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  • CESTAT Bangalore Ruled on Proper Classification of Scientific Instruments under Customs Tariff Act

    CESTAT Bangalore Ruled on Proper Classification of Scientific Instruments under Customs Tariff Act

    Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

    Date: 01.05.2026

    CESTAT Bangalore Ruled on Proper Classification of Scientific Instruments under Customs Tariff Act

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Bangalore recently adjudicated a significant case involving ITC Limited and the classification of scientific instruments imported for research and development. The dispute centered on whether these instruments should be classified under Customs Tariff Heading (CTH) 9032 or 9027, impacting the applicable duties and compliance requirements.

    Background of the Case

    ITC Limited, a DSIR-certified research facility, imported a set of scientific instruments including a Monodisperse Aerosol Generator, Aerodynamic Particle Sizer, Electrical Neutralizer, and Aerosol Diluter. These instruments are integral to the physical and chemical analysis of aerosols, a process essential for ITC’s R&D activities. The company declared the goods under CTH 9027, which covers instruments for physical or chemical analysis, and paid the corresponding duties.

    Customs Department’s Allegation

    The Customs Department alleged mis-declaration, reclassifying the goods under CTH 9032, which pertains to instruments for measuring or controlling variables like temperature, pressure, or humidity. This reclassification led to a demand for differential duty, interest, and penalties under Section 114A of the Customs Act, 1962. The department also invoked the extended period of limitation, claiming suppression or willful misstatement by ITC Limited.

    ITC Limited’s Defense

    ITC Limited argued that:

    1. The imported instruments function together as a system for physical and chemical analysis, not for measurement or control as defined under CTH 9032.
    2. The goods were appropriately described and classified in the Bill of Entry, matching the supplier’s commercial invoice and HS code.
    3. The issue was interpretational, not a case of suppression or willful misstatement.
    4. The extended period of limitation was wrongly invoked, as there was no evidence of evasion or concealment.

    Legal Provisions and Precedents

    • Chapter 90 of the Customs Tariff Act: CTH 9027 covers instruments for physical or chemical analysis, while CTH 9032 is for instruments measuring or controlling specific variables.
    • Chapter Note 3 and Section XVI Note 4: When a combination of machines contributes to a clearly defined function, classification should follow the function.
    • Supreme Court Precedents: Multiple judgments, including Pahwa Chemicals Pvt. Ltd. vs. CCE, emphasized that extended limitation requires proof of willful misstatement or suppression.

    Tribunal’s Findings

    The Tribunal found that:

    1. The aerosol generator and related instruments are used for generating and analyzing aerosols, not for measurement or control as per CTH 9032.
    2. The system does not operate in isolation and lacks mechanisms to measure or control parameters independently.
    3. The classification under CTH 9027 is appropriate, and the department’s invocation of extended limitation was unsustainable.
    4. The penalty and demand raised by the department were set aside.

    Outcome

    The appeal was allowed, and the impugned order was set aside. ITC Limited received consequential relief, affirming the correct classification under CTH 90278090.

    Key Takeaways for Importers

    1. Accurate Classification: Ensure goods are classified based on their actual function and use, supported by documentation.
    2. Documentation: Maintain clear records, including commercial invoices and technical descriptions, to support classification.
    3. Legal Awareness: Understand relevant tariff headings and legal notes to avoid disputes.
    4. Responding to Allegations: In case of misclassification allegations, demonstrate bona fide intent and absence of suppression.

    This case highlights the importance of precise classification and robust documentation in customs compliance for scientific instruments.

    Connected Matter

    Supreme Court reaffirms strict interpretation of β€˜Suppression of Facts’ u/s 11A of Central Excise Act

    Source: CESTAT Bangalore

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  • CESTAT Mumbai Clarifies Customs Classification of Imported Food Seasonings

    CESTAT Mumbai Clarifies Customs Classification of Imported Food Seasonings

    Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

    Date: 29.04.2026

    CESTAT Mumbai Clarifies Customs Classification of Imported Food Seasonings

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, recently delivered a significant judgment in the case of Godavari Udyog regarding the classification of imported food seasoning materials. This article explores the legal dispute, the arguments presented, and the Tribunal’s reasoning, providing clarity for importers and industry professionals dealing with food additives and seasonings.

    Background of the Case

    Godavari Udyog imported various food seasoning materials for snack foods, initially classifying them under Customs Tariff Item (CTI) 3302 10 10, which pertains to mixtures of odoriferous substances used as raw materials in industry. The customs authorities, based on laboratory test reports, sought to reclassify these goods under CTI 2103 90 40, which covers food preparations. This reclassification led to a show cause notice, fines, and penalties for Godavari Udyog.

