2025-VIL-673-KER-CU
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CUSTOMS High Court Cases

Customs – Classification, Denial of benefit of Advance Authorization on account of mis-declaration of Goods - The goods were described as "fish protein" in import documents and Advance Authorization but on inspection revealed the actual imported items were "decalcified fish scale for collagen (fish protein)" as marked on packaging - The goods were classified under Custom Tariff Heading 0511 9190 instead of 3504 0099 as claimed by the importer - Whether mis-description of inputs imported under Advance Authorization scheme disentitle the benefit for nil duty benefit under Notification No.96/2009 dated 11.09.2009 – HELD – The mis-description of goods imported under Advance Authorization does not disentitle the importer from claiming nil duty benefit when the licensing authority has not found any breach of authorization conditions - Under the Foreign Trade (Development and Regulation) Act, the issuance and monitoring of Advance Authorization falls within DGFT's regulatory jurisdiction, not Customs authorities - Since both Chapter 5 and Chapter 35 items attract nil duty under Advance Authorization scheme, the classification difference becomes irrelevant for duty purposes – The Customs authorities cannot refuse exemption benefits on mis-representation allegations when the licensing authority has not questioned or cancelled the license. The same product was consistently imported throughout the period, and DGFT authorities did not view different descriptions as breach of authorization conditions - The Revenue's contention that benefit of concessional duty notification was not available due to alleged mis-declaration is rejected as the classification had no bearing on import legality under advance authorization scheme – The assessee appeal is allowed and the Revenue appeal is dismissed - Whether differential duty can be demanded when the licensing authority (DGFT) has not objected to or cancelled the advance authorization despite the alleged mis-declaration – HELD - The Court set aside the demand for differential duty for both past imports and live transactions, holding that the assessee was entitled to nil duty benefit under the advance authorization scheme regardless of the nomenclature used for describing the imported goods, as long as the licensing authority had not cancelled or objected to the authorization.
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