ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 27.06.2025
CESTAT Ahmedabad Set Aside Customs Duty Demand and Penalties on Re-Import of DG Sets
The Customs Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad, has delivered a significant ruling in favour of Sterling Generators Pvt. Ltd., a 100% Export Oriented Unit (EOU), by setting aside a customs duty demand of over βΉ1 crore along with associated penalties. The decision, dated 26.06.2025, not only quashes the demand but also reinforces important principles around re-importation, procedural compliance, and limitation in customs law.
Background of the Case
Sterling Generators Pvt. Ltd., based in Silvassa, operates as a 100% EOU engaged in manufacturing diesel generator (DG) sets under Chapter 85 of the Central Excise Tariff Act, 1985. The company was granted bonded warehouse status under Section 58 and permission to manufacture in bond under Section 65 of the Customs Act, 1962.
The case arose after CERA auditors objected to the import/re-import of DG sets from SEZ and from another 100% EOU (M/s. Powerica Ltd.), claiming that the company had imported fully built DG sets and sold them without authorized manufacturing activity, in contravention of the EOU norms.
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 Ahmedabad
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