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Tag: #CESTATMumbai

  • CESTAT Mumbai Quashes Penalties on Chem Trader Tankers

    CESTAT Mumbai Quashes Penalties on Chem Trader Tankers

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 24.11.2025

    CESTAT Mumbai Quashes Penalties on Chem Trader Tankers

    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 development, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, has delivered a landmark judgment in the Customs Appeal Nos. ​ 86442 and 86445 of 2022, providing relief to Chem Trader Tankers Co. Ltd. and Appellant. The appeals were filed against the Order-in-Original No. ​ 145/2021-22/CAC/CC (Import-II)/MKK dated 11.03.2022, issued by the Commissioner of Customs (Import-II), Mumbai. ​

    Background of the Case

    The case revolved around allegations of misdeclaration of the country of origin and differential freight charges for imported goods. ​ The Commissioner of Customs had imposed penalties under Sections 114A, 114AA, and 112(a) of the Customs Act, 1962, and ordered the confiscation of goods with an option for redemption upon payment of fines. ​ The appellants, Chem Trader Tankers Co. Ltd. and Appellant, challenged these penalties and confiscation orders before the CESTAT Mumbai.

    Key Highlights of the Judgment

    The Tribunal, presided over by Hon’ble (Member Judicial), heard arguments from both sides and reviewed the case records, legal precedents, and submissions. ​ The judgment was heavily influenced by a prior decision in the case of Jupiter Dye Chem Pvt. ​ Ltd. vs. CC (Import-II), Mumbai and CJ Shah & Co. vs. CC (Import-II), reported in 2023 (5) TMI 670-CESTAT Mumbai. ​ In that case, the Tribunal had set aside the impugned orders, ruling that the allegations of misdeclaration and differential freight charges were based on presumptions and lacked substantial evidence.

    The Tribunal noted that the Revenue had not provided any order from the Hon’ble Supreme Court or High Court to challenge or overturn the previous decision. ​ As per the principles of judicial discipline and consistency, the Tribunal followed the earlier ruling and set aside the penalties and confiscation orders in the present appeals. ​

    Observations by the Tribunal ​

    The Tribunal emphasized the importance of evaluating the facts and evidence presented in the case. ​ It highlighted that the Revenue’s case was based on presumptions and lacked concrete evidence to support the allegations of misdeclaration and additional freight charges. ​ The Tribunal also pointed out that the adjudicating authority failed to establish any false or incorrect material used by the importers, which is a prerequisite for imposing penalties under Sections 114AA and 112(a) of the Customs Act, 1962. ​

    Final Order

    In its final order, pronounced on 20.11.2025, the Tribunal set aside the impugned order and allowed the appeals with consequential relief as per law. ​ The penalties imposed on Chem Trader Tankers Co. Ltd. and Appellant were cancelled, and the confiscation of goods was annulled.

    Implications of the Judgment

    This decision reinforces the importance of evidence-based adjudication in customs cases and upholds the principles of judicial discipline. ​ It serves as a reminder to authorities to ensure that penalties and confiscation orders are not imposed based on mere assumptions but are backed by substantial evidence. ​

    The judgment is a significant victory for the appellants and sets a precedent for similar cases in the future. It highlights the role of the judiciary in safeguarding the rights of importers and ensuring that the rule of law prevails in customs-related disputes. ​ This case is a testament to the importance of a fair and transparent legal process, and it underscores the need for authorities to adhere to established legal principles while adjudicating cases. ​

    The decision by CESTAT Mumbai is a step forward in ensuring justice and accountability in the realm of customs law. ​

    Source: CESTAT Mumbai

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  • CESTAT Mumbai Clarifying Customs Classification of Multifunctional Audio Equipment

    CESTAT Mumbai Clarifying Customs Classification of Multifunctional Audio Equipment

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 20.11.2025

    CESTAT Mumbai Clarifying Customs Classification of Multifunctional Audio Equipment

    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 & Service Tax Appellate Tribunal (CESTAT), Mumbai, has delivered a judgment in favor of M/s Yamaha Music India Pvt. Ltd., Gurgaon, Haryana, in Customs Appeal No. ​ 87775 of 2017. ​ The case revolved around the classification of imported goods, specifically Audio Video Receivers (AVRs) and Home Theatre Systems (HTS), under the Customs Tariff Act, 1975. ​

    Background of the Case

    The dispute arose from the classification of multifunctional audio and video equipment imported by Yamaha Music India Pvt. ​ Ltd. The company classified these goods under Customs Tariff Item (CTI) 8518 4000/8543 7099 for AVRs and CTI 8518 2900/8522 9000 for HTS, claiming they were audio-frequency electric amplifiers. ​ However, the Commissioner of Customs (NS-V), Nhava Sheva, reclassified the goods under CTI 8527 9100, which pertains to “Reception apparatus for radio broadcasting combined with sound recording or reproducing apparatus.” ​ This reclassification led to a demand for differential customs duty of Rs. ​ 2,28,29,585/- and the imposition of penalties.

