CESTAT Kolkata allows SAFTA duty exemption on imported soya acid oil

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata, has ruled in favor of Vippy Industries Ltd., allowing the company to claim duty exemption under the South Asian Free Trade Agreement (SAFTA) for its imports of Soya Acid Oil from Bangladesh. This ruling reinforces the importance of preferential trade agreements and ensures that importers can avail themselves of legitimate exemptions under SAFTA.

Key Highlights of the Proceedings

1. Case Overview

Appellant: Vippy Industries Ltd.
Respondent: Commissioner of Customs (Preventive), Kolkata
Tribunal: CESTAT Kolkata
Date of Decision: 17th December 2024
Issue: Denial of SAFTA duty exemption for imported Soya Acid Oil from Bangladesh

2. Key Dispute

Vippy Industries imported Soya Acid Oil and claimed duty exemption under SAFTA Notification No. 99/2011-Customs.
Customs authorities rejected the exemption, questioning the origin of the goods and requesting additional verification.
The company paid customs duty under protest and later appealed the rejection.

3. Tribunal’s Observations & Findings

SAFTA Certificates of Origin were valid

The appellant provided genuine Certificates of Origin, proving the goods were wholly obtained from Bangladesh.

Customs’ denial of exemption was arbitrary

Similar past imports were granted SAFTA benefits, so denying Vippy Industries was inconsistent.

Importers can claim exemption after duty payment under protest

The tribunal ruled that paying duty under protest does not mean forfeiting exemption claims.

Lack of fair opportunity to submit documents

Customs authorities did not allow Vippy Industries to provide additional documents before rejecting the exemption.

4. Final Verdict

The CESTAT Kolkata ruled in favor of Vippy Industries, stating that the company fulfilled all conditions for SAFTA exemption.
Customs orders denying exemption were set aside.
Vippy Industries will receive a refund of wrongly paid customs duties.

5. Impact of the Judgment

Strengthens trade under SAFTA, ensuring fair treatment for importers.
Prevents arbitrary denials of exemptions by customs authorities.
Reinforces the importance of honoring valid Certificates of Origin.
Provides legal clarity for businesses availing preferential trade benefits.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

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Source: CESTAT Kolkata

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