CESTAT Delhi Allows Importer To Claim Tax-Free Imports From Least Developed Countries Despite Licence Terms

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Customs authorities cannot deny duty-free benefits available to imports from Least Developed Countries merely because an import licence issued by the Directorate General of Foreign Trade refers to a separate concessional duty notification.

A coram of President Justice Dilip Gupta and Technical Member P.V. Subba Rao set aside a customs duty demand, along with interest, penalty, and redemption fine, against Yash Oro India Private Limited.

The court held that in the absence of any express bar, an importer cannot be denied an exemption that is otherwise available under law.

Refering to the license terms, the tribunak observed, "It does not provide that the benefit of any other Notification, which otherwise would be available to the appellant, cannot be availed of by the appellant. The appellant may have had to discharge customs duty provided under the 2012 Notification, but if there is a Notification which exempts payment of customs duty than there is no bar in the appellant availing the benefit of the said Notification", the tribunal said.

The case involved the import of gold dore bars from Tanzania, a country classified as a Least Developed Country under World Trade Organization norms. Gold dore bars are treated as restricted goods under India's Foreign Trade Policy and can be imported only against a valid licence issued by the DGFT.

The licence issued to Yash Oro permitted import of gold dore bars with purity up to 95 percent and stated that the import was “subject to” a 2012 customs notification that allows clearance at a concessional rate of duty.

Instead of paying that concessional duty, the company claimed full exemption under a 2008 notification that grants duty-free and quota-free access to goods originating from Least Developed Countries. Customs objected to this and later raised a demand nearly four years after the import.

Before the tribunal, the importer argued that the DGFT licence did not prohibit it from claiming other exemptions available under law and that Customs could not deny an exemption when the licence itself remained valid and unquestioned by the DGFT.

Customs maintained that since the licence referred to the 2012 notification, the importer was bound to clear the goods only under that notification and could not claim nil duty under the LDC exemption.

The tribunal rejected this interpretation, noting that the licence condition merely stated that the import was subject to the 2012 notification and did not exclude the operation of other exemptions. It added that the Principal Commissioner's finding that the licence conditions were fulfilled “if and only if” duty was paid under the 2012 notification was “not borne out from the Conditions of License.”

The tribunal went in to emphasise that Customs could not deny the exemption on the basis of an alleged licence violation when no action had been taken by the DGFT.

“It is not the case of the department nor is there any finding recorded by the Principal Commissioner that the appellant was not entitled to take the benefit of the 2008 Exemption Notification since the only reason assigned by the Principal Commissioner is that the benefit of the 2008 Exemption Notification could not have been taken by the appellant as the import was made subject to the 2012 Notification,” the tribunal observed.

The demand, penalty, and redemption fine were accordingly set aside.

Citation: 2026 LLBiz CESTAT (DEL) 11

Case Detail: Yash Oro India Private Limited vs. Principal Commissioner of Customs ACC (Import)

Case Number: Customs Appeal NO. 50911 OF 2025

For Appellant: Advocates Kishore Kunal, Runjhun Pare, Govind Gupta

For Respondent: Advocates Ranjan Prakash and Mr. Nikhil Mohan Goyal (Authorized Representatives)