    The appellant challenged the reclassification, arguing that the principal function of the imported goods was sound amplification, not radio broadcasting. ​ They contended that the inclusion of radio functionality did not alter the primary classification of the goods as amplifiers. ​

    Key Issues in the Case

    The case centered on two primary issues:

    1. Whether the imported goods should be classified under CTI 8518 4000/8543 7099 as amplifiers or under CTI 8527 9100 as radio-broadcast reception apparatus. ​
    2. Whether the demand for differential duty, confiscation, and penalties imposed by the Commissioner of Customs was legally sustainable. ​

    Tribunal’s Analysis and Decision

    The Tribunal conducted a detailed analysis of the Customs Tariff Act, 1975, and the General Rules for Interpretation (GIR) of the First Schedule. It emphasized that classification should be determined based on the terms of the headings and any relevant Section or Chapter Notes, as per GIR-1. ​ The Tribunal also referred to previous judgments and CBEC clarifications, which supported the classification of similar products under CTI 8518. ​

    The Tribunal concluded that the principal function of the imported goods was sound amplification, and the radio functionality was merely an additional feature. ​ Therefore, the goods were rightly classifiable under CTI 8518 4000 as audio-frequency electric amplifiers. ​ The Tribunal also noted that the extended period of limitation for demanding duty was not applicable, as there was no evidence of suppression, fraud, or misrepresentation by the appellant. ​

    Key Takeaways from the Judgment

    1. Principal Function Determines Classification: The Tribunal reiterated that the classification of goods should be based on their principal function. ​ In this case, the primary function of the imported goods was sound amplification, not radio broadcasting. ​
    2. Application of General Rules for Interpretation (GIR): The Tribunal emphasized the importance of following GIR-1 for determining the correct classification of goods. ​ Subsequent rules should only be applied if classification cannot be determined under GIR-1. ​
    3. Extended Period of Limitation: The Tribunal ruled that the extended period of limitation for demanding duty cannot be invoked in the absence of suppression, fraud, or misrepresentation. ​
    4. Precedents and CBEC Clarifications: The Tribunal relied on previous judgments and CBEC clarifications to support its decision, highlighting the importance of consistency in classification.

    Conclusion

    The CESTAT Mumbai’s decision in favor of Yamaha Music India Pvt. Ltd. is a landmark ruling that underscores the significance of correctly interpreting the Customs Tariff Act and the General Rules for Interpretation. It serves as a reminder to importers and customs authorities alike to focus on the principal function of goods when determining their classification. This judgment not only provides clarity on the classification of multifunctional audio and video equipment but also sets a precedent for similar cases in the future.

    Source: CESTAT Mumbai

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  • CESTAT Mumbai- No Service Tax Liability on Foreign Bank Charges under Reverse Charge Mechanism

    CESTAT Mumbai- No Service Tax Liability on Foreign Bank Charges under Reverse Charge Mechanism

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 28.10.2025

    CESTAT Mumbai- No Service Tax Liability on Foreign Bank Charges under Reverse Charge Mechanism

    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 & Service Tax Appellate Tribunal (CESTAT), Mumbai, has delivered a judgment in favor of ICICI Bank Limited, setting aside service tax demands imposed by the Commissioner of Service Tax-I/IV, Mumbai. This decision, issued on October 23, 2025, addresses a long-standing dispute regarding the applicability of service tax under the Reverse Charge Mechanism (RCM) on foreign bank charges in export/import transactions.

