CESTAT: AIFTA Benefit Cannot Be Denied for Lack of Origin Marking on Scrap if Documents Are Verified

March 24, 2026 : The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled in favour of Jindal Aluminium Ltd., holding that exemption under the ASEAN–India Free Trade Agreement (AIFTA) cannot be denied merely because imported scrap goods do not bear country-of-origin markings, so long as documentary evidence establishing origin is valid and verified.

The decision came in Jindal Aluminium Ltd. v. Commissioner of Customs, Chennai (Customs Appeal No. 40161 of 2016), where the Tribunal set aside the order of the Commissioner (Appeals) denying the benefit of Notification No. 046/2011-Cus dated 01.06.2011.

Background

Jindal Aluminium Ltd. had imported “Aluminium Scrap Tread” from Singapore and claimed exemption from Basic Customs Duty under AIFTA based on a valid Certificate of Origin. However, during first check examination, customs authorities noted that the goods did not carry any markings indicating their country of origin. On this sole ground, the exemption was denied and duty was reassessed at the normal rate. The goods were cleared under protest, and the denial was upheld by the Commissioner (Appeals), prompting the appeal before CESTAT.

Appellant’s Case

The appellant argued that aluminium scrap is not a newly manufactured product and does not typically carry markings such as “Made in…” or manufacturer details. It was further contended that AIFTA Rules of Origin do not mandate physical marking on such goods, and the absence of markings cannot override valid documentary proof like the Certificate of Origin.

Revenue’s Stand

The Department maintained that without markings indicating origin, manufacturer, or brand, the goods could not be correlated with the Certificate of Origin. It argued that mere submission of the certificate was insufficient unless all identification requirements under the Rules of Origin were strictly met.

Tribunal’s Findings

The Tribunal noted that all relevant documents—including the pre-shipment inspection certificate, sales contract, Certificate of Origin, and weighment records—had been verified by customs authorities, with no discrepancies found. It also recorded that there was no evidence of tampering or any irregularity attributable to the importer.

On identification, the Bench observed that the goods were clearly described in both the bills of entry and the Certificate of Origin as “Aluminum Extrusion Scrap 6063 Tread,” which is a standard industry classification sufficient to establish identity. The absence of country-of-origin markings, therefore, did not impede identification.

Rejecting the Department’s position, the Tribunal held that procedural deficiencies cannot override substantive compliance. It emphasised the doctrine of substantial compliance, observing that procedural requirements are meant to facilitate enforcement, not defeat legitimate benefits.

Decision

Allowing the appeal, the Tribunal held that the goods satisfied the requirements for exemption under Notification No. 046/2011-Cus and directed grant of consequential relief to the appellant.