#Customs Law

CESTAT Kolkata held that imposing penalties under Sections 114(i) and 114AA requires proof of the exporter's knowledge or active abetment; mere negligence or irresponsible conduct in verifying shipping bills is insufficient. The ruling shields exporters from penal liability absent mens rea, clarifying that procedural lapses do not equate to complicity in smuggling.

CESTAT Chennai holds Circular 36/2010 cannot override Section 149 Customs Act; unchallenged conversion order binds revenue at drawback sanction stage.

The tribunal ruled that customs duty can only be recovered from the actual importer of goods, not from directors of companies that sold title documents on the high seas. This bars revenue from issuing joint several demands against high sea sellers' directors, protecting corporate officers from liability for obligations that legally belong solely to the importer.

CESTAT Kolkata set aside confiscation of unmarked gold seized from a domestic passenger, ruling revenue must first prove foreign origin before Section 123's reverse burden applies. The tribunal held that possession of unmarked gold on a domestic flight alone cannot trigger the smuggling presumption without foundational evidence of foreign source.

Calcutta HC held Customs officers may sample imported food under Section 144 for tariff classification even with food safety concerns, letting revenue probe duty evasion without waiting for separate food safety clearance.

CESTAT Kolkata set aside the gold confiscation, ruling that concealment and missing documents alone do not prove smuggling without foreign origin proof. This clarifies the customs burden under Section 111(b) of the Customs Act 1962, impacting traders.

Duty free shops cannot claim automatic exemption from regulatory laws merely operating beyond the customs barrier, Bombay High Court held. It affirmed that drugs and cosmetics remain under regulatory control despite customs barrier fiscal exemptions.

CESTAT held that adjusting a SAD refund against a sub-judice duty drawback demand is impermissible under Section 142 of the Customs Act, ordering repayment of ₹17,96,125 with interest under Section 11BB and stating that recovery must await adjudication.

CESTAT Allahabad held that accepting an enhanced customs value in writing does not waive the right to appeal under Section 128, Customs Act, 1962. It confirms that such acceptance does not invoke estoppel, safeguarding importers who may inadvertently acknowledge higher valuations during clearance.

The Supreme Court quashed a Rs 425 crore Section 114 Customs Act penalty after finding the order relied on AI-generated citations that were non-existent or mis-quoted. It imposed a zero-tolerance rule for unverified AI material, rendering such decisions void and urging verification by customs officials and litigants.

Delhi High Court holds that pre-CIRP customs duties not filed during insolvency are extinguished once the IBC resolution plan is approved, quashing the customs order.

CESTAT affirmed the importer’s classification of mixed polyester warp-knitted fabrics under tariff item 6005 9000 and upheld the 10 % concessional BCD, because the revenue could not produce technical evidence of mis-classification. The ruling shifts the evidential burden to customs authorities in similar classification disputes, benefiting textile importers.

The Tribunal ruled that the absence of original invoices does not preclude a Cenvat Credit refund if the duty has been paid and the capital goods receipt is established, prioritising substantive eligibility over technical documentation. This protects taxpayers who can substantiate purchases despite missing original paperwork.

CESTAT Kolkata ruled that 12% interest on delayed customs refunds accrues from the expiry of three months after the refund application is filed, not from the re-assessment order date, affirming the higher statutory rate and clarifying the starting point for interest calculation under Section 27.

Customs officials must possess a reasonable belief before seizing goods, and the onus under Sec 123 cannot be shifted to the accused without proper justification. This ruling curtails arbitrary confiscation of gold and safeguards importers from unjust seizure.