CESTAT Delhi: Gold Dore Bar Importer Entitled to NIL Duty Under LDC Exemption Notification Even When DGFT Licence References Concessional Duty Notification

Background and Context

The Customs, Excise and Service Tax Appellate Tribunal, Delhi, pronounced its order on 07.01.2026 in Yash Oro India Private Limited Vs Principal Commissioner of Customs ACC (Import) (Customs Appeal No. 50911 of 2025), setting aside a customs duty demand, associated interest, penalty, and redemption fine that had been levied on an importer of gold dore bars originating from Tanzania.

The core question before the Tribunal was deceptively straightforward yet of considerable practical significance: could an assessee lawfully claim complete customs duty exemption under Notification No. 96/2008-Cus dated 13.08.2008 — the Duty Free Tariff Preference scheme notification applicable to imports from Least Developed Countries — when the DGFT Import Licence granted to it expressly stated that the import was subject to Notification No. 12/2012-Cus dated 17.03.2012 (subsequently superseded by Notification No. 50/2017-Cus)? The Principal Commissioner of Customs had answered this question against the assessee. CESTAT Delhi reversed that finding entirely.

The International Policy Foundation: DFTP for Least Developed Countries

To appreciate the legal landscape, it is necessary to understand the genesis of the 2008 Exemption Notification. At the Doha Ministerial Conference of the World Trade Organisation in 2001, member nations — India among them — committed to examining the feasibility of duty-free, quota-free market access for products originating in Least Developed Countries. This commitment was further consolidated at the Hong Kong Ministerial Declaration of 2005, where WTO member countries collectively agreed to deliver lasting, comprehensive duty-free and quota-free access for all LDC-origin goods.

Acting on these international undertakings, the Government of India introduced the Duty Free Tariff Preference Scheme in 2008. Notification No. 96/2008-Cus dated 13.08.2008 was issued in exercise of powers under Section 25(1) of the Customs Act, 1962, granting full exemption from customs duty leviable under the First Schedule to the Customs Tariff Act, 1975 — as well as from the Agriculture Infrastructure and Development Cess leviable under Section 124 of the Finance Act, 2021 — on eligible goods imported from countries listed in the Schedule to that notification. Tanzania is one such listed country.

The Parallel Regime: Concessional Duty Notifications for Gold Dore Bars

Separately, Notification No. 12/2012-Cus dated 17.03.2012 extended concessional rates of basic customs duty and additional duty to specified goods. Gold dore bars with gold content not exceeding 95% appeared at Serial No. 318 of that notification, subject to Condition Nos. 5 and 34. Condition No. 34 prescribed detailed requirements:

(a) the goods must be directly shipped from their country of origin and each bar must weigh 5 kg. or above; (b) the goods must be imported in accordance with the packing list issued by the producing mining company; (c) the importer must produce an assay certificate issued by the mining company or its attached laboratory, detailing the precious metal content; (d) gold dore bars must be imported by the actual user for refining and manufacture of standard gold bars of purity 99.5% and above; and (e) silver dore bars must be imported by the actual user for refining and manufacture of silver bars of purity 99.9% and above.

Notification No. 50/2017-Cus dated 30.06.2017 subsequently superseded the 2012 Notification. It extended concessional basic customs duty to gold dore bars at Serial No. 354, subject to Condition Nos. 9 and 40, which were substantively identical to Condition Nos. 5 and 34 of the earlier notification.

The DGFT Import Licence and the Assessee's Bill of Entry

On 22.12.2020, the DGFT issued an Import Licence to Yash Oro India Private Limited, authorising it to import gold dore bars with purity up to 95%. The licence carried two relevant conditions:

  1. The licence was issued with actual user conditions, in addition to other standard conditions of Import Authorization.
  2. "The import is subject to Custom Notification no. 12/2012 dated 17.03.2012 and RBI notifications issued from time to time."

When the assessee filed its Bill of Entry for the import of gold dore bars from Tanzania, it claimed NIL duty exemption under the 2008 Exemption Notification, also furnishing a country of origin certificate. Customs authorities conducted an investigation and took the position that the assessee had incorrectly invoked the 2008 Exemption Notification, since the licence condition expressly referenced the 2012 Notification, which by that time had been superseded by the 2017 Notification.

Show Cause Notice and the Principal Commissioner's Order

A show cause notice dated 24.04.2024 was issued under Section 28(1) of the Customs Act, 1962, alleging: