CEAT LTD vs COMMISSIONER OF CUSTOMS-MUMBAI EXPORT I

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI

REGIONAL BENCH - COURT NO. 5

Customs Appeal No. 87482 of 2025

[Arising out of Order-in-Original C.A.O. No. 16/2025-26/CAC/CC(E)/AH/ADJN-EXP dated
22.05.2025 passed by the Commissioner of Customs (Export), Mumbai Zone-I, Mumbai.]

CEAT Limited …. Appellants
463, Annie Besant Road
Worli, Mumbai,
Maharashtra – 400 025.

Versus

Commissioner of Customs (Export) .… Respondent
II Floor, New Custom House
Shoorji Vallabhdas Road, Ballard Estate,
Mumbai, Maharashtra – 400 001.

Appearance:
Ms. Madhura Khandekar, Advocate for the Appellants

Shri Krishna Azad, Authorized Representative for the Respondent


CORAM:

HON’BLE MR. AJAY SHARMA, MEMBER (JUDICIAL)

HON’BLE MR. M.M. PARTHIBAN, MEMBER (TECHNICAL)

FINAL ORDER NO. A/86074/2026

Date of Hearing: 03.08.2026
Date of Decision: 02.09.2026
Per: M.M. PARTHIBAN

This appeal has been filed by M/s. CEAT Limited, Mumbai (herein after,
referred to as “the appellants”, for short) assailing the Order-in-Original
C.A.O. No. 16/2025-26/CAC/CC(E)/AH/ADJN-EXP dated 22.05.2025
(herein after, referred to as “the impugned order”) passed by the
Commissioner of Customs (Export), Mumbai Zone-I, Mumbai.

2.1 Brief facts of the case, leading to this appeal, are summarized herein
below:

2.2 The appellants herein are engaged inter alia , in the manufacturer of
various types of automobile tyres at their different manufacturing plants in
India. The appellants were issued with multiple Export Promotion Capital
Goods (EPCG) Scheme Licenses/Authorisation for import of capital goods.
The objective of the EPCG Scheme is to facilitate import of capital goods
for producing quality goods and services and enhance India’s

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manufacturing competitiveness. EPCG Scheme allows import of capital
goods (except those specified in negative list in Appendix 5 F) for pre-
production, production and post-production at zero customs duty. Capital
goods imported under EPCG Authorisation for physical exports are also
exempt from IGST and Compensation Cess, leviable thereon under the sub-
section (7) and sub-section (9) respectively, of Section 3 of the Customs
Tariff Act, 1975, as provided in the notification No. 22/2013-Customs dated
18.04.2023 issued by Department of Revenue, Ministry of Finance. Under
Zero duty EPCG scheme, the appellants were issued with six Authorisation/
Licenses viz., No. 0330036078/2/12/00 dated 13.06.2013; No.
0330036175/2/12/00 dated 21.06.2013; No. 0330036289/2/12/00 dated
04.07.2013; No. 0330036530/2/12/00 dated 06.08.2013; No.
0330036733/2/12/00 dated 05.09.2013 and No. 0330037284/2/12/00
dated 21.11.2013 for import of capital goods against export of tyres
specified therein. The appellants had imported capital goods totally valued
at Rs.7,76,83,519/- for which import duty foregone was Rs.1,79,12,579/-
, by executing bond for an amount of Rs.5,01,55,222/- undertaking to fulfill
export obligation in terms of Section 143 of the Customs Act, 1962.

2.3 Since the department had found that the appellants have failed to
produce Capital Goods Installation Certificate upon its importation and have
also not submitted the Export Obligation Discharge Certificate (EODC) in
terms of the notification dated 18.04.2013, a Show Cause Notice (SCN)
dated 07.10.2024 was issued for demand of duty foregone amount of
Rs.1,79,12,579/- along with interest in terms of bond executed under
Section 143 ibid , with a proposal for confiscation of imported goods under
Section 111(o) ibid and for imposition of penalty on the appellants under
Section 112(a) ibid .

2.4 The said SCN dated 07.10.2024 was adjudicated by the learned
Commissioner of Customs, in confirmation of all the proposals made in the
SCN by issue of the impugned order dated 22.05.2025. Being aggrieved by
the impugned order, the appellants had preferred this appeal before the
Tribunal.

3. Learned Counsel for the appellants submitted that during the
adjudication of the case, the appellants had stated before the learned
Commissioner vide their letter dated 13.05.2025, that they had already
fulfilled the requisite export obligation as per EPCG Authorisation and they
had also filed necessary application before the DGFT authorities at Mumbai

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for issue of EO redemption certificate by their letter dated 13.01.2020 and
EODC is awaited from DGFT. Upon receipt of the same, they would be
submitting it to the jurisdictional customs authorities for cancellation of
bond and sought for more time for undertaking such process. He further
stated that in the impugned order, the learned Commissioner has held that
installation certificate issued by the designated authority is not submitted
by the appellants and they have failed to show that export obligation has
been fulfilled by them, and on such basis, he had confirmed the adjudged
demands. As opposed to this, learned counsel submitted that the appellants
had duly obtained installation certificate in respect of imported capital
goods from the jurisdictional Central Excise authorities viz., Range-V, Halal
Division of Vadodara-II Central Excise & Customs Commissionerate vide
letters dated 17.12.2013, 27.01.2014 (3 letters), 10.10.2014 (2 letters)
covering all imported goods under various Bills of Entries. Further, he
stated that the appellants had also took persistent efforts and were able to
obtain EODC from Additional DGFT, Mumbai on 16.12.2025 in respect of all
the six EPCG Authorisation/licenses. Furthermore, on production of these
documents, the Deputy Commissioner of Customs, in the office of the
Commissioner of Customs (Exports), New Custom House vide letter dated
09.04.2026 had taken into account the EODC certificate of DGFT authorities
and on the ground that the appellants had discharged the export obligation
arising from the said EPCG Authorisation/Licenses have also cancelled the
Bonds executed before the Customs. On the above factual matrix and on
the basis of the order of the Tribunal in the case of Alca Technologies Vs.
Commissioner of Customs, Nhava Sheva-IV – 2019 (369) E.L.T. 1447 (Tri.-
Mumbai), learned Counsel prayed that the impugned order is not
sustainable and the appeal filed by them may be allowed.

