The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside multiple customs duty demands raised against importers of crude rapeseed oil, holding that benefits under the South Asian Free Trade Area (SAFTA) Agreement cannot be denied merely on presumptions regarding the origin and nature of the imported goods.

The bench of R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) has observed that at the time of import, the goods were cleared after due verification, including testing by the Central Revenue Control Laboratory (CRCL), which confirmed the nature of the goods. In one instance, the Erucic Acid content was recorded at 2.8%, which fell outside the LEAR category, contradicting the department’s later allegations.

The dispute arose from imports of crude rapeseed/mustard oil from Bangladesh between December 2019 and February 2020. The importers had claimed customs duty exemption under SAFTA by furnishing valid Certificates of Origin issued by Bangladeshi authorities. 

Subsequently, the Directorate of Revenue Intelligence (DRI) initiated an investigation and alleged that the imported oil was actually Low Erucic Acid Rapeseed (LEAR) oil—commonly known as canola oil—which, according to the department, could not have originated from Bangladesh. On this basis, the department contended that the Certificates of Origin were incorrect and proceeded to deny the exemption, raising duty demands along with interest and penalties. 

A key issue before the Tribunal was whether the Revenue could rely on selective re-testing of a few samples and apply those results across all consignments. The Tribunal found merit in the importers’ argument that such an approach was flawed and legally untenable, especially when original test reports were available for all consignments at the time of clearance. 

Further, the Tribunal emphasized the evidentiary value of Certificates of Origin issued under SAFTA. It observed that the Bangladeshi authorities had verified and confirmed the authenticity of the certificates, and in the absence of contrary evidence, Indian authorities could not reject them based on assumptions about production capabilities. 

On the procedural front, the Tribunal also examined the legality of invoking extended limitation under Section 28(4) of the Customs Act. It noted that all relevant documents, including test reports and Certificates of Origin, were available with the department at the time of import, and there was no evidence of suppression or misdeclaration by the importers. This significantly weakened the Revenue’s case for invoking the extended period. 

Another important aspect considered was the finality of self-assessed Bills of Entry. The Tribunal observed that once goods are assessed and cleared after due verification, any change in classification would require proper re-assessment under the law, which must be explicitly proposed in the show cause notice. In the present case, the adjudicating authority had gone beyond the scope of the notice, rendering the demand unsustainable. 

The Tribunal also took note of the legal principle that demands cannot be sustained on reclassification without following due process, including reassessment and proper jurisdiction. It relied on settled jurisprudence, including the Supreme Court’s ruling in Canon India, to underline that statutory provisions must be strictly adhered to. 

The Tribunal set aside the impugned Orders-in-Original and allowed the appeals, granting consequential relief to the importers.

Case Details

Case Title:  M/s. Aone Agro Products Private Limited Versus Commissioner of Customs (Preventive)

Citation: JURISHOUR-1030-CES-2026(KOL) 

Case No.: Customs Appeal No. 75377 of 2024

Date: 27/04/2026

Counsel For  Petitioner: Arijit Chakrabarti, Advocate

Counsel For Respondent: Faiz Ahmed, Authorized Representative

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