    Ingredients and Laboratory Findings

    The imported seasonings contained ingredients such as:

    • Salt, onion powder, sugar, wheat flour, maltodextrin, garlic powder, lactic acid, natural herbs (parsley flakes, spearmint powder), hydrolyzed vegetable protein, natural onion flavour, natural yogurt flavour.
    • Dehydrated blends of whey, partially hydrogenated soybean oil, citric acid, natural food colours, paprika powder, turmeric extract, and nature identical flavours.
    • Maltodextrin, salt, dehydrated garlic, dextrose, encapsulated black pepper, cumin, red chili, natural paprika oleoresin, tricalcium phosphate.

    Laboratory analysis confirmed these were food preparations containing salt, carbohydrates, proteins, flavouring agents, and additives, free from alcohol.

    Legal Arguments

    Appellant’s Position

    Godavari Udyog argued that:

    1. The health certificate from the foreign port listed odoriferous substances (parsley, spearmint, paprika) as ingredients, which are covered under Heading 3302.
    2. The HSN Explanatory Notes to Heading 3302 include goods with odoriferous substances combined with diluents or carriers.
    3. According to the General Rules of Interpretation (GRI), mixtures should be classified based on the component giving the essential characterβ€”in this case, the odoriferous substances.
    4. Previous Tribunal decisions (Symrise Pvt. Ltd. and International Flavours and Fragrances India Pvt. Ltd.) supported their classification.

    Revenue’s Position

    The customs authorities maintained that the goods should be classified as food preparations under Heading 2103, arguing that the odoriferous substances were not the main constituent and referencing definitions from Wikipedia and HSN notes.

    Tribunal’s Analysis and Decision

    The Tribunal examined:

    • The HSN notes for Heading 3302, which cover mixtures of odoriferous substances (natural or synthetic) used as raw materials in industry.
    • The presence of parsley, spearmint, and paprika (essential oils and oleoresins) in the imported goods.
    • The misinterpretation by customs authorities that odoriferous substances must be predominant, whereas the law only requires their presence.

    The Tribunal referenced prior decisions, noting that Chapter Heading 3302 covers both natural and synthetic mixtures of odoriferous substances, and that food preparations based on these substances should not be classified under Heading 2106 or 2103.

    Outcome

    The Tribunal set aside the customs authorities’ order, allowing the appeal and confirming the classification under Heading 3302. This decision clarifies that food seasonings containing odoriferous substances, whether natural or synthetic, are to be classified as industrial raw materials under Heading 3302, not as food preparations under Heading 2103.

    Key Takeaways for Importers

    1. Ingredient Analysis: Importers should carefully review the composition of food seasonings, focusing on the presence of odoriferous substances.
    2. HSN Notes Reference: Classification should be guided by HSN Explanatory Notes and General Rules of Interpretation.
    3. Legal Precedents: Prior Tribunal decisions can provide valuable support in classification disputes.
    4. Documentation: Health certificates and laboratory reports are crucial evidence in customs proceedings.

    Conclusion

    The Godavari Udyog case sets an important precedent for the classification of imported food seasonings, emphasizing the role of odoriferous substances in determining tariff headings. Importers should ensure accurate classification to avoid penalties and leverage legal precedents when facing disputes.

    Source: CESTAT Mumbai

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  • β€œIntellectual Property Laws are protected under Indian Customs Border Control Laws”

    β€œIntellectual Property Laws are protected under Indian Customs Border Control Laws”

    Logo of Aadrikaa Law Offices featuring a gold emblem with scales, accompanied by the text 'Aadrikaa Law Offices (ALO) Your Own Law Office' on a dark red background.

    Aadrikaa Law Offices (ALO)- Customs I Trade Compliance I IDT Tax I Arbitration I Litigation

    Date: 04.02.2026

    β€œIntellectual Property Laws are protected under Indian Customs Border Control Laws”

    Adv Ravi Shekhar Jha
    Adv Ravi Shekhar Jha

    This Article has been written by Advocate Ravi Shekhar Jha- BALLB & LLM (Constitutional Law) 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.comor on his Mobile +91-9999005379.

