Vedanta Ltd. Vs Commissioner of Customs (CESTAT Chennai)
CESTAT Chennai Reiterates: Once DGFT Issues EODC, Customs Cannot Deny Advance Authorization Benefits
Vedanta Ltd. vs. Commissioner of Customs, Tuticorin [2026-VIL-158-CESTAT-CHE-CU]
The Chennai Bench of the CESTAT has delivered a significant ruling wherein it was held that Customs authorities cannot question or deny duty exemption benefits once DGFT has regularised export shortfalls and issued Export Obligation Discharge Certificates (EODCs). The said ruling has reinforced the supremacy of DGFT decisions in matters relating to Advance Authorization export obligations.
A. Background
- Vedanta Ltd. has imported materials under three Advance Authorization licenses issued under Notification Nos. 96/2009-Cus and 99/2009-Cus.
- Though the company fulfilled export obligations (EO) against the said licenses in terms of quantity, there was a shortfall in value.
- Vedanta regularized the shortfalls by paying 1% of FOB value shortfall as per para 4.28 of FTP 2009–14 / para 4.49 of FTP 2015–20
- The DGFT accepted the regularization and issued EODCs for all three authorizations in 2017, leading to cancellation of bonds by Customs.
- However, DRI later issued a show-cause notice alleging violation of authorization conditions, i.e., non-fulfilment of export obligation and the Commissioner has confirmed duty, interest and penalty on such alleged non-compliance.
B. CESTAT’s Key Findings
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