Kerala High Court Sets Aside Customs Order Denying India-Sri Lanka FTA Benefit to Importer

The Kerala High Court has recently decided on a writ petition filed by a company named Tolins Tyres Limited against the Union of India, CBIC, and others. The petitioner company is engaged in import and export. The key dispute was regarding the denial of the benefits of the trade agreement between the Government of India and Sri Lanka. Basically, the company had imported a total of 126 agricultural pneumatic tyres from Colombo, Sri Lanka, through Kochi port in October 2025. On this, the company claimed that it was eligible for lower customs duty under the India-Sri Lanka Free Trade Agreement based on a valid Certificate of Origin issued by Sri Lankan authorities.

However, the customs officer rejected the petitioner’s claim for preferential duty benefits while assessing the bill of entry and did not clearly explain the reasons for the denial. The company further requested reassessment; however, the custom faceless assessment authority again rejected its request. In conclusion, the company filed an appeal before the Kerala High Court.

Before the court, the company raised the key argument that the disputed benefit was denied merely because the Certificate of Origin was issued retrospectively. The company cited a clarification issued by the CBIC, which says that retrospective issuance alone should not be a reason to deny trade agreement benefits.

When the court heard the arguments from both sides, it endorsed the arguments raised by the company. The court noted that the guidelines of CBIC clearly state that preferential duty cannot be refused only due to retrospective certificates. In conclusion to the aforesaid findings, the court set aside the earlier customs assessment orders and remanded the case to the competent customs authority with directions to reconsider the matter within one month, following the proper legal procedures under the Customs Act.