The Customs, Excise and Service Tax Appellate Tribunal at Ahmedabad allowed an importer of marine distillate oil to obtain discharge of its bank guarantee on producing an end-use certificate and executing a bond.

A bank guarantee demanded as a condition for provisional release of seized distillate marine oil is liable to be discharged once the importer produces an end-use certificate and executes a bond, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad has held [Rumi Petro Chem (I) Private Limited v. Commissioner of Customs-Kandla, 2026-juristway.com-3440-CESTAT(Ahmedabad)-Customs].

Somesh Arora, Member (Judicial), sitting alone, allowed the importer’s appeal.

The importer filed two bills of entry on 9 Sep 2025 for “Distillate Marine Oil (only for industrial use)” from Oman, classified under tariff item 2710 19 61, whose import is free. A test report of 26 Sep 2025 said the sample most closely resembled High Flash High Speed Diesel (HFHSD), which falls under tariff item 2710 19 49 and can be imported only through Indian Oil Corporation under the Foreign Trade Policy, but had a flash point below the HFHSD standard and failed the cloud point test for marine fuel. The cargo was seized on 29 Sep 2025 under Section 110 of the Customs Act, 1962.

A provisional release order of 9 Nov 2025 required an end-use bond and undertaking that the goods would not be used as automotive diesel, HFHSD or propulsion fuel, a bond for the full assessable value and other conditions, including a bank guarantee.

The Tribunal followed its own ruling in Quantum Petro Chem India v. Commissioner of Customs, Kandla on a similar product. That ruling had relied on Gujarat High Court decisions in Aparajita Energy Private Limited v. UOI and Noya Infrastructure LLP v. UOI, where the Court accepted a clarification by the Central Revenues Control Laboratory that “diesel fraction” is a broad category and that cloud point cannot be the sole basis for seizure, and ordered release subject to an end-use certificate. It had also relied on the Tribunal’s order in Prajakt Agro Industries Pvt. Ltd. (Final Order No. 10024/2024).

The appeal was allowed. Discharge of the bank guarantee is to be considered on production of an end-use certificate and execution of a bond.

2026-juristway.com-3440-CESTAT(Ahmedabad)-Customs