Case Details: L.R.C. Speciality Chemicals Pvt. Ltd. vs. Commissioner of Customs (Exports), Raigad (2025) 36 Centax 295 (Tri.-Bom)
Judiciary and Counsel Details
- S/Shri Ajay Sharma, Member (J) & C J Mathew, Member (T)
- Shri Vinay S Sejpal, Adv., for the appellants
- Shri Krishna Azad, Assistant Commissioner (AR), for the respondent
Facts of the Case
The appellant-assessee imported goods duty-free under the Foreign Trade Policy, subject to fulfilment of export obligation, and the Directorate General of Foreign Trade (DGFT) subsequently issued an export obligation discharge certificate acknowledging completion of such obligation. Despite the discharge of export obligation in the records of the licensing authority, Customs authorities initiated proceedings alleging that the duty-free imported goods had been transferred to another entity and used for the manufacture of goods cleared for domestic consumption. On that basis, Customs invoked Section 125 of the Customs Act, 1962 to seek confiscation, fine in lieu of confiscation, and recovery of duty foregone along with interest. The matter was accordingly placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
CESTAT Held
The CESTAT held that once the export obligation stood discharged in the records of the DGFT, the jurisdiction of Customs to re-examine compliance with export obligation ceased to subsist. The Tribunal held that the issuance of an export obligation discharge certificate by the licensing authority precluded Customs from alleging violation of export obligation conditions. It was held that in such circumstances, invocation of Section 125 of the Customs Act, 1962 for confiscation or for recovery of duty foregone and interest was not sustainable. The Tribunal accordingly held that the proceedings initiated by Customs were without jurisdiction and allowed the appeals.
List of Cases Cited
- Commissioner v. Aditya Birla Nuvo Ltd — 2021 (378) E.L.T. 42 (Kar.) — Followed [Paras 4, 8, 10]
- Commissioner v. Air India Ltd. — 2023 (386) E.L.T. 236 (Bom.) — Referred [Para 4]
- Commissioner v. Autolite (India) Ltd — 2003 (157) E.L.T. 13 (Bom.) — Followed [Paras 4, 9, 10]
- Commissioner v. Finesse Creation Inc — 2009 (248) E.L.T. 122 (Bom) — Referred [Para 4]
- Commissioner v. Jagdish Cancer & Research Centre — 2001 (132) E.L.T. 257 (SC) — Followed [Paras 4, 5, 10]
- Commissioner v. Raja Impex (P) Ltd. — 2008 (229) E.L.T. 185 (P & H) — Referred [Para 4]
- Fortis Hospital Ltd. v. Commissioner — 2015 (318) E.L.T. 551 (SC) — Referred [Para 4]
- Navayuga Engineering Co Ltd. v. Union of India — 2024 (390) E.L.T. 3 (SC) — Referred [Para 4]
- Titan Medical Systems Pvt Ltd v. Collector — 2003 (151) E.L.T. 254 (SC) — Followed [Paras 4, 9, 10]
