2026-VIL-1027-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs - Confiscation of Goods and Imposition of Redemption Fine - Importer's Bona Fides – Import of crude degummed soya bean oil. Upon discharge, an excess quantity of oil is found in the storage tank which was cleared on payment of duty - Adjudicating authority confiscates the excess goods under Section 111(j), 111(i), and 111(m) of the Customs Act, 1962, with an option to redeem on payment of fine under Section 125, and imposes penalty under Section 114A - Whether goods that remain in the possession of the custodian and are subsequently cleared on payment of duty are liable for confiscation – HELD - The appellant-importer made no attempt to clear the excess goods without payment of duty. The email communication on record establishes that the importer categorically instructed the custodian not to release the tankers until Customs duty was paid for the excess quantity. This demonstrates the bona fides of the importer. The fact that the goods were finally cleared on payment of duty further supports the position that there was no intention to remove goods without payment of duty - The adjudicating authority's finding that the importer and custodian were acting together to remove the goods without payment is factually incorrect and unsustainable in law. The order of confiscation and the consequent imposition of redemption fine are set aside - The appeals are allowedrnrnImposition of Penalty under Section 114A - Absence of Mens Rea - Penalty is imposed on both the importer and custodian under Section 114A of the Customs Act, 1962, on the premise that they had prior knowledge of the excess quantity and acted together to remove it without payment of customs duty - Whether penalty under Section 114A of the Customs Act, 1962, can be imposed where there is no evidence of mens rea or intent to remove goods without payment of duty and the goods are subsequently cleared on payment of duty – HELD - Section 114A is not applicable to the facts and circumstances of the case. The observation of the adjudicating authority regarding collusion between the importer and custodian is factually incorrect. No corroborative evidence exists on record to prove collusion, wilful misstatement, or suppression of facts. The custodian notified the importer of the excess quantity, and the importer immediately instructed the custodian not to release the tankers pending payment of duty. The evidence on record indicates that there is no mens rea on the part of either appellant to clear goods without payment of duty. The adjudicating authority has not made out any case to justify the imposition of penalty under Section 114A. Accordingly, the penalty imposed on the importer under Section 114A is set aside.
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