ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 27.02.2026
CESTAT Chandigarh Relaxes BIS QCO Rigor: Confiscation Set Aside, Only Redemption Fine Upheld for Deep Fryer Imports
This Article has been written by Advocate Ravi Shekhar Jha-BALLB & LLM (Constitutional Law) based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email idΒ intelconsul@gmail.com or on his Mobile +91-9999005379.
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chandigarh, recently delivered a significant judgment in the case of M.G. β Bakers Pvt Ltd vs. Commissioner of Customs, Ludhiana. β This case revolved around the import of goods requiring Bureau of Indian Standards (BIS) registration and the legal implications of procedural violations under the Customs Act, 1962. β The tribunal’s decision highlights key legal principles, including the retrospective application of laws, the importance of mens rea in imposing penalties, and the distinction between procedural and substantive violations. β
Background of the Case β
M.G. Bakers Pvt Ltd, the appellant, imported goods, including S/S Deep Fryer models DF 11D-17 and DF 11D-17′, under Tariff Item 84198110 of the Customs Tariff Act, 1975. β The goods were declared in Bill of Entry No. β 9314687 dated 05.04.2025. β During the examination of the goods, it was found that the imported items were covered under the Safety of Household, Commercial and Similar Electrical Appliances (Quality Control) Order, 2024 (QCO 2024), which mandated BIS registration for such imports. β However, the appellant did not possess a valid BIS license or registration, leading the Revenue to classify the goods as “prohibited” under Section 2(33) of the Customs Act, 1962. β Consequently, the goods were ordered to be confiscated under Section 111(d) of the Act, with an option for redemption upon payment of a fine and re-export. β
The appellant contested the confiscation, arguing that the QCO 2024 had been superseded by QCO 2025 [Order No. β S.O. 2232(E) dated 19.05.2025], which deferred the requirement for BIS registration to 19.03.2026. β The appellant claimed that the government did not intend to impose BIS registration requirements before this date, and therefore, the confiscation and penalty were unjustified. β
Arguments Presented
Appellant’s Arguments β
- Supersession of QCO 2024: The appellant argued that QCO 2025 explicitly superseded QCO 2024 and deferred the BIS registration requirement to 19.03.2026. β Thus, there was no legal basis for confiscating the goods or imposing penalties. β
- No Mens Rea: The appellant contended that there was no malafide intent or mens rea in the import process, as the goods were declared correctly in the Bill of Entry and the procedural lapse was unintentional. β
- Procedural Nature of Violation: The appellant emphasized that the requirement for BIS registration was a procedural formality, and the confiscation and penalty were disproportionate to the nature of the violation. β
- Re-export Option: The appellant pointed out that the adjudicating authority had already allowed the re-export of the goods, which implied that the goods were not inherently prohibited. β
Department’s Arguments
- Violation of QCO 2024: The department argued that the goods were imported during the enforcement period of QCO 2024, which required BIS registration. β The subsequent QCO 2025 did not have retrospective effect and could not absolve the appellant’s violation. β
- Confiscation and Redemption Fine: The department maintained that the goods were liable for confiscation under Section 111(d) of the Customs Act, 1962, and the appellant was granted the option to re-export the goods upon payment of a redemption fine of Rs. β 25,000.
Tribunal’s Observations and Decision β
After hearing both parties and reviewing the evidence, the tribunal made the following observations:
- Retrospective Application of Law: The tribunal agreed with the department that QCO 2025, which deferred the BIS registration requirement to 19.03.2026, did not have retrospective effect. β Therefore, the appellant’s violation under QCO 2024 at the time of import was valid. β
- Procedural Violation: The tribunal noted that the violation was procedural in nature, as the BIS registration was a requirement for the foreign manufacturer or supplier, not the appellant. β The tribunal emphasized that procedural violations do not warrant severe penalties like confiscation. β
- Mens Rea and Penalty: The tribunal highlighted that mens rea (intent or knowledge of wrongdoing) is essential for imposing penalties. β Since the department failed to prove any malafide intent on the part of the appellant, the tribunal found no justification for imposing a penalty. β
- Proportionality of Punishment: The tribunal determined that confiscation of goods was not warranted in this case. β Instead, it reduced the redemption fine from Rs. β 25,000 to Rs. β 15,000, considering the procedural nature of the violation. β
Final Order
The tribunal ruled in favor of M.G. Bakers Pvt Ltd, setting aside the penalty and reducing the redemption fine to Rs. β 15,000. The department was directed to release the goods to the appellant upon payment of the reduced fine within one week of receiving the certified copy of the order. β
Key Takeaways
This case underscores several important legal principles:
- Retrospective Application of Laws: Laws and regulations are generally not applied retroactively unless explicitly stated. β In this case, the tribunal upheld the principle that QCO 2025 could not absolve violations committed under QCO 2024. β
- Mens Rea in Penalty Imposition: The tribunal reiterated that penalties cannot be imposed without proving malafide intent or mens rea. β Procedural violations without intent to evade or deceive do not warrant penalties. β
- Proportionality in Punishment: The tribunal emphasized the importance of proportionality in legal decisions, reducing the redemption fine and setting aside the penalty to ensure justice. β
- Procedural vs. Substantive Violations: The tribunal distinguished between procedural and substantive violations, ruling that procedural lapses should not lead to severe consequences like confiscation. β
Conclusion
The judgment in M.G. β Bakers Pvt Ltd vs. Commissioner of Customs, Ludhiana serves as a reminder of the importance of adhering to legal principles such as mens rea, proportionality, and the non-retrospective application of laws. It also highlights the need for clarity in regulatory requirements to avoid unnecessary disputes and penalties. β This case is a valuable reference for importers and legal practitioners navigating the complexities of customs regulations and procedural compliance.
Source: CESTAT Chandigarh
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