    ​​ ​​  β€‹  β€‹ ​​ ​

    Summary: Customs and Intellectual Property Rights (IPRs)

    This short Article provides an overview of the Indian Customs’ measures for protecting Intellectual Property Rights (IPRs) at the border. ​ It outlines the procedures, laws, and rules for IPR registration, enforcement, interdiction, determination, and disposal of infringing goods. ​

    Key Points

    Types of IPRs Protected by Customs ​

    • Trademarks Act, 1999 ​
    • Patents Act, 1970 ​
    • Geographical Indications of Goods (Registration and Protection) Act, 1999 ​
    • Copyright Act, 1957 ​
    • Designs Act, 2000 ​

    Customs Interdiction of Infringing Goods ​

    • Legal Basis: Section 11 of the Customs Act empowers the Central Government to prohibit import/export of goods violating IPRs. ​
    • Notification: Notification No. ​ 51/2010-Cus. (NT) prohibits the import of goods infringing IPRs. ​
    • Conditions: Prohibition is subject to the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 enforced through M.F. (D.R.) Notification No. 47/2007-Cus. (N.T.) dated 8th May, 2007 as amended.

    Rule 2. Definitions. 

    (a) “goods infringing intellectual property rights” means any goods which are made, reproduced, put into circulation or otherwise used in breach of the intellectual property laws in India or outside India and without the consent of the right holder or a person duly authorized to do so by the right holder;

    (b) “intellectual property” means a copyright as defined in the Copyright Act, 1957, trade mark as defined in the Trade Marks Act,1999, 1 [* * * *] design as defined in the Designs Act, 2000 and geographical indications as defined in the Geographical Indications of Goods (Registration and Protection) Act, 1999;

    (c) “Intellectual property law” means the Copyright Act, 1957, the Trade Marks Act,1999, 1 [* * * *] the Designs Act, 2000 or the Geographical Indications of Goods (Registration and Protection) Act, 1999;

    (d) “right holder” means a natural person or a legal entity, which according to the laws in force is to be regarded as the owner of protected intellectual property right, its successors in title, or its duly authorized exclusive licensee as well as an individual, a corporation or an association authorized by any of the aforesaid persons to protect its rights.

    Procedure for IPR Recordation with Customs:

    • Online Application: Submit applications at https://ipr.icegate.gov.in/IPR/homePage
    • Required Documents:
      • Registration certificate or proof of ownership. ​
      • Demand draft details/Online Payment through ICEGATE Portal/Payment Proof of INR 2000.00 only
      • Power of Attorney in the name of the Right Holder or the Authorized representative. ​
      • Statement of exclusivity. ​
      • Digital images of genuine and infringing goods. ​
      • IEC code. ​
      • Description of geographical indications (if applicable). ​

    Indemnity Bond

    • Protects Customs authorities from liability for detaining goods suspected of infringement. ​

    General Bond vs. Centralized Bond

    • General Bond: Requires consignment-specific bonds for each interdiction. ​
    • Centralized Bond: A running bond applicable across India, with a single Bond Registration Number (BRN) for all rights registered by the rights holder. ​

    Detention of Suspected Infringing Goods ​

    • Notification: Customs informs the importer and rights holder of the detention. ​
    • Action by Rights Holder:
      • Join proceedings within 5 days. ​
      • Inspect goods and take action within 10 working days (extendable by 10 more days). ​
      • Provide necessary bonds and evidence of infringement.
    • Maximum Detention Period for deciding the matter: 10 working days for regular goods; 3 working days for perishable goods. (Rule 7)

    Rule 11. Disposal of infringing goods:

    • (1) Where upon determination by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, it is found that the goods detained or seized have infringed intellectual property rights, and have been confiscated under section 111(d) of the Customs Act, 1962 and no legal proceedings are pending in relation to such determination, the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall, destroy the goods under official supervision or dispose them outside the normal channels of commerce after obtaining ‘no objection’ or concurrence of the right holder or his authorized representative :
    • Provided that if the right holder or his authorized representative does not oppose or react to the mode of disposal as proposed by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, within twenty working days after having been informed, or within such extended period as may have been granted by the Commissioner at the request of the right holder, not exceeding another twenty working days, he shall be deemed to have concurred with the mode of disposal as proposed by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be :
    • Provided further that the costs toward destruction, demurrage and detention charges incurred till the time of destruction or disposal, as the case may be, shall be borne by the right holder.
    • (2) There shall not be allowed the re-exportation of the goods infringing intellectual property rights in an unaltered state.
    • (3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may on his own, or at the request of the right holder, retain samples of goods infringing intellectual property rights prior to their destruction or disposal and provide the same to the right holder or importer if such samples are needed as evidence in pending or future litigation.

    Rule 12. Exclusion of baggage and De-minimis Imports:

    • Goods of a non-commercial nature contained in personal baggage or sent in small consignments intended for personal use of the importer are not subject to the above Rules.

