2026-VIL-498-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Duty-free import under Target Plus Scheme, Fulfilment of Actual user condition and non-transferability requirement under Notification No. 32/2005-Cus by appellant-Merchant-exporter - Import of goods through high-seas sale and engagement of job workers for processing without endorsement on licenses - Whether the appellants have by complied with the conditions of Notification No. 32/2005-Cus. dated 08.04.2005, issued under the Target Plus Scheme, and whether the duty-free paper and paperboard imported thereunder were utilised in accordance with the actual-user and non-transferability conditions - HELD – The appellants failed to discharge the burden of proving compliance with the actual user and non-transferability conditions under the Target Plus Scheme. The imports through Haldia Port were routed through a non-existent job worker and delivered to an address where the importer did not have any presence, indicating diversion of goods. Similarly, the imports through Chennai Port involved high-seas sale to a third party and routing of goods through purported job workers who were either non-existent or did not have any control over the goods, establishing a pre-arranged mechanism to circumvent the scheme requirements - The failure to endorse the names and addresses of the job workers on the licenses, coupled with the lack of documentary evidence to demonstrate genuine utilization, lead to the conclusion that the goods were diverted in violation of the notification conditions. While the general legal principle is that utilization through job workers constitutes utilization by the importer, the specific facts of the case showed that the goods were not under the control of the license holder. Accordingly, the demand of duty, interest, and penalty under Sections 28 and 114A of the Customs Act, 1962 are upheld. However, the penalty under Section 112 is set aside - The appeals are disposed of
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