2025-VIL-1309-KAR-CU
  1. Home
  2. 2025-VIL-1309-KAR-CU

CUSTOMS High Court Cases

Customs – Import under Advance License, Non-fulfilment of minimum value addition condition - Respondents had obtained an Advance license for import of certain components for manufacturing and exporting complete electronic ventilation systems to Russia – The Authorities found that instead of importing components, Respondents had imported complete equipment in CKD-SKD condition and no further processing and manufacturing were carried out in India - Customs authorities issued a show-cause notice alleging that the assembly and testing undertaken on the imported goods did not constitute 'manufacture' - Whether the import effected by the respondents under the licenses issued by DGFT and the export obligations carried out by them were in violation of the license conditions and policy decision of the DGFT - HELD - As per the EXIM Policy 1997-2002, for export of goods against payment in Indian Rupees, a minimum value addition of 33% was required. However, the Tribunal itself had found that the actual value addition done by the respondents was only 5.18%, which was much below the required threshold. When the value addition was only 5.18% as recorded by the Tribunal, which was much below 33% for export of goods against payment in Indian Rupee under paragraph 11.7 of the EXIM policy, it could not be said that there was any increase in the intrinsic value of the export product by the Respondent - It is settled principles of law that an assessee claiming the benefit of an exemption notification must strictly comply with the conditions prescribed therein. The exemption provision has to be construed strictly, and the burden is on the assessee to establish that it satisfies the eligibility criteria. In the present case, since the Respondents failed to achieve the minimum value addition as mandated, they were not entitled to the exemption from payment of customs duty - The respondents had misrepresented the facts to the JDGFT while obtaining the Advance License, as the supporting manufacturer declared by them did not have the requisite manufacturing facilities. This would also disentitle them from the exemption under Sections 111(m) and 111(o) of the Customs Act - The impugned order of the CEGAT is set aside and the Revenue appeal is allowed
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

GSTR-9 & GSTR-9C of FY24-25
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?