    Background of the Case

    The appeals filed by ICICI Bank Limited challenged three Orders-in-Original issued by the Commissioner of Service Tax-I/IV, Mumbai. ​ These orders demanded service tax, interest, and penalties for the periods between July 2012 and June 2017. ​ The dispute revolved around whether Indian banks, acting as intermediaries for exporters and importers, should be considered recipients of services provided by foreign banks and, consequently, liable to pay service tax under RCM. ​

    The Department argued that foreign banks deduct charges for processing import/export documents and remittances, and Indian banks, as recipients of these services, are liable to pay service tax under Notification No. ​ 30/2012-Service Tax dated June 20, 2012. ​

    Key Issues in the Case ​

    The Tribunal identified two primary issues for determination:

    1. Whether Indian banks are the recipients of services in export/import transactions involving the transfer/exchange of documents and money on behalf of their client exporters/importers. ​
    2. Whether Indian banks are liable to pay service tax on foreign bank charges under the Reverse Charge Mechanism. ​

    Arguments Presented

    Appellant’s Arguments:

    • ICICI Bank argued that they act as advising banks for Indian exporters and facilitate transactions but are not recipients of services from foreign banks. ​
    • The foreign bank charges are deducted from the remittance amount and paid by the exporter/importer directly, not by the Indian bank. ​
    • The bank emphasized that there is no flow of consideration from the Indian bank to the foreign bank, which is a necessary condition for service tax liability under RCM. ​
    • The bank cited several precedents, including the State Bank of Bikaner & Jaipur case, which held that Indian banks are not liable for service tax on foreign bank charges under RCM. ​

    Revenue’s Arguments:

    • The Department contended that Indian banks are recipients of services provided by foreign banks and are liable to pay service tax under RCM. ​
    • They relied on a Trade Notice issued by the Chief Commissioner, Central Excise, Mumbai Zone-I, which clarified that Indian banks should pay service tax on foreign bank charges. ​

    Tribunal’s Observations and Decision

    After hearing both sides and reviewing the case records, the Tribunal concluded that Indian banks are not the recipients of services provided by foreign banks in export/import transactions. ​ The Tribunal relied heavily on the precedent set by the State Bank of Bikaner & Jaipur case, which established that Indian banks merely act as facilitators for their clients and do not receive services from foreign banks.

    The Tribunal also referred to the Madras High Court’s judgment in the BGR Energy Systems Limited case, which clarified that the liability to pay service tax on foreign bank charges lies with the exporter/importer, not the Indian bank.

    Final Verdict

    The Tribunal ruled that the service tax demands, interest, and penalties imposed on ICICI Bank Limited were not legally sustainable. ​ Consequently, the impugned orders were set aside, and the appeals filed by ICICI Bank Limited were allowed. ​

    Key Takeaways

    1. No Service Tax Liability for Indian Banks: Indian banks acting as intermediaries in export/import transactions are not considered recipients of services from foreign banks and are not liable to pay service tax under RCM for foreign bank charges. ​
    2. Precedents Matter: The Tribunal’s decision was heavily influenced by previous rulings, particularly the State Bank of Bikaner & Jaipur case and the BGR Energy Systems Limited judgment. ​
    3. Clarity on RCM Applicability: The judgment reinforces the principle that service tax under RCM is applicable only when there is a clear flow of consideration from the service recipient to the service provider. ​

    Conclusion

    This landmark decision provides much-needed clarity on the taxability of foreign bank charges in export/import transactions. ​ It is a significant relief for Indian banks, as it exempts them from service tax liability under RCM for such charges. ​ The ruling also underscores the importance of legal precedents and the need for clear guidelines in interpreting tax laws. This case will undoubtedly serve as a reference point for similar disputes in the future.

    Source: CESTAT Mumbai

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  • CESTAT Mumbai Clarifies ‘Similar Goods’ Criteria under FTP for EOU DTA Clearances

    CESTAT Mumbai Clarifies ‘Similar Goods’ Criteria under FTP for EOU DTA Clearances

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 25.10.2025

    CESTAT Mumbai Clarifies ‘Similar Goods’ Criteria under FTP for EOU DTA Clearances

    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 judgment, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, has ruled in favor of Pentair Water India Private Limited, a 100% Export Oriented Unit (EOU), in a long-standing dispute with the Commissioner of Central Excise & Service Tax, Goa. The case revolved around the classification of goods, eligibility for concessional excise duty, and compliance with the Foreign Trade Policy (FTP) for Domestic Tariff Area (DTA) clearances. ​

