Noble Resources And Trading India Private Limited Vs Union of India & Ors. (Supreme Court of India)
Crude Soybean oil is Not Agricultural Produce but Manufactured Product, eligible for Customs Duty exemptions: Supreme Court: Supreme Court Overturns Duty Demand on Imported Soyabean Oil; Court Quashes Duty on Imported Soyabean Oil; Exporter Wins Challenge Against Classification as Agricultural Product; Supreme Court Upholds Exporter’s Rights under EXIM Policy: Relief for Noble Resources.
In a significant judgment dated 14th May 2025, the Hon’ble Supreme Court of India, in Civil Appeal No. 2572 of 2025, delivered a landmark decision in favour of Noble Resources and Trading India Pvt. Ltd. (formerly Andagro Services Pvt. Ltd.) against the Union of India and others. The case pertained to the interpretation of the Export-Import (EXIM) Policy 2002–2007 and the scope of duty exemption under notification No. 53/2003-Customs dated 1st April 2003.
The appellant, a two-star export house recognized by the government, had imported crude degummed soyabean oil by availing duty-free credit entitlement (DFCE) certificate under the EXIM Policy. The customs authorities, however, denied exemption, contending that soyabean oil was an agricultural product excluded under the relevant customs notification. They further argued that there was no direct nexus between the imported soyabean oil and the exported soyabean meal extract. Consequently, a show-cause notice was issued demanding more than ₹1 crore in customs duty. This demand was confirmed by the Assistant Commissioner and subsequently upheld by the Gujarat High Court.
The matter was escalated to the Supreme Court, where the appellant challenged the interpretation of the customs authorities. Justice Ujjal Bhuyan, delivering the verdict, clarified that a departmental circular cannot override a statutory notification issued under the EXIM Policy. The Court emphasized that crude degummed soyabean oil, after undergoing a manufacturing process, becomes a distinctly different and marketable product, thereby not falling within the category of agricultural or dairy products as claimed by the Revenue.
Furthermore, the Court accepted the appellant’s contention that the imported and exported products — crude degummed soyabean oil and soyabean meal extract, respectively — both fall under the same product group, namely ‘food products’. Therefore, the required nexus as per Para 3.7.2.1(vi) of the EXIM Policy was duly established. The Court also observed that the benefit extended through a statutory notification could not be diluted by subsequent internal circulars or administrative instructions.
Setting aside the High Court’s ruling and the original demand raised by the customs authorities, the Supreme Court restored the exemption benefit under the duty-free scheme. This decision has reaffirmed the rights of exporters and reinforced the principle that benefits under government policy cannot be arbitrarily withdrawn or restricted through departmental interpretations.
This ruling is a significant victory for the exporting community and offers clarity on the sanctity of benefits granted under EXIM policies. It also serves as a reminder that trade facilitation measures, once granted under law, must be honoured in both letter and spirit by tax authorities. Tax professionals and businesses should view this as a strong precedent in defending legitimate exemptions and policy benefits against administrative overreach.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