    Ex Officio Action ​

    • Customs can suspend clearance of goods on its own initiative if there is prima facie evidence of infringement. Or at the written request of the Rights holder, as the case maybe.
    • Rights holder must comply with recordable requirements within 5 days. ​

    Post-Detention Procedure

    • Show Cause Notice: Issued to the importer and shared with the rights holder. ​
    • Adjudication: Includes importer’s reply and personal hearing. ​
    • Confiscation: If goods are found infringing, they are confiscated. ​

    Disposal/Destruction of Infringing Goods ​

    • Process: Confiscated goods are destroyed or disposed of outside normal commerce channels. ​
    • Rights Holder’s Consent: Required for destruction/disposal. ​
    • Samples: Provided to the rights holder upon request. ​

    Informing Customs of Infringing Consignments ​

    • Rights holders can notify Customs via email, fax, or post at the relevant Customs Station or Risk Management Division. ​

    This Short Article serves as a comprehensive guide for rights holders, Customs officers, importers, and other stakeholders involved in IPR enforcement at Indian borders. ​

    Source: CBIC, ICEGATE, Customs Act 1962

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  • CESTAT Kolkata Quashes Confiscation of β‚Ή15 Lakh Cash

    CESTAT Kolkata Quashes Confiscation of β‚Ή15 Lakh Cash

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 16.09.2025

    CESTAT Kolkata Quashes Confiscation of β‚Ή15 Lakh Cash​ ​

    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 ruled in favor of the appellant, Appellant in a case involving the confiscation of Indian currency worth Rs. 15,00,000 and the imposition of a penalty under Section 114 of the Customs Act, 1962. ​The judgment, delivered by Hon’ble, Member (Judicial), on September 15, 2025, sets a significant precedent in cases involving alleged illegal currency transportation.

    Background of the Case

    The case originated from an incident on November 20, 2019, when Indian currency amounting to Rs. ​ 15,00,000 was seized from Appellant near Rabindranagar, Tripura, by a joint team of Customs Preventive Force and BSF personnel. The authorities alleged that the currency was intended for illegal export to Bangladesh through the unfenced border area. ​ Subsequently, Appellant claimed ownership of the seized currency, explaining its legitimate source.

    A Show Cause Notice was issued to the appellant, citing contradictory statements about the location and circumstances of the seizure. ​ While one part of the notice stated that the currency was recovered near the unfenced border area at 17:45 hours, another part mentioned that a person was apprehended moving suspiciously toward the border at 18:40 hours. ​ These inconsistencies formed the crux of the appellant’s defense.

    Source: CESTAT Kolkata

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  • Supreme Court- Crude Degummed Soyabean Oil Not an Agricultural Product

    Supreme Court- Crude Degummed Soyabean Oil Not an Agricultural Product

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 16.09.2025

    Supreme Court- Crude Degummed Soyabean Oil Not an Agricultural Product​ ​ ​ Β 

    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 delivered on May 14, 2025, the Supreme Court of India allowed the appeal of Noble Resources and Trading India Private Limited (formerly Andagro Services Pvt. ​ Ltd.) against the Union of India and others. ​ The case revolved around the classification of crude degummed soyabean oil and its eligibility for duty exemption under the Export-Import (EXIM) Policy of 2002-2007. ​

    Background of the Case

    Noble Resources, a two-star export house, had imported crude degummed soyabean oil under a duty-free credit entitlement (DFCE) certificate issued as per the EXIM Policy. The company claimed exemption from customs duty under Notification No. ​ 53/2003-Cus. dated April 1, 2003. ​ However, the customs department denied the exemption, arguing that crude degummed soyabean oil was an agricultural product and thus excluded from the benefits of the notification. ​

    The Assistant Commissioner of Customs, in an order dated January 9, 2007, upheld the department’s view and demanded duties amounting to Rs. ​ 1,00,38,321. This decision was later affirmed by the Gujarat High Court in 2019. ​ Noble Resources then approached the Supreme Court.