    Background of the Case

    Pentair Water India Private Limited, engaged in the manufacture and export of components for industrial water treatment and filtration systems, faced allegations from the Department of Central Excise & Service Tax, Goa. ​ The Department claimed that the company had misclassified its products and violated provisions of the FTP by clearing goods to the DTA at concessional excise duty rates under Notification No. ​ 23/2003-C.E. dated 31.03.2003 and Notification No. ​ 12/2012-C.E. dated 17.03.2012. ​ The Department also alleged that the goods cleared to the DTA were not “similar goods” as required under Para 6.8(a) of the FTP. ​

    The dispute covered the period from 2008 to 2015, with the Department demanding differential duty and imposing penalties on the company. ​ Pentair Water India Private Limited challenged the orders, asserting that their DTA clearances complied with all legal provisions, including the FTP and excise duty notifications. ​

    Key Issues in the Case ​

    The Tribunal examined three critical issues:

    1. Whether the DTA clearances violated Para 6.8(a) of the FTP. ​
    2. Whether the revised classification of goods under Tariff Item 8421 9900 was legally sustainable. ​
    3. Whether the differential duty demands and penalties imposed were justified. ​

    Tribunal’s Observations and Ruling ​

    After hearing both sides and reviewing the case records, the Tribunal made the following key observations:

    1. Classification of Goods: The Tribunal held that the goods in question, such as code line vessels, filter valve assemblies, RO systems, and water filtration systems, were appropriately classifiable under Tariff Item 8421 2190 as “filtering or purifying machinery and apparatus for water, other than household type.” ​ The Department’s attempt to classify these goods as “parts” under Tariff Item 8421 9900 was deemed unsustainable. ​
    2. Eligibility for Concessional Duty: Since the goods were classified under Tariff Item 8421 2190, the Tribunal ruled that Pentair Water India was eligible for concessional excise duty under Notification No. ​ 12/2012-C.E. dated 17.03.2012. ​
    3. Compliance with FTP: The Tribunal found that the company’s DTA clearances complied with Para 6.8(a) of the FTP. ​ The goods cleared to the DTA were “similar goods” as defined under the Customs Valuation Rules, and the company had not exceeded the overall entitlement of 50% of the FOB value of exports. ​ The Tribunal also noted that the Development Commissioner, the competent authority for implementing the FTP, had not raised any objections to the DTA clearances. ​
    4. Extended Period of Limitation: The Tribunal rejected the Department’s claim of suppression or misrepresentation of facts, noting that Pentair Water India had regularly submitted returns and was audited by various authorities. ​ Therefore, the invocation of the extended period of limitation was deemed unjustified. ​

    Final Verdict

    The Tribunal set aside the impugned orders dated 30.01.2015 and 04.11.2016, ruling that the demands and penalties imposed on Pentair Water India were not legally sustainable. ​ The appeals filed by the company were allowed with consequential benefits, while the appeal filed by the Revenue was dismissed. ​

    Implications of the Judgment

    This landmark ruling reinforces the importance of adhering to the principles of classification under the Central Excise Tariff Act and the FTP. It also highlights the significance of the Development Commissioner’s role in determining compliance with the FTP. ​ The judgment sets a precedent for other EOUs facing similar disputes, emphasizing the need for a clear and consistent interpretation of legal provisions. Pentair Water India’s victory is a testament to the importance of maintaining proper documentation, adhering to legal provisions, and challenging unjustified demands. This case serves as a reminder to businesses to stay vigilant and ensure compliance with all applicable laws and regulations while protecting their rights.

    Source: CESTAT Mumbai

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  • CESTAT Mumbai Sets Aside Customs Order Denying Refund of Special Additional Duty (SAD)

    CESTAT Mumbai Sets Aside Customs Order Denying Refund of Special Additional Duty (SAD)

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 23.10.2025

    CESTAT Mumbai Sets Aside Customs Order Denying Refund of Special Additional Duty (SAD)

    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.

    The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Mumbai, recently delivered a significant judgment in the case of Fibre Bond Industries vs. Commissioner of Customs (NS-III), addressing the issue of refund claims for Special Additional Duty (SAD) under Section 3(5) of the Customs Tariff Act, 1975. This decision, marked as Final Order No. ​ 86686/2025, has far-reaching implications for importers and traders dealing with SAD refunds.