4. Learned Authorised Representative appearing for Revenue, reiterated
the findings made in the impugned order and submitted that adjudged
demands are sustainable as the appellants had failed to produce documents
at relevant time.

5. We have heard both learned Counsel appearing for the appellants
and learned Authorized Representative of the Department and perused the
case records and the synopsis given in the form of written submissions.

6. The issue for consideration before the Tribunal lies in the narrow
compass of examining whether there exist any Export Obligation Discharge
Certificate (EODC) in respect of six specified Advance Authorisation/

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Licenses issued to the appellants and installation certificates in fulfillment
of the conditions of notification dated 18.04.2013; and whether the
adjudged demands in the impugned order are sustainable or not.

7. On examining the documents placed in the appeal records, more
particularly letter dated 09.04.2026 issued by the Deputy Commissioner of
Customs in the office of the Commissioner of Customs (Exports), New
Custom House, duly cancelling bonds executed for availing duty exemption
under EPCG Scheme in respect of all the six EPCG licenses on 09.04.2026
covered in the impugned order; and installation certificates in respect of
imported capital goods from the jurisdictional Central Excise authorities
viz., Range-V, Halal Division of Vadodara-II Central Excise & Customs
Commissionerate vide letters dated 17.12.2013, 27.01.2014 (3 letters),
10.10.2014 (2 letters), we are of the considered opinion that the requisite
compliance with the notification conditions have been fulfilled by the
appellants. We further notice that the appellants had submitted the
requisite details for obtaining EODC with DGFT authorities vide their letter
dated 13.01.2020. However, the same was issued by the Additional DGFT,
Mumbai only on 23.03.2026. Therefore, non-production of EODC at the
time of adjudication before the learned Commissioner of Customs was
beyond their control, as the same was not issued by the competent
authorities, despite the action on the part of the appellants for export of
specified goods having been completed for fulfillment of export obligation
and necessary documents have also been submitted to DGFT.

8.1 In this regard, we find that the Co-ordinate Bench of the Tribunal in
the case of Alca Technologies (supra), involving similar set of facts have
held that the proper course of action for the department was to keep the
SCN pending till the licensing authority had responded one way or the
other, instead of deciding the issue of fulfillment of conditions of notification
without having such facts ascertained. Therefore, the Tribunal had set aside
the impugned order in that case. The extract of the relevant paragraph is
given below:
“4. We find that the application to the licensing authority was made
almost nine months after the prescribed period for discharge application
had expired. Considering the voluminous records that were to be
submitted, we find no anomaly in this lapse of time. At the stage of issue
of show cause notice, as well as of impugned order, the customs authorities
were not unaware that the application for ‘export obligation discharge
certificate’ was yet pending with the licensing authority. Had the licensing
authority been dissatisfied on this score, a show cause notice under Foreign
Trade (Development and Regulation) Act, 1992 would have been on record.

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In such circumstances, it was not necessary for the adjudicating authority
to proceed with such haste to dispose of the show cause notice. That this
was premature is apparent from the issue of discharge certificate from the
licensing authority barely six months after that. The proper course of action
for the original authority would have been to keep the notice pending till
the licensing authority had responded one way or the other. Be that as it
may, in view of the furnishing of the ‘export obligation discharge certificate’
issued by the competent authority, it would be appropriate for the
impugned order to be set aside and the matter remanded back to the
original authority for a decision on the liability to duty in the light of
evidence of having fulfilled the prescription in the notification. Needless to
say, the appellant should be granted an opportunity to be heard in person.
Appeal is accordingly disposed of.”

8.2 In the case before us, the customs authorities themselves upon
subjective satisfaction of the EODC certificate issued by DGFT, of course
subsequent to the passing of impugned order, had cancelled the bonds in
respect of all six EPCG licenses/Authorisation, against which the impugned
order had confirmed the demand of duty under Section 143 ibid. From the
documents on record, it transpires that there is apparent contradiction
inasmuch as, on the one hand the customs authorities of the same
Commissionerate have confirmed the duty demands for non-production of
EODC; and on the other hand, they have also accepted the EODC and
cancelled the bonds executed before them. Thus, we do not find any merits
in confirmation of adjudged demands in the impugned order, on the
premise of non-submission of requisite documents by the appellants.

9. In view of the foregoing discussions and analysis, we are of the
considered view that the impugned order to the extent it had confirmed the
duty demands along with imposition of redemption fine and penalty on the
appellants is not legally sustainable.

10. In the result, the impugned order is set aside and the appeal is
allowed in favour of the appellants.


(Order pronounced in open court on 02.09.2026)

(AJAY SHARMA)
MEMBER (JUDICIAL)



(M.M. PARTHIBAN)
MEMBER (TECHNICAL)

Sinha