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Date: 04.06.2025
CESTAT Delhi- Customs Cannot Invoke Section 28AAA Without DGFT Cancellation
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Delhi, has set aside the confiscation and penalty orders issued against New Era Trading Pvt. Ltd., a ready-made garments exporter, under the Customs Act, 1962. The case revolved around alleged misuse of the Focus Market Scheme (FMS) benefits, with the Revenue Department invoking Section 28AAA, alleging diversion of goods and fraudulent claims.
Background of the Case
New Era Trading Pvt. Ltd. had exported garments under the Focus Market Scheme to various countries including Panama and the Netherlands, on FOB (Free on Board) terms. The freight forwarding was handled by Concorde Shipping & Logistics India, based on buyer instructions.
Later, it was discovered that the goods, allegedly destined for notified countries, had actually landed in Dubai, a non-notified destination under the scheme.
This led to the issuance of a Show Cause Notice (SCN) in January 2020, alleging:
- Misuse of FMS scrips worth โน4.14 crore
- Goods liable for confiscation under Section 113(d), (g), and (i)
- Proposal of penalties under Sections 114(iii), 114AA, and 114AB
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
Source: CESTAT Delhi
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