    Background of the Case

    The appellant, Fibre Bond Industries, had imported PVC-coated fabric under three bills of entry dated December 2011. The company paid ₹2,60,793 as SAD, a duty levied under Section 3(5) of the Customs Tariff Act, 1975. ​ Subsequently, the company sought a refund of the SAD after selling the imported goods, as per the provisions of Notification No. ​ 102/2007-Cus dated 14th September 2007. ​ However, the Deputy Commissioner rejected the refund claim, citing the limitation period under Section 27 of the Customs Act, 1962. ​ This decision was upheld by the Commissioner of Customs (Appeals), Mumbai-II. ​

    Key Arguments and Legal Precedents ​

    The appellant argued that the refund claim was filed within one year of the sale of goods, as prescribed by the notification, and that the limitation period under Section 27 of the Customs Act, 1962, should not apply. ​ The appellant relied on the Larger Bench decision in Ambey Sales vs. Commissioner of Customs, Ludhiana [2024 (6) TMI 257 – CESTAT – Chandigarh-LB], which clarified that the time limit for filing SAD refund claims under the notification is not applicable. ​

    The Tribunal also referred to the Delhi High Court’s judgment in Sony India Pvt. ​ Ltd vs. Commissioner of Customs, New Delhi [2014 (304) ELT 660 (Del.) ​], which held that imposing a limitation period not contemplated by the statute is ultra vires. ​

    Tribunal’s Observations and Decision ​

    The Tribunal emphasized that SAD is a levy designed to counterbalance state taxes on imported goods, ensuring a level playing field for domestic and imported goods. It noted that the refund mechanism is a machinery provision to implement this exemption post-clearance. ​ Therefore, imposing a limitation period unrelated to the statutory provisions of Section 3(5) of the Customs Tariff Act, 1975, is unjustified. ​

    The Tribunal concluded that the appellant, having sold the imported goods and discharged the appropriate state taxes, was eligible for the refund. ​ It set aside the impugned order and allowed the appeal, reaffirming the principle that refund claims should not be denied based on an arbitrary limitation period. ​

    Implications of the Judgment

    This decision is a significant win for importers and traders, as it reinforces the principle that refund claims for SAD cannot be denied based on limitations not explicitly stated in the statute. ​ It provides clarity on the “relevant date” for filing refund claims, ensuring that importers can claim refunds within one year of the sale of goods, as per the notification. ​

    The judgment also highlights the importance of judicial precedents in resolving disputes and upholding the rights of taxpayers. By relying on decisions from the Larger Bench and the Delhi High Court, the Tribunal has set a strong precedent for future cases involving SAD refunds. ​

    Conclusion

    The Fibre Bond Industries vs. Commissioner of Customs (NS-III) case is a landmark decision that underscores the importance of adhering to statutory provisions and established legal precedents. It provides much-needed clarity on the refund mechanism for SAD and ensures that importers are not unfairly denied their rightful claims. ​ This judgment is a step forward in promoting fairness and transparency in customs law, benefiting the trading community at large.

    Source: CESTAT Mumbai

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  • CESTAT Mumbai Sets Aside Penalty on Courier Company

    CESTAT Mumbai Sets Aside Penalty on Courier Company

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 15.10.2025

    CESTAT Mumbai Sets Aside Penalty on Courier Company

    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.

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, recently delivered a significant judgment in the appeals filed by Bombino Express Pvt. ​ Ltd. and its Director, against penalties imposed by the Commissioner of Customs (Appeals), Mumbai Zone III. ​ This decision, pronounced on October 7, 2025, marks a pivotal moment in the interpretation of penal provisions under the Customs Act, 1962.

    Background of the Case

    The case originated from allegations of mis-declaration and undervaluation of goods imported through courier mode by M/s. ​ Smashing Traders Pvt. ​ Ltd., facilitated by Bombino Express Pvt. ​ Ltd. Investigations revealed discrepancies between the declared value of goods and their actual value, leading to penalties being imposed on Bombino Express Pvt. ​ Ltd. and Appellant under Sections 112(a), 112(b), and 114AA of the Customs Act, 1962. ​

    The penalties were based on claims that Bombino Express and Appellant were complicit in the smuggling activities orchestrated by M/s. ​ Smashing Traders Pvt. ​ Ltd. and its mastermind, Mr. Kuo Leong. ​ The authorities alleged that Bombino Express knowingly facilitated the clearance of undervalued goods and that Appellant was involved in the procurement and dispatch of these goods.

