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Author: Aadrikaa Law Office (ALO)

  • CESTAT Kolkata Sets Aside Penalties in Bonded Gold Import

    CESTAT Kolkata Sets Aside Penalties in Bonded Gold Import

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 17.06.2025

    CESTAT Kolkata Sets Aside Penalties in Bonded Gold Import

    The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata has exonerated Indo Friends Agency, Sequel Logistics Pvt. Ltd., and others from customs penalties relating to the alleged diversion of bonded gold imported under the 80:20 Scheme.

    The case, involving complex movements of duty-free gold under RBI’s controlled import-export mechanism, saw penalties totaling over β‚Ή1.65 crore imposed on various logistics and customs service providers. However, the Tribunal found no evidence of abetment, knowledge, or procedural failure on their part.

    Case Summary

    • The gold was imported under RBI’s 80:20 Scheme and stored in Customs Bonded Warehouses (CBWs).
    • Upon investigation, Customs alleged diversion of 4 kg gold meant for export.
    • Indo Friends Agency was the customs broker, and Sequel Logistics was responsible for secure transportation and vault storage.
    • Despite having no control over the gold post-delivery, these intermediaries were penalized under Section 112 of the Customs Act for alleged abetment.

    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 Kolkata

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  • CESTAT Ahmedabad- No Penalty for Theoretical Weight Variation

    CESTAT Ahmedabad- No Penalty for Theoretical Weight Variation

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 17.06.2025

    CESTAT Ahmedabad- No Penalty for Theoretical Weight Variation

    The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Ahmedabad has set aside penalties and redemption fine imposed on Kalpataru Transmission Ltd, citing lack of mala fide intent in a case involving theoretical weight discrepancies during import.

    Case Background:

    Kalpataru Transmission Ltd imported Hot Rolled Steel Plates via Mundra port under Bill of Entry No. 6289437 dated 31.07.2014. While the declared weight in the bill was 51,716 kg, the customs examination revealed an actual weight of 53,820 kgβ€”an excess of 2,104 kg (approx. 4.1%).

    This discrepancy led customs to allege misdeclaration of quantity to evade duty and subsequently:

    • Confiscated the excess quantity under Section 111(m) of the Customs Act, 1962
    • Imposed a redemption fine of β‚Ή30,000 under Section 125, and
    • Levied a penalty of β‚Ή15,000 under Section 112(a)

    The appeal before the Commissioner (Appeals) was dismissed, prompting Kalpataru to approach CESTAT.

    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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  • CESTAT Mumbai Upholds ASEAN FTA Claim in Cashew Import Dispute

    CESTAT Mumbai Upholds ASEAN FTA Claim in Cashew Import Dispute

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 17.06.2025

    CESTAT Mumbai Upholds ASEAN FTA Claim in Cashew Import Dispute

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai has ruled in favor of M/s AAA Trading Company, setting aside the denial of exemption benefits under the India–ASEAN FTA for import of roasted cashew kernels from Vietnam.

    Case Background:

    M/s AAA Trading imported roasted cashew kernels and claimed exemption under:

    • Notification No. 46/2011-Cus. dated 01.06.2011, and
    • Notification No. 63/2016-Cus. dated 31.12.2016,

    …issued in line with India’s commitments under the ASEAN FTA.

    However, Customs authorities at Nhava Sheva disputed the classification of goods and alleged that the cashew kernels were not roasted but plain/raw. Relying on a DRI investigation and test reports from CEPCI Lab, Customs imposed:

    • Demand of differential duty: β‚Ή22,47,676/-
    • Confiscation of goods (live consignment)
    • Penalties under the Customs Act

    The order was upheld partially by the Commissioner (Appeals), leading AAA Trading to approach CESTAT.

    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 Mumbai

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  • CESTAT Bangalore sets aside the Confiscation of Donated Medical Equipment

    CESTAT Bangalore sets aside the Confiscation of Donated Medical Equipment

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 16.06.2025

    CESTAT Bangalore sets aside the Confiscation of Donated Medical Equipment

    The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore, has set aside the confiscation and penalties imposed on G.V. Foundation, a charitable trust, for importing used medical equipment donated from the USA during the COVID-19 pandemic.

