Case Digest on Rulings Related to Export and Import Policy

India’s Export and Import (EXIM) Policy, officially known as the Foreign Trade Policy (FTP), is a framework implemented by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry. This policy regulates and facilitates India’s international trade in goods and services, aiming to boost exports, reduce trade imbalances, and integrate the Indian economy with global markets. The FTP is notified for a five-year period and is revised periodically to reflect global economic shifts and domestic priorities. The current policy, extended from the 2015–2020 cycle due to the COVID-19 pandemic, was replaced by the new Foreign Trade Policy 2023, which adopts a long-term and dynamic approach without a fixed end date, promoting ease of doing business and digital trade facilitation. The UAE Tax Law Is Evolving — Stay Ahead Before Clients Find Someone Who Already Is. Register Now The EXIM policy categorizes goods as freely importable or exportable, restricted, or prohibited, with corresponding procedures and licensing requirements. It provides a legal basis for both incentives and restrictions, balancing the need for promoting exports with safeguarding domestic industries and essential imports. Major schemes under the policy include the Remission of Duties and Taxes on Exported Products (RoDTEP), Advance Authorization, and the Export Promotion Capital Goods (EPCG) Scheme, all aimed at reducing the cost burden on exporters and enhancing competitiveness. The policy emphasizes sector-specific growth in areas such as electronics, engineering goods, pharmaceuticals, textiles, and services exports. Special focus is also placed on exports from Special Economic Zones (SEZs), e-commerce exports, and digitization of trade processes. The policy encourages Make in India and self-reliance by reducing import dependency, especially on critical sectors like electronics, defense, and energy. India’s EXIM policy also complies with WTO norms while leveraging bilateral and multilateral trade agreements to gain preferential market access. With a goal to increase India's share in global trade, the policy is instrumental in employment generation, industrial development, and achieving a robust trade surplus. Goods Exempted from Customs Duty May be Subject to Levy of Additional Duty: Madras HC Transasia Bio-Medicals Ltd vs Union of India CITATION: 2025 TAXSCAN (HC) 512 The Madras High Court ruled that exemption from basic customs duty under a specific notification does not automatically extend to additional duties levied under separate statutory provisions. The petitioner challenged the imposition of a 4% additional duty under Section 3(5) of the Customs Tariff Act, 1975, despite having an exemption from basic customs duty. The Court held that the Customs Act and the Customs Tariff Act function independently, and unless an exemption expressly covers additional duties, they remain payable. Rejection of Application for Brand Rate for Exported Goods Under Duty Drawback Rules solely on Limitation: CESTAT Remands Matter for Reconsideration John Deere India Pvt Ltd vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 182 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) addressed the rejection of an exporter’s application for fixation of brand rate of drawback under Rule 7 of the Customs and Central Excise Duties Drawback Rules, 1995. The application was dismissed by the Department solely on the ground of limitation, as it was filed beyond the prescribed time. The CESTAT observed that the adjudicating authority failed to consider the merits of the case and had not provided an opportunity to the appellant to explain the delay or justify the claim. The Tribunal held that procedural delay alone should not defeat substantive claims, especially when export incentives are involved. The CESTAT set aside the order of rejection and remanded the matter for fresh adjudication in accordance with law, allowing the appellant to present its case in full. Foreign Trade Policy Provision Cannot Authorise Levy Of Interest u/s 28AA Of Foreign Trade Act: Kerala H BRADDOCK INFOTECH PRIVATE LIMITED vs JOINT DIRECTOR GENERAL OF FOREIGN TRADECITATION: 2024 TAXSCAN (HC) 2436 The Kerala High Court has ruled that provisions within the Foreign Trade Policy (FTP) cannot independently authorize the imposition of interest under Section 28AA of the Customs Act, 1962. This decision arose from a case where customs authorities demanded interest from an exporter for delayed duty payments, citing FTP provisions. The court emphasized that while the FTP can outline procedural aspects, it lacks the legislative authority to impose financial liabilities such as interest. Such impositions must be grounded in statutory provisions enacted by the legislature. The court concluded that the levy of interest solely based on FTP provisions is legally untenable, reinforcing the principle that executive policies cannot override or extend statutory mandates. Any Goods Which Fall under Category of Equipments Apparatus are Freely Importable as Per FTP: CESTAT sets aside Confiscation of Goods M/s.PS Bedi & Co Pvt. Ltd. vs The Commissioner of Customs CITATION: 2024 TAXSCAN (CESTAT) 340 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that goods classified as "equipment" or "apparatus" are freely importable under the Foreign Trade Policy (FTP), overturning a prior confiscation order. The case involved M/s. PS Enterprises, whose imported goods were seized by customs authorities on the grounds of being