2026-VIL-1040-CESTAT-MUM-CU
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CUSTOMS CESTAT Cases

Customs - Duty exemption on refined vegetable oils – Eligibility based on 'edible grade' classification irrespective of end-use - Respondents imported refined vegetable oils (peanut oil, sunflower oil, walnut oil, almond oil, and macadamia nut oil) classified under Customs Tariff Items 1508, 1512, and declared them as edible grade, seeking duty exemption under Serial Nos. 64 and 71 of Notification No. 50/2017-Customs dated 30.06.2017. The goods were tested by a Government-approved laboratory (FSSAI/NABL accredited) and confirmed to meet edible grade standards as per FSSAI regulations. However, the importer declared the intended end-use as cosmetics, pharmaceuticals, and personal care products rather than direct human consumption - Whether goods can qualify for customs duty exemption under Notification No. 50/2017-Customs if they are of 'edible grade' as per prescribed standards but are intended for non-food industrial use such as cosmetics and pharmaceuticals – HELD – The goods meeting the two essential conditions prescribed in the exemption notification i.e. classification under specified chapter headings and certification as 'refined and edible grade', are eligible for Customs duty exemption regardless of their declared end-use - The exemption notification contains no explicit condition regarding end-use. The supplementary note to Chapter 15 of the Customs Tariff Act defines 'edible grade' with reference to standards prescribed by FSSAI and the Prevention of Food Adulteration Rules based on quality parameters alone. Laboratory test reports confirming that imported goods conform to edible grade standards as per FSSAI regulations constitute sufficient evidence of meeting the statutory definition of 'edible grade' – The Circulars issued by the Board cannot impose additional conditions beyond what is expressly stated in the exemption notification, as circular instructions cannot restrict or modify the scope of a statutory exemption - The taxable event occurs at the point of import when goods are classified, and subsequent end-use is immaterial to determining duty eligibility. The Department's reliance on CBEC Circular No. 40/2001 imposing an end-use condition is legally unsustainable as it contradicts the notification and cannot override statutory provisions - The order passed by the Commissioner of Customs (Appeals), which extended customs duty exemption to the imported goods under Serial Nos. 64 and 71 of Notification No. 50/2017-Customs, is upheld as proper and legal - The appeal filed by the Revenue is dismissed
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