ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 26.06.2025
CESTAT Ahmedabad Dismisses Allegations of SEZ Export Fraud and Duty Evasion
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad, vide Final Order Nos. A/10315-10316/2023 dated 23.02.2023, has quashed the customs duty demand and associated penalties imposed by the Commissioner of Customs, Kandla. The Tribunal found that the allegations of clandestine removal of goods from the Kandla Special Economic Zone (KASEZ) were unsupported by concrete evidence.
Background of the Case
The case pertained to the alleged misdeclaration of goods declared as βFancy Scarvesβ and βFancy Dupattasβ exported by M/s Siddhnath Shipping, operating as a KASEZ trading unit. The goods were sourced from M/s Cosmic Textiles Pvt. Ltd., a 100% EOU based in Surat.
The customs department alleged that:
- Siddhnath Shipping declared a net weight of 19,002 Kgs in the shipping bill, while actual weight found was only 1,450 Kgs.
- The goods exported were of inferior quality, contrary to what was received from the EOU.
- There was a clandestine diversion of the actual consignment into the Domestic Tariff Area (DTA), violating SEZ/EOU rules and customs law.
Based on these findings, the department issued a Show Cause Notice demanding βΉ57.24 lakhs in customs duty, confiscated the goods, and levied penalties under Section 114(ii) 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 Ahmedabad
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