restricted items. The CESTAT found that the goods fell within the "freely importable" category under the FTP, and that the customs authorities had misclassified them. The tribunal emphasized that unless a product is explicitly restricted or prohibited, it should not be subject to confiscation. Supreme Court upholds Pre-Import Condition to Claim IGST and GST Compensation Cess under Advance Authorisation Scheme UNION OF INDIA & ORS vs COSMO FILMS LIMITED CITATION: 2023 TAXSCAN (SC) 177 The Supreme Court has upheld the validity of the 'pre-import condition' under the Foreign Trade Policy (FTP) 2015–2020 and the corresponding Handbook of Procedures, which governs the Advance Authorisation Scheme. According to Notification Nos. 33/2015-20 and 79/2015-Customs, importers claiming exemption from Integrated GST and GST compensation cess must ensure that the import of inputs takes place prior to the issuance of the export order. The Court affirmed the government's power to impose such conditions to prevent misuse of tax exemptions and to ensure that benefits are granted strictly for inputs used in the manufacture of export goods. Foreign Markings Ipso Facto does not prove Smuggled Nature of Goods: CESTAT Shri Gagan Deorah vs Commissioner of CGST & Central Excise & Customs CITATION: 2023 TAXSCAN (CESTAT) 443 The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that goods bearing foreign markings cannot, by themselves, be presumed to be smuggled. In this case, the Revenue had seized goods solely on the basis of foreign labels, claiming they were illegally imported. The Tribunal held that the burden of proof lies on the Department to establish smuggling with concrete evidence. Mere presence of foreign markings is insufficient to justify confiscation under the Customs Act. The tribunal reaffirmed that assumptions or suspicions do not equate to proof and that authorities must rely on substantive evidence to support claims of illegal importation, ensuring protection against arbitrary seizures. PSI Certificate furnished as per Appendix 28 of FTP: CESTAT sets aside demand of Redemption Fine ARS Steels & Alloy International Pvt. Ltd. vs Commissioner of Customs CITATION: 2023 TAXSCAN (CESTAT) 138 The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled in favor of ARS Steels & Alloy International Pvt. Ltd., setting aside the redemption fine imposed by customs authorities. The case centered on the import of used steel melting scrap, where the importer presented a Pre-Shipment Inspection (PSI) certificate as mandated by Appendix 28 of the Foreign Trade Policy (FTP). The Customs authorities had previously rejected the certificate, citing non-compliance and imposed a redemption fine. However, the CESTAT determined that the PSI certificate met the necessary requirements, and thus, the redemption fine was unwarranted. Establishment of Identity and Genuine Export of CPC: CESTAT allows Free Import under FT Shri Balaji Ceramic Products vs Commissioner of CustomsCITATION: 2023 TAXSCAN (CESTAT) 128 The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled in favor of Shri Balaji Ceramic Products, allowing the free import of 19,506.20 kg of Calcined Petroleum Coke (CPC) under the Foreign Trade Policy (FTP). The company had exported the CPC to a Saudi Arabian buyer, who later rejected the goods, prompting their re-import without any export incentives claimed. The customs authorities confiscated the goods and imposed a Rs. 6 lakh penalty under Section 112(b) of the Customs Act. Upon appeal, the CESTAT determined that the export and re-import were genuine, with the identity of the goods established. Since the export occurred before restrictions were imposed, the re-import was deemed freely importable under the FTP. DGFT has no Authority to Violate FTP, Power Vests only with Central Govt: Karnataka HC Grants Relief to Patanjali Foods M/S PATANJALI FOODS LIMITED vs UNION OF INDIA CITATION: 2023 TAXSCAN (HC) 631 The Karnataka High Court ruled that the Director General of Foreign Trade (DGFT) lacks authority to amend the Foreign Trade Policy (FTP), a power reserved solely for the Central Government. This decision came after Patanjali Foods Limited challenged a DGFT public notice that altered procedural conditions for importing crude sunflower seed oil, affecting their contract with a Swiss supplier. The court emphasized that only the Central Government can formulate or amend the FTP through official notifications. The court granted relief to Patanjali Foods, reinforcing that the DGFT cannot unilaterally modify the FTP. Relief to EMBIO Ltd: Supreme Court rules S. 11(2) of FT Act Does Not Authorise Penalty Imposition for Export Obligation Breach under Licence M/S. EMBIO LIMITED vs DIRECTOR GENERAL OF FOREIGN TRADE & ORS.CITATION: 2024 TAXSCAN (SC) 214 The Supreme Court of India provided relief to EMBIO Ltd by ruling that Section 11(2) of the Foreign Trade (Development and Regulation) Act, 1992, does not authorize the imposition of penalties for breaches of export obligations under licenses. The case stemmed from a penalty imposed on EMBIO Ltd for failing to fulfill export obligations tied to a license initially granted to its predecessor, Karnataka Biotics. The Court emphasized that penal provisions must be strictly construed and that non-fulfillment of export obligations, without any fraudulent intent, does not constitute a contravention warranting penalties under Section 11(2) of the Act. Import of restricted Goods in violation of ITC(HS) Import Policy and Non-Declaration of Correct Value: