Supreme Court Sets Aside ₹425.28 Crore Customs Penalty Over Fake Citations, AI Hallucinations

The Supreme Court has set aside a customs penalty of ₹425.28 crore against a diamond trader after finding that the adjudicating authority had relied on non-existent judgments and fake citations.It also found that legal propositions had been wrongly attributed to existing judgments, which the Court said appeared to be a “hallucination of AI”.A Division Bench of Justices Dipankar Datta and Sheel Nagu set aside the Gujarat High Court's January 20, 2026, order that had dismissed Vijay Ghanshyam...

Supreme Court Holds Port Trust Liable For Customs Duty On Pilfered Goods After Custodian Approval

The Supreme Court on 25 August upheld the validity of a notification approving the Mumbai Port Trust as a custodian under Section 45(1) of the Customs Act, 1962, empowers the Commissioner of Customs to approve a person or entity as custodian of imported goods pending their clearance.A Bench of Justices B.V. Nagarathna and Manmohan held that the Commissioner of Customs was justified in approving the Trust as a custodian, and set aside the Bombay High Court's finding that the Commissioner...

Laser Imagers Are Accessories, Not Diagnostic Apparatuses For Customs Duty Purposes: Supreme Court

The Supreme Court has recently ruled that a laser imager used to print images generated by MRI, CT, X-ray and other diagnostic machines cannot itself be treated as a “diagnostic apparatus” for determining customs duty.“Admittedly, the laser imager has no diagnostic skill or capability of its own and must necessarily receive inputs from diagnostic equipment to carry out its function of printing films. In effect, it is an 'accessory' to the diagnostic equipment from which it receives inputs, as it...

Indian Authorities Cannot Assail Authenticated Thailand Certificate Of Origin: Bombay High Court

The Bombay High Court has dismissed the Customs Department's appeal against a jewellery importer, holding that once the designated authority in Thailand has authenticated a Certificate of Origin (CoO), Indian Customs authorities cannot reopen its authenticity or deny the benefit of concessional duty under the Indo–Thailand Free Trade Agreement (FTA). The court also held that statements recorded under Section 108 of the Customs Act, 1962, cannot override an authenticated Certificate of Origin.A...

Supreme Court Issues Notice In DMRC Plea Against ₹45 Crore Service Tax Demand On Upfront Lease Premium

The Supreme Court on Tuesday issued notice on an appeal filed by Delhi Metro Rail Corporation Ltd (DMRC) challenging a CESTAT ruling that upheld a service tax demand of over ₹45 crore. The demand relates to upfront fees received under long-term lease arrangements for property development linked to the Delhi Metro project.A Bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe issued notice and agreed to hear the case on merits."Issue notice on the Civil Appeal as well as on the...

Reliance Industries' n-Hexane Import Cannot Be Classified As Motor Spirit Merely For Low Flash Point: Supreme Court

The Supreme Court has ruled in favour of Reliance Industries Ltd. in its long-running customs classification dispute, holding that imported n-Hexane cannot be treated as motor spirit merely because its flash point is below 25°C. The court held that the Customs Department failed to prove that the product satisfied all conditions required for such classification, including suitability for use as fuel in spark ignition engines. A bench of Justice Aravind Kumar and Justice Prasanna B. Varale...

Supreme Court Refuses To Interfere With Relief To RSRTC In ₹16 Crore Service Tax Dispute

The Supreme Court has refused to interfere with a tribunal ruling that granted major relief to Rajasthan State Road Transport Corporation (RSRTC) in a long-running service tax dispute involving demands exceeding ₹16 crore over allegations that it operated as a “tour operator” and failed to pay tax on certain other services. A bench of Justice Dipankar Datta and Justice Satish Chandra Sharma dismissed an appeal filed by the Principal Commissioner of CGST and Central Excise, Jaipur, against a...

Supreme Court Seeks Union's Stand On Customs' Power To Question AIFTA Benefit Claims Despite Valid Origin Certificates

The Supreme Court on Monday sought the Union Government's stand in a dispute where importers have challenged customs authorities' jurisdiction to question preferential duty claims under the ASEAN-India Free Trade Agreement (AIFTA) despite valid Certificates of Origin issued by the exporting country. The Court also directed that no final adjudication order be passed in the matter for now. A Bench of Justices K.V. Viswanathan and Manmohan was hearing special leave petitions filed by importers,...

Supreme Court Requests Early Delhi HC Hearing In Pernod Ricard's ₹3,000 Crore Customs Duty Dispute

The Supreme Court on Monday asked the Delhi High Court to hear, within weeks, Pernod Ricard India Pvt Ltd's challenge to a September 2025 customs adjudication order in a valuation dispute in which it allegedly faces duty liability of around Rs 3,000 crore. A bench of Justices Sanjay Karol and Nongmeikapam Kotiswar Singh noted that Pernod Ricard's writ petition before the Delhi High Court was listed for July 28, 2026. It directed the parties to appear before the High Court on May 15; requested...

Supreme Court Dismisses Customs Challenge Against ITC Ltd Over Quicklime Classification

The Supreme Court on Friday dismissed the Customs Department's challenge against ITC Ltd, upholding a ruling that treated imported “quicklime” as an industrial form of lime rather than a chemically pure compound. The classification turned on whether the product, containing about 92% calcium oxide, could be considered a high-purity chemical.A bench of Justices Manoj Misra and Manmohan found no grounds to interfere with the CESTAT Kolkata Bench order dated June 20, 2025, which had held in favour...

Supreme Court Sets Aside HC Direction Making Customs Dept. Liable For Demurrage In Austin Engineering Dispute

The Supreme Court has recently set aside a Madras High Court ruling that had required the Customs Department to bear demurrage charges in a dispute with Austin Engineering Co. Ltd. These charges are levied by port authorities when imported goods remain in storage beyond the permitted period.The court made it clear that such liability cannot be placed on customs unless there is clear evidence of mala fides or a gross abuse of power. A bench of Justice Aravind Kumar and Justice Prasanna B. Varale...

Supreme Court Stays ₹14.91 Crore Customs Duty Recovery Against HP India, Issues Notice

The Supreme Court has stayed recovery pursuant to a Rs.14.91 crore customs demand against HP India Sales Pvt. Ltd. and issued notice in its appeal against a November 4, 2025 order of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT).HP India's appeal challenges the CESTAT Mumbai order, which upheld the classification of its imported “HP Latex printers” as inkjet printing machines instead of inkjet printers, leading to the duty demand along with interest and penalty under the...