    Source: CESTAT Mumbai

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  • CESTAT Mumbai- Customs Cannot Enhance Value Without Contemporaneous Data

    CESTAT Mumbai- Customs Cannot Enhance Value Without Contemporaneous Data

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 14.10.2025

    CESTAT Mumbai- Customs Cannot Enhance Value Without Contemporaneous Data

    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, delivered a judgment on October 9, 2025, providing relief to Artex Textile Pvt Ltd in a series of customs appeals. The case revolved around the reassessment of imported polyester fabrics under Section 17(4) of the Customs Act, 1962, and the denial of benefits under the exemption notification for additional duty of customs. ​ This decision has far-reaching implications for importers and the interpretation of customs valuation rules and exemption notifications. ​

    Background of the Case

    Artex Textile Pvt Ltd, an importer of polyester fabrics, faced enhanced assessable values imposed by the proper officer under Section 17 of the Customs Act, 1962. ​ The reassessment was challenged by the importer, citing procedural lapses under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. ​ Additionally, the denial of exemption benefits under Notification No. 30/2004-Central Excise was contested.

    Source: CESTAT Mumbai

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  • CESTAT Mumbai Sets Aside Penalty on CHA Under Section 112(a) of Customs Act

    CESTAT Mumbai Sets Aside Penalty on CHA Under Section 112(a) of Customs Act

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 10.10.2025

    CESTAT Mumbai Sets Aside Penalty on CHA Under Section 112(a) of Customs Act

    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 legal development, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, has delivered a favorable judgment for Kwick Cargo Tracers & Lifters, a Customs House Agent (CHA), in Customs Appeal No. ​ 85445 of 2017. ​ The appeal challenged the penalty of ₹1 lakh imposed under Section 112(a) of the Customs Act, 1962, by the Commissioner of Customs, NS-III, JNCH, Nhava Sheva, through an Order-in-Original dated 6.1.2017. ​

    Background of the Case

    The case revolved around the import of “Melamine ware viz. ​ Kitchenware and Tableware” by M/s. ​ Sirthai Superware India Ltd., the main noticee in the proceedings. ​ The Commissioner of Customs had imposed penalties on both the importer and the appellant-CHA, citing erroneous classification of goods and differential customs duty demands. However, the importer had previously challenged the same order before the Tribunal in Customs Appeal No. ​ 85603 of 2019. ​ In its final order dated 10.10.2019, the Tribunal set aside the penalty imposed on the importer, holding that the goods were not liable for confiscation under Section 111 of the Customs Act, 1962.

    Source: CESTAT Mumbai

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  • CESTAT Mumbai Sets Aside Confiscation and Duty Recovery in Naphthalene Import Dispute

    CESTAT Mumbai Sets Aside Confiscation and Duty Recovery in Naphthalene Import Dispute

    ALO Law Office- IDT Tax I Arbitration I Litigation

    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. ​ 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. ​ 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. ​ 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. ​

    Source: CESTAT Mumbai

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  • CESTAT Mumbai Sets Aside Confiscation and Penalty

    CESTAT Mumbai Sets Aside Confiscation and Penalty

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 07.10.2025

    CESTAT Mumbai Sets Aside Confiscation and Penalty

    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 & Service Tax Appellate Tribunal (CESTAT), Mumbai, has delivered a favorable judgment for the National Sports Club of India (NSCI) in the Customs Appeal No. 88657 of 2014. ​ The case revolved around the importation of SVPS Chillers and the applicability of customs exemptions under Notification No. ​ 21/2012-Cus dated 17.03.2012. ​

    Background of the Case

    The NSCI had filed a Bill of Entry for the clearance of SVPS Chillers, classifying the goods under CTH 84198940 and claiming the benefit of the aforementioned notification. ​ However, upon verification, customs authorities determined that the exemption was not applicable, as it was limited to packaged commodities meant for retail sale under the Legal Metrology (Packaged Commodities) Rules, 2011. ​ Consequently, the goods were confiscated under Section 111(m) of the Customs Act, 1962, with a redemption fine of Rs. ​ 10,00,000 and a penalty of Rs. ​ 5,00,000 imposed under Section 112(a). ​ The NSCI appealed the decision, but the Commissioner (Appeals) upheld the confiscation and further invoked Section 111(o) for the first time, leading to the current appeal before the Tribunal.

    Source: CESTAT Mumbai

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