    Source: Supreme Court

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  • CESTAT Chennai Set Aside Duty Demand on Misrepresented Licenses

    CESTAT Chennai Set Aside Duty Demand on Misrepresented Licenses

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 11.09.2025

    CESTAT Chennai Set Aside Duty Demand on Misrepresented Licenses​ ​ ​ Β 

    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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  • CESTAT Chennai Sets Aside Misclassification Allegations​

    CESTAT Chennai Sets Aside Misclassification Allegations​

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 10.09.2025

    CESTAT Chennai Sets Aside Misclassification Allegations​ ​ ​ ​ ​

    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 victory for M/s. Gravity Ventures Pvt. ​ Ltd., the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai, has set aside allegations of misclassification and misdeclaration of imported goods. The case revolved around the classification of non-woven interlining materials imported by the company, which were detained by the Customs Department, leading to a prolonged legal battle. ​

    Background of the Case

    Gravity Ventures had filed Bill of Entry No. ​ 7384974 dated 02.04.2020 for the import of various non-woven interlining materials. ​ The company classified the goods under specific Customs Tariff Headings (CTH) based on the Country of Origin Certificate and invoices provided by the foreign supplier. ​ The Customs Department, however, disputed the classification and proposed alternative CTHs, leading to demands for differential duty, penalties, and fines. ​

    The department alleged that the company had misdeclared the goods to evade customs duty. ​ This resulted in the detention of the goods and subsequent provisional release only after the company filed writ petitions before the Hon’ble High Court of Madras. ​ The High Court directed the Customs Department to provisionally release the goods upon execution of a bond and bank guarantee.

    Source: CESTAT Chennai

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  • Announcement

    Announcement

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 08.09.2025

    Global Conference on Fundamentals of Importing into the EU, UK, and India

    How to Register:

    Register by 22 September 2025 via the QR Code on the Flyer or by Google Form Link . Registration is completely free! ​ Don’t miss this opportunity to learn from the best in the field.

    Source: ITI, CTC

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  • CESTAT Chennai Confirms Classification and Exemption Eligibility for Float Glass Imports from ASEAN

    CESTAT Chennai Confirms Classification and Exemption Eligibility for Float Glass Imports from ASEAN

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 03.09.2025

    CESTAT Chennai Confirms Classification and Exemption Eligibility for Float Glass Imports from ASEAN​ ​ ​ ​ ​

    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 ruled in favor of M/s. Float Glass Centre, a regular importer of Clear Float Glass (CFG), in a case concerning the classification of imported goods and the denial of exemption benefits under Notification No. 46/2011-Cus dated 01.06.2011. ​ This decision, pronounced on September 2, 2025, sets a significant precedent for importers navigating complex classification disputes and exemption claims.

    Background of the Case

    M/s. Float Glass Centre, based in Chennai, imports Clear Float Glass with an absorbent layer, which they classify under Customs Tariff Heading (CTH) 7005 1090. ​ This classification entitles them to a β€˜NIL’ rate of Basic Customs Duty (BCD) under Sl. ​ No. 934 of Notification No. ​ 46/2011-Cus, provided the goods are imported from ASEAN countries. ​ However, the Assessing Officer denied this classification, citing discrepancies in the Country-of-Origin certificate, which mentioned a different CTH (7005 2990). ​ Consequently, the appellant filed bills of entry under protest and challenged the denial of exemption benefits before the Commissioner of Customs (Appeals), who rejected their claims. This led to the present appeals before the Tribunal.

    Source: CESTAT Chennai

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  • Supreme Court- Procedural Errors in Shipping Bills Cannot Defeat Export Incentives

    Supreme Court- Procedural Errors in Shipping Bills Cannot Defeat Export Incentives

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 02.09.2025

    Supreme Court- Procedural Errors in Shipping Bills Cannot Defeat Export Incentives​ ​ ​ ​ ​

    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 delivered on August 19, 2025, the Supreme Court of India has provided much-needed clarity on the rights of exporters under the Merchandise Exports from India Scheme (MEIS). The case, M/S Shah Nanji Nagsi Exports Pvt. ​ Ltd. v. Union of India & Ors. ​, highlights the importance of balancing procedural compliance with substantive entitlements under beneficial export schemes. ​

    Background of the Case

    The appellant, M/S Shah Nanji Nagsi Exports Pvt. ​ Ltd., a private company engaged in the export of corn starch, faced a procedural hurdle that jeopardized its claim for MEIS benefits. Between July and October 2017, the company filed 54 shipping bills electronically through its customs broker. ​ However, due to an inadvertent clerical error, the declaration of intent to claim MEIS benefits was marked as β€œNo” instead of β€œYes.” This error prevented the shipping bills from being transmitted to the Directorate General of Foreign Trade (DGFT), thereby blocking the processing of the MEIS claim. ​

    Despite the correction of the shipping bills under Section 149 of the Customs Act, 1962, the DGFT refused to process the claim, citing systemic constraints. ​ The Policy Relaxation Committee (PRC) also rejected the claim without assigning reasons or granting the appellant an opportunity to be heard. ​ Aggrieved, the appellant approached the Bombay High Court, which dismissed the writ petition, relegating the appellant to pursue remedies against the customs broker.

    Source: Supreme Court

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