2026-VIL-268-CESTAT-MUM-CU
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CUSTOMS CESTAT Cases

Customs - Duty exemption under Advance Authorization Scheme - Appellant imported raw materials under the 'Advance Authorisation' scheme of the Foreign Trade Policy (FTP) and availed import duty/IGST exemption benefit under Notification No. 18/2015-Customs dated 01.04.2015. The Department alleged that there was no one-to-one correlation between the import of raw materials and its usage in the final products exported, and the appellants had not fulfilled the 'pre-import condition' as per the amended Notification No. 79/2017-Customs dated 13.10.2017 - Whether the appellants are eligible for duty-free import of raw materials/inputs under the Advance Authorization Scheme and whether the demand of IGST, interest, redemption fine, and penalties are sustainable – HELD - The appellants had fulfilled the export obligation in respect of all 19 Advance Authorizations, and obtained the Export Obligation Discharge Certificates (EODCs) from the DGFT authorities, which were duly accepted by the jurisdictional Customs authorities and the bonds executed by the appellants were cancelled. The Tribunal observed that the fulfilment of the notification conditions for duty-free importation of raw materials under Notification No. 18/2015-Customs dated 01.04.2015 comes to an end with the process of submitting the EODCs by the appellants and cancellation of the bonds by the Customs authorities - The present case is distinguished from the Supreme Court judgment in Cosmo Films Limited, as in the present case, the exports were completed prior to the imports, whereas in Cosmo Films, the exports were made after the imports - Further, the levy of interest, redemption fine, and penalty on the IGST demand are not legally sustainable, as the relevant provisions for the same were introduced in the Customs Tariff Act, 1975 only from 16.08.2024, which is after the disputed period - The impugned order is set aside and appeal is allowed
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