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Date: 09.10.2025
CESTAT Mumbai Sets Aside Confiscation and Duty Recovery in Naphthalene Import Dispute
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
In a significant ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Mumbai, has delivered a judgment that underscores the importance of adhering to legal principles in customs enforcement. The case involved appeals filed by M/s LRC Speciality Chemicals Pvt Ltd, M/s Silicon Carbide Grinding Mills Pvt Ltd, and Appellant, challenging the confiscation of imported naphthalene and the subsequent recovery of duties foregone. β The tribunal’s decision, pronounced on October 1, 2025, has set a precedent for similar cases in the future.
Background of the Case
The appellants had imported naphthalene under the Duty Exemption Entitlement Certificate (DEEC) scheme of the Foreign Trade Policy (FTP) for manufacturing and exporting specific products. β However, customs authorities alleged that portions of the imported goods were diverted for domestic use and transferred between the appellants, violating the conditions of the exemption notification issued under Section 25 of the Customs Act, 1962. β This led to the confiscation of the goods under Section 111(o) of the Customs Act, 1962, and the imposition of fines and recovery of duties under Section 125 of the Act. β
Source: CESTAT Mumbai
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