2026-VIL-126-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Import of raw materials for the manufacture of bulk drugs by drug manufacturers. The raw materials were allowed for warehousing under Section 59 of the Customs Act, 1962, but it was alleged that the original materials were substituted with fake materials by the CHA. The substituted fake material was found to be lying in the customs bonded warehouses pending clearance. Further, it was alleged that the CHA had fabricated the Bills of Entry showing Customs duty endorsement and sent the same to the Importers - Whether the Importers-appellants are liable to pay the entire short levied Customs duty in terms of the proviso to Section 28(1) of the Customs Act, 1962 and are also liable for penalty under Sections 114A/112(a) of the Customs Act, 1962 – HELD - The non-payment of duty has arisen on account of the guilty act of the CHA, and therefore, the CHA alone would be liable to pay the duty under Section 147(3) of the Customs Act, 1962. There is clear evidence that the CHA had exceeded his authority, and in the absence of any evidence to doubt the bona fides of the Importers, the demand of duty and penalties against the Importers cannot be sustained. The importers had made payment of the Customs duty by way of Demand Drafts to their CHA, and the date of presentation of the Demand Draft by the CHA to the Customs authorities would be deemed to be the date on which the Importers had paid the duty. Any further misuse of the said amounts, either by the CHA and/or with the connivance of the Customs officials, cannot result in a demand of duty or penalty on the Importers - The impugned order is set aside and the appeals are allowed
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