    Background: Humanitarian Import Challenged

    G.V. Foundation, a Bangalore-based charitable trust, imported a consignment of used but fully functional medical equipment donated by SOS International Inc., USA. The shipment was clearly labeled as β€œdonated relief cargo with no commercial value”.

    Despite:

    • The existence of a non-commercial invoice,
    • A Sea Waybill stating “No License Required”, and
    • Chartered Engineer certification confirming that the items had more than 80% residual life and were not hazardous or E-Waste,

    Customs authorities classified parts of the consignment as prohibited and hazardous, invoking provisions under Section 111(d) and Section 112(a) of the Customs Act, 1962, leading to:

    • A penalty of β‚Ή2 lakhs on the trust.
    • Confiscation of certain items,
    • Redemption fines, and

    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 Bangalore

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  • CESTAT Chennai Rejects Customs Duty Demand on Finished Leather

    CESTAT Chennai Rejects Customs Duty Demand on Finished Leather

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 16.06.2025

    CESTAT Chennai Rejects Customs Duty Demand on Finished Leather

    The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, has allowed a group of appeals filed by leather exporters including Sri Karpaga Leathers, Meenal Leather Exports, Blossom Leathers, and others, setting aside the entire demand of export duty, penalty, and confiscation orders issued by the Commissioner of Customs, Chennai-IV.

    Case Background: Misdeclaration of Leather Type Alleged

    The case pertained to exports of finished leather by multiple Chennai-based exporters. Customs authorities alleged that these exporters had:

    • Misdeclared semi-finished leather as finished leather, and
    • Manipulated test samples to obtain a favorable certificate from CLRI (Central Leather Research Institute).

    The Revenue’s primary contention was that:

    • Exporters evaded 60% ad valorem export duty on unfinished leather.
    • Wrongful duty drawback and incentives were claimed.
    • Test reports were manipulated by switching samples.

    Based on this, the Department issued Show Cause Notices and passed Orders-in-Original invoking Sections 113(i), 114(ii), 114AA, 125, and 28(4) of the Customs Act, 1962.

    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 Chennai

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  • CESTAT Mumbai- Extended Period of Limitation Not Sustainable

    CESTAT Mumbai- Extended Period of Limitation Not Sustainable

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 16.06.2025

    CESTAT Mumbai- Extended Period of Limitation Not Sustainable

    The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai has ruled in favour of Reliance Jio Infocomm Ltd., setting aside customs duty demands and penalties on imports of telecom base station equipment. The case revolved around classification and exemption eligibility of certain passive telecom components under customs law.

    Background: Classification Dispute Over Base Station Equipment

    Reliance Jio imported Outdoor Base Station Cabinets, power distribution boards, and other passive components, declaring them as parts of telecom equipment under Customs Tariff Heading (CTH) 8517, which allows duty exemptions for specific telecom infrastructure under Notification No. 25/2005-Cus.

    However, Customs rejected this classification, alleging that:

    • The goods were not active telecom transmission equipment, and
    • They were structural or general electrical goods, more appropriately classifiable under CTH 8537 or other headings, attracting full customs duty.

    Customs raised a demand of over β‚Ή23 crore, alleging misclassification, non-eligibility for exemption, and invoking Section 28 of the Customs Act, 1962 for recovery.

    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 Mumbai

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  • CESTAT Delhi- Statements Under Section 108 Not Admissible Without 138B Compliance

    CESTAT Delhi- Statements Under Section 108 Not Admissible Without 138B Compliance

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 15.06.2025

    CESTAT Delhi- Statements Under Section 108 Not Admissible Without 138B Compliance

    In a significant ruling dated 6 June 2025, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, set aside a penalty of β‚Ή20 lakhs imposed on Appellant under Sections 112 and 114 of the Customs Act, 1962. The Tribunal held that the penalty was unjustified as the decision relied solely on inadmissible statements recorded under Section 108 of the Customs Act without following the mandatory procedure under Section 138B.

