SC Upholds Tribunal Order Favouring RIL In Naphtha Duty Case

The Supreme Court on Wednesday upheld a tribunal order rejecting a customs duty demand and penalty against Reliance Industries Ltd. for importing Naphtha (A-180 grade) from Saudi Aramco Products Trading Co.

Reliance had classified the imports under “other light oils and preparations” and “Naphtha” in its bills of entry, claiming exemption from customs duty under a 2015 notification. However, in 2020, the Directorate of Revenue Intelligence issued a show cause notice, alleging the imports did not qualify as Naphtha and should be classified as “natural gasoline liquid”.

The Customs, Excise & Service Tax Appellate Tribunal ruled that the department failed to prove its classification and upheld Reliance’s declaration.

The Commissioner of Customs, Ahmedabad had challenged the tribunal’s decision in the Supreme Court, but the bench of Justices J.B. Pardiwala and R. Mahadevan dismissed the appeal.