Case Details: Muchipara Consumers Co-Operative Stores Ltd. vs. Commissioner of Customs (Appeals), New Delhi (2026) 39 Centax 5 (Tri.-Del)
Judiciary and Counsel Details
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- Justice Dilip Gupta, President & Ms Hemambika R. Priya, Member (T)
- Shri S. Sunil, Advocate, for the Appellant.
- Shri Nikhil Mohan Goyal, Authorised Representative, for the Respondent.
Facts of the Case
The appellant participated in an e-auction notified by the Customs Department for sale of seized/confiscated foreign origin cigarettes. The appellant deposited the required Earnest Money Deposit (EMD) and, after being declared the highest bidder, also deposited the additional security amount. The department subsequently required deposit of the balance bid amount. The appellant repeatedly sought the testing report and details regarding the date of manufacture of the cigarettes on the ground that cigarettes could not be sold without compliance with Rule 3 of the Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008. During this period, CBIC Circular No. 9/2017-Customs, dated 29-03-2017 clarified that cigarette packets not complying with packaging and labelling requirements should not be released for home consumption and should be destroyed. In view of the said Circular and absence of the required particulars, the appellant sought refund of the deposited amount, but the department forfeited the EMD on the ground of non-payment of the balance bid amount. The department contended that CBIC Circular No. 9/2017-Customs, dated 29-03-2017, was not applicable since the e-auction notice had been issued and the auction had been conducted prior to the issuance of the Circular. The matter was placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
CESTAT Held
The CESTAT held that CBIC Circular No. 9/2017-Customs, dated 29-03-2017, applied since the cigarettes had not been released when the Circular came into force, and the department had not shown compliance with the packaging and labelling requirements under the Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008. It was therefore held that the cigarette packets could not be released for home consumption and were liable to be destroyed, and consequently, forfeiture of the Earnest Money Deposit (EMD) merely for non-payment of the balance bid amount was unjustified. Accordingly, the orders rejecting refund were set aside, and a refund of the deposited amount, along with interest at 6% per annum, was directed.
List of Cases Cited
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- Muchipara Consumers Co-operative Stores Ltd. v. Additional Commissioner — W.P. (C) No. 9301 of 2023, decided on 14-7-2023 by Delhi High Court — Referred [Para 5]
- Muchipara Consumers Co-Operative Stores Ltd. v. Union of India — (2025) 36 Centax 211 (Del.) — Referred [Paras 7, 9]
List of Departmental Clarification Cited
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- C.B.E. & C. Circular No. 9/2017-Cus., dated 29-3-2017 [Paras 2, 10, 11, 16, 17, 18, 19, 22, 24]
- Instructions dated 10-2-2010 [Paras 10, 11, 17, 18, 19]
