, Economic Times
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 28.08.2025
Madras High Court held that valuation must be based on the “transaction value” as per Section 14 of the Customs Act
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
On December 17, 2021, the Hon’ble High Court of Madras delivered a significant judgment in the case of M/s. IG International Private Limited vs. The Deputy Commissioner of Customs & Others (W.P. No. 6033 of 2020). The case revolved around the legality of a Valuation Alert Notice issued by the customs authorities and its impact on the assessment of imported goods. This judgment provides clarity on the scope of valuation alerts under the Customs Act, 1962, and their binding nature on importers and assessing officers.
Background of the Case
The petitioner, M/s. IG International Private Limited, challenged the Valuation Alert Notice dated May 8, 2017, issued by the customs authorities. The petitioner argued that the valuation alert was contrary to Section 14 of the Customs Act, 1962, and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The petitioner contended that the alert interfered with the assessment process by mandating the use of benchmark prices, which forced them to pay higher customs duties on imported apples, a perishable commodity.
The petitioner further argued that the valuation alert was not binding on assessing officers and that the assessment should be based on the “transaction value” declared by the importer unless there were valid reasons to doubt its accuracy.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 11.07.2025
Madras High Court Allows STPI Duty Exemption
In a landmark decision that provides much-needed clarity and relief to the IT and infrastructure sector, the Madras High Court has ruled in favour of Khivraj Tech Park Pvt. Ltd., granting it customs duty exemption for capital goods imported under the Software Technology Park of India (STPI) scheme despite a delayed approval from the Chennai Metropolitan Development Authority (CMDA).
Case Background
Khivraj Tech Park Pvt. Ltd., a recognized STPI unit, imported capital goods and claimed customs duty exemption under Notification No. 153/1993-Customs, which is available to STPI units for setting up or expanding infrastructure. However, the customs authorities rejected the exemption, citing that CMDA’s building plan approval was obtained only after the goods had been imported.
The authorities alleged that the condition of prior CMDA approval was a prerequisite for claiming exemption under the STPI scheme, and hence, the benefits were not admissible.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 04.07.2025
Madras High Court Quashes Customs Demand for EODCs Issued After 17 Years
The Madras High Court has quashed a Bond Enforcement cum Demand Notice issued by the Customs Department after a 17-year delay, citing it as inordinate and unreasonable. The case, filed by M/s Chemplast Sanmar Ltd., involved non-production of Export Obligation Discharge Certificates (EODCs) under the Advance Authorisation Scheme.
Background of the Case
Petitioner: M/s Chemplast Sanmar Ltd., a star export house and manufacturer of specialty chemicals
Period of Dispute: Imports made between 1998 and 2000 under 24 Advance Licences issued by DGFT
Customs Action: Issued show cause cum demand notice in 2019—17 years later, citing non-submission of EODCs
Petitioner’s Defense:
Produced EODCs for 13 out of 24 licences
Cited inability to retrieve remaining EODCs due to passage of time
Argued that such a long delay is unfair and violates principles of natural justice
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 03.07.2025
Madras HC Affirms DGFT’s Authority on Capital Goods Classification Under EPCG
The Madras High Court reaffirmed that the Customs Department cannot override the classification of capital goods as determined by the DGFT under the Export Promotion Capital Goods (EPCG) Scheme. The Court held that the customs authorities are bound by the EPCG licence issued by the DGFT unless it has been withdrawn or proved fraudulent.
Background of the Case
The appellant, M/s. Adyar Gate Hotel Ltd., imported lighting equipment and fittings in 1999 under an EPCG licence issued by the DGFT, which categorically classified the goods as capital goods. Despite this, the customs authorities denied concessional duty benefit, claiming the goods did not qualify as capital goods under Notification No. 28/97-Cus dated 01.04.1997.
The case underwent prolonged litigation for over two decades, involving:
Denial of concessional duty in 1999.
Multiple rounds of appeals before the CESTAT.
Remand by the CESTAT following CBEC Circular No. 62/2002, which favoured importers like hotels using goods for rendering services.
Refund finally granted in 2018, but interest on delayed refund remained disputed.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