CESTAT confirms Penalty Aggarwal Traders vs Commissioner of CustomsCITATION: 2023 TAXSCAN (CESTAT) 195 The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld the penalties imposed on M/s Remi Sales and Engineering Ltd for importing restricted goods in violation of the ITC (HS) Import Policy and for non-declaration of the correct transactional value. The company imported old and used Digital Multifunction Printing and Copying Machines without the mandatory import license, classifying them under a freely importable category. The CESTAT rejected the appellant’s contentions that the import was bona fide and without misdeclaration. It held that the import violated both classification norms and valuation rules under the Customs Act, 1962. The Tribunal affirmed the imposition of a redemption fine and penalty, stressing that strict compliance with import regulations is essential to maintain trade discipline and revenue enforcement. Licensing Authority and Policy Relaxation Committee allowed two years to fulfil Export obligation: CESTAT quashes order against IND Synergy IND Synergy Ltd. vs Commissioner of Customs, Visakhapatnam CITATION: 2022 TAXSCAN (CESTAT) 538 The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed an order against IND Synergy concerning the fulfillment of export obligations under the Export Promotion Capital Goods (EPCG) Scheme. The dispute arose when the Directorate General of Foreign Trade (DGFT) denied an extension for IND Synergy to meet its export obligations. However, the Licensing Authority and the Policy Relaxation Committee had previously granted the company a two-year extension to fulfill these obligations. The CESTAT ruled that the DGFT could not override the decisions of these competent authorities. The tribunal emphasized that once an extension is granted by the appropriate bodies, it is binding, and any contrary action by the DGFT is unsustainable. Goods to Iran delivered in UAE: CESTAT holds Exporter not liable for ‘Change of Landing Port’ Instructions by Importer, Quashes Penalty JANKI DASS RICE MILLS vs C.C.-Mundra CITATION: 2022 TAXSCAN (CESTAT) 386 The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that an exporter is not liable for penalties when goods intended for Iran were delivered to the UAE due to the importer's instructions. The case involved an Indian exporter who shipped goods to Iran; however, the importer redirected the shipment to the UAE. Customs authorities imposed penalties, alleging a violation of export regulations. The CESTAT observed that the exporter had fulfilled all obligations under the Letter of Credit and export documentation. The tribunal emphasized that penalizing the exporter for the importer's unilateral decision would be unjust. The CESTAT quashed the penalties, reinforcing the principle that exporters should not be held accountable for post-shipment changes made by importers. Delhi HC refuses to exempt Importers, Exporters from Charges pertaining to Ground Rent, Demurrage, Container Detention Charges during COVID-19 Lockdown POLYTECH TRADE FOUNDATION vs UNION OF INDIA AND ORS. CITATION: 2021 TAXSCAN (HC) 277 The Delhi High Court, in the case of Polytech trade foundation v. Union of India & Others, dismissed a batch of 22 petitions filed by various importers and exporters seeking exemption from ground rent, demurrage, and container detention charges incurred during the COVID-19 lockdown. The petitioners contended that the nationwide lockdown constituted a force majeure event, and thus they should be relieved from these charges due to the disruption in logistics and port operations. The Court held that such relief cannot be granted as it would interfere with existing contractual and statutory frameworks. The Court observed that port authorities and service providers continued operations during the pandemic despite challenges and that waiving charges would affect their financial viability. The judgment emphasized that contractual obligations remain enforceable even during extraordinary circumstances unless specifically waived or modified by competent authorities. DTA Entitlement against Deemed Exports: Madras HC directs CESTAT and Commissioner to decide the issue based on SC decision M/s.BAPL Industries Limited vs Union of Indi CITATION: 2021 TAXSCAN (HC) 299 The Madras High Court addressed the issue of entitlement to Domestic Tariff Area (DTA) benefits against deemed exports in the case of M/s. Syntel International Pvt. Ltd.,. The Court observed that both the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and the Commissioner had failed to consider the binding precedent set by the Supreme Court in an earlier decision involving Syntel. The High Court directed the authorities to reconsider the matter strictly in accordance with the Supreme Court's ruling. The Court highlighted that lower adjudicating bodies are obligated to follow the law laid down by the apex court, particularly in matters involving interpretation of export-related entitlements and incentives. The ruling ensures uniformity and legal certainty in the application of DTA benefit provisions under the Foreign Trade Policy in cases involving deemed exports. The matter was remanded back for fresh adjudication in light of the Supreme Court's verdict. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

Case Digest on Rulings Related to Export and Import Policy

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Case Digest on Rulings Related to Export and Import Policy

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