2025-VIL-1918-CESTAT-HYD-CU
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CUSTOMS CESTAT Cases

Customs – Sections 72(1)(d) and 114AA of Customs Act, 1962 – Non-accountal of goods – Demand of duty – Appellant/SEZ unit is engaged in import and processing of bulk raw sugar – Based on certain investigations, department felt that there are certain unaccounted goods at godown, which resulted in issuance of show cause notice proposing demand of duty – Adjudicating authority confirmed demand of duty and imposed penalties – Whether demand of duty confirmed against Appellant is sustainable – HELD – Entire goods which were stored in warehouse were initially imported duty free by Appellant, therefore, its accountal is necessary and any non-accountal would entail demand of duty. Demand had been made in terms of certain non-accountal of goods, which were brought inside private bonded warehouse, by Appellant to satisfaction of proper officer of Customs. Appellant had given detailed breakup to account for same, which includes loss due to cyclone, rejected goods, clearance to SEZ unit under Ex-Bond Bill of Entry duly acknowledged by SEZ authorities, etc. Reconciliation had not been done properly and this needs to be recalculated keeping in view the amount, which had actually been lost due to cyclone, or exported or ex-bonded and transported to SEZ unit, duly acknowledged, etc. To extent of explained loss due to natural cause, Appellant would be entitled for remission of duty. Entire demand is set aside. Matter is remanded back to Adjudicating Authority to re-determine amount of duty recoverable, if any – Appeal partly allowed - Imposition of penalties – Whether penalties imposed on Appellant under Sections 72(1)(d) and 114AA of the Act are sustainable – HELD – Penalty under Section 72(1)(d) of the Act would depend on having not able to properly account for goods which were initially warehoused. If Appellant is able to explain Into-Bond quantity and Ex-Bond quantity, penalty is not imposable. Unexplained quantity shall be leviable to customs duty in terms of the Act. Penalty under Section 72(1)(d) of the Act will require to be determined after proper reconciliation is done and if any unexplained quantity still remains. Penalty imposed under Section 72(1)(d) of the Act is set aside and remanded for redetermination subject to determination of duty, if any. Since goods have been exported and Appellant being SEZ unit have not claimed any export benefit on said export, penalty imposed under Section 114AA of the Act is not tenable.
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