Confiscation cannot be Ordered for Re-exported Goods: CESTAT quashes Absolute Confiscation Order under Customs Act [Read Order]
The Tribunal held that Confiscation Cannot be Imposed on Goods that No longer Exist within Customs Jurisdiction by the time Appellate proceedings Commence
The Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has set aside an order directing absolute confiscation of imported Zinc Pyrithione, holding that goods already re-exported prior to the revenue appeal cannot later be subjected to confiscation under Section 111(d) of the Customs Act, 1962.
The case concerned M/s Chemspark India Pvt. Ltd., which had imported and brought in consignments of Zinc Pyrithione and Sodium Coco Ampho Diacetate from China.
The consignment of Zinc Pyrithione fell under the Schedule of the Insecticides Act, 1968, thereby requiring mandatory registration under Section 9 of the Act. Since no CIB registration was available at the time of assessment, the goods were directed to be warehoused pending compliance.
Multiple extensions were granted to the importer, who ultimately sought permission to re-export the goods when the registration could not be procured.
The original adjudicating authority ordered confiscation under Section 111(m) but permitted redemption solely for the purpose of re-export upon payment of fine and penalty under Sections 125 and 112(a).
The importer accepted the order, paid the amounts, and completed re-export in October 2019. Despite this, the revenue filed an appeal before the Commissioner (Appeals), who subsequently treated the goods as prohibited and directed absolute confiscation under Section 111(d), setting aside the option of redemption.
Before the Tribunal, comprising Ajay Sharma (Judicial Member), it was demonstrated that the re-export had taken place prior to the initiation of the revenue appeal, supported by the Let Export Order issued in October 2019.
It was argued that goods not available in the country cannot be subjected to absolute confiscation, particularly when they were not cleared under bond or any conditional undertaking.
The Tribunal agreed with this position and held that confiscation cannot be imposed on goods that no longer exist within the customs jurisdiction by the time appellate proceedings commence. Since the re-export had been duly communicated to the department and the goods were no longer physically available, the order of the Commissioner (Appeals) directing absolute confiscation was found to be unsustainable in law.
Allowing the appeal, the Tribunal restored the original order of the adjudicating authority and set aside the order of the Commissioner (Appeals), reaffirming that absolute confiscation cannot be invoked in absence of the goods.
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