2025-VIL-292-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs classification, Advance Authorization Scheme, Export Obligation Discharge Certificate (EODC) - Appellant obtained Advance Authorizations (AAs) from the DGFT to import duty-free certain inputs/raw materials, including Aluminium Foils on the condition that the appellant fulfilled the export obligation of exporting "Alu/ Alu Foil (PVC 60 MIC/ OPA 25 MIC/ALU 50 MIC) +-10%" - Department alleged that the appellant had wrongly classified the inputs / raw materials under CTH 7607 19 91 to match the CTH provided in the AAs, and that the goods were actually classifiable under CTH 7607 11 90 – Demand of differential customs duty along with interest and penalty - Whether the Customs tariff classification of the imported materials is relevant for allowing exemption from customs duty against the Advance Authorizations, where such imported materials were covered for import in the AAs issued to the appellant – HELD - The customs tariff classification of the imported materials is not relevant for allowing exemption from customs duty against the Advance Authorizations, where such imported materials were covered for import in the AAs issued to the appellant. The Tribunal relied on several judicial precedents, including the decisions of the Supreme Court in Commissioner vs. Ratnamani Metals & Tubes Ltd. and Commissioner vs. Man Industries India Ltd., wherein it was held that the classification of the imported materials is not at all relevant for the purpose of allowing exemption from customs duty against Advance Authorizations where such imported materials were covered for import in the AAs issued to the appellants therein - the DGFT, being the nodal authority for granting the Advance Authorizations is responsible for formulating and implementing the Foreign Trade Policy, and its certification of the export obligation fulfilment is final and binding on the Customs authorities - the impugned order is set aside holding that the Customs authorities cannot deny the benefit of the Advance Authorization Scheme on the ground of the proposed change in customs tariff classification of the imported goods, where the EODC has been issued by the DGFT – The appeal is allowed - Whether the Customs authorities can deny the benefit of the Advance Authorization Scheme (Notification No. 18/2015-Cus) on account of the proposed change in customs tariff classification of the imported goods, where the EODC has been issued by the DGFT – HELD - Once the EODC has been issued by the DGFT, the Customs authorities cannot deny the benefit of the notification to the imported materials. The Tribunal relied on the judicial pronouncements in Aditya Birla Nuvo Ltd. vs. Commissioner of Customs and Hindustan Lever Limited vs. Commissioner of Customs, wherein it was held that where the export obligation had been fulfilled and EODC had been issued by the DGFT office, the Customs Authorities cannot deny the benefit of the notification to the imported materials.
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