    Background of the Case

    The Directorate of Revenue Intelligence (DRI) initiated an investigation into M/s. Sundram Export Pvt. Ltd. and M/s. Netcompware Pvt. Ltd., alleging fraudulent overvaluation of CD-ROMs exported under the Duty Entitlement Pass Book (DEPB) scheme at an inflated FOB value of $19 per piece. This overvaluation allegedly enabled undue credit of DEPB scrips, later used to evade customs duties.

    Appellant was accused of facilitating the procurement and sale of these DEPB licenses and was slapped with a β‚Ή20 lakh penalty, although he was neither an exporter nor an importer.

    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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  • CESTAT Ahmedabad Affirms Importer’s Right to Re-Testing Under CBIC Circular and IS Standards

    CESTAT Ahmedabad Affirms Importer’s Right to Re-Testing Under CBIC Circular and IS Standards

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 14.06.2025

    CESTAT Ahmedabad Affirms Importer’s Right to Re-Testing Under CBIC Circular and IS Standards

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), West Zonal Bench at Ahmedabad, ruled in favor of Maharaja Exim, Surat, affirming the appellant’s right to re-sampling and re-testing under procedural safeguards laid down in CBIC Circular No. 30/2017 and Indian Standard specifications.

    Background of the Case

    • Appellant: Maharaja Exim, Surat
    • Respondent: Commissioner of Customs, Kandla
    • Appeal No.: Customs Appeal No. 10784 of 2025-SMC
    • Issue: Rejection of re-sampling and re-testing request by the Commissioner on the ground that the importer’s representative was present during initial sampling and had raised no objection.

    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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  • CESTAT Chennai- Royalty Payments Not Dutiable Under Customs Valuation Rules

    CESTAT Chennai- Royalty Payments Not Dutiable Under Customs Valuation Rules

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 14.06.2025

    CESTAT Chennai- Royalty Payments Not Dutiable Under Customs Valuation Rules

    In the case of M/s. KAMAZ Motors Ltd. vs. Principal Commissioner of Customs, Chennai-II. The case revolved around the contentious inclusion of royalty payments in the assessable value of imported CKD kits under Rule 10 of the Customs Valuation Rules, 2007.

    Case Background

    KAMAZ Motors Ltd., formerly Kamaz Vectra Motors Ltd., imported CKD kits for manufacturing heavy-duty trucks in India from its related foreign supplier M/s. CJSC Kamaz Foreign Trade Company, Russia. The Customs authorities had provisionally assessed the imports and later issued a Show Cause Notice proposing to add royalty of USD 450 per CKD kitβ€”paid to another group entity M/s. OJSC Kamaz Inc.β€”to the assessable value, alleging it to be a condition of sale.

    The Department relied on Rule 10(1)(c) and 10(1)(e) of the Customs Valuation Rules, 2007, stating that royalty payments were directly linked to the import of CKD kits and therefore must be included in the transaction value.

    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 Chennai

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  • CESTAT Mumbai Quashes β‚Ή2.78 Cr Customs Duty Demand on Road Machinery Import

    CESTAT Mumbai Quashes β‚Ή2.78 Cr Customs Duty Demand on Road Machinery Import

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 14.06.2025

    CESTAT Mumbai Quashes β‚Ή2.78 Cr Customs Duty Demand on Road Machinery Import

    The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench has quashed the duty demand of β‚Ή2.78 Crores, penalties, and confiscation order against M/s Villayati Ram Mittal and its Director. The Tribunal held that the company had not violated the conditions of Serial No. 230 of Notification No. 21/2002-Cus dated 01.03.2002, which allowed exemption from customs duty on road construction equipment.

    Background of the Case

    M/s Villayati Ram Mittal had imported two piling rigs under Bill of Entry dated 10.07.2003, claiming nil customs duty under Sl. No. 230 of the said notification. The exemption was subject to conditions listed in Condition No. 40, which required:

    • The importer to be a contractor for road construction awarded by NHAI or PWD;
    • The imported goods to be used exclusively for road construction;
    • No sale or disposal of the goods for five years from importation.

    The rigs were later found in possession of third parties (M/s QUIPPO and M/s Bhumi Developers), leading to a show cause notice dated 13.05.2008 alleging violation of exemption conditions.

    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 Mumbai

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