2026-VIL-1688-CESTAT-DEL-CU
  1. Home
  2. 2026-VIL-1688-CESTAT-DEL-CU

CUSTOMS CESTAT Cases

Customs – Miscellaneous application for impleadment of Commissioner of Customs (Export) – Revenue filed miscellaneous applications seeking to implead the Commissioner of Customs (Export), ICD, Tughlakabad as respondent in appeals against the order disallowing drawback - Whether separate impleadment is required where the Commissionerate was subsequently bifurcated - HELD - Commissioner of Customs, Tughlakabad is already the respondent. If the Commissionerate has subsequently been bifurcated into Commissioner of Customs (Import) and Commissioner of Customs (Export) and the appeals pertain to exports, the concerned Commissioner will have to take action. There is no need to separately implead the Commissioner of Customs (Export) - The miscellaneous applications are rejected - Customs – Recovery of drawback on exports to Russia under the Rupee payment scheme – Rules 16 and 16A of Customs and Central Excise Duties Drawback Rules, 1995 read with Section 75 of Customs Act, 1962 – Exporter exported readymade garments to Russia through ICDs and claimed drawback, which was paid - DRI investigation showed that the goods never reached Russia and the containers were de-stuffed at Kotka (Finland) or Bandar Abbas (Iran) - Commissioner held that the remittances received through the bank were not sale proceeds of the exports, disallowed the drawback, ordered its recovery with interest and held that the importers had not received the goods - Appellant contended that the export was complete once the goods left the territory of India, that the remittances were received and that the Drawback Rules do not prescribe destination as a condition for drawback - Whether drawback is recoverable because the goods did not reach the destination country and the remittances were not related to the exports - HELD - Under the special arrangement, the remittance in rupees comes to the exporter from the Reserve Bank of India through the exporter's bank, and the Reserve Bank does not make remittances except for Russian exports under the scheme. To accept that the remittances were not relatable to the exports would imply that the Reserve Bank had wrongly remitted the amount, had wrongly set it off against the State loan to Russia, and that the Russian bank had wrongly accepted the set-off. There was no evidence of this, and nothing showed that the Reserve Bank or the exporter's bank was informed or confirmed any wrongful remittance. If the goods were suspected not to have reached Russia, the matter ought to have been referred to the Reserve Bank, and neither the DRI nor the Commissioner can sit in judgment over the remittance - Drawback depends on the nature of the goods and not on the destination. Drawback is payable once export is complete, and as held by the Supreme Court in Sun Industries, export is complete when the goods leave the territorial waters of India and the title passes to the buyer. Even if the goods had not reached Russia but were landed at Bandar Abbas or Kotka, the exporter would still be entitled to drawback - The denial and recovery of drawback cannot be sustained - Customs – Confiscation of goods already exported and penalty under Section 114 – Sections 2(19), 113 and 114 of Customs Act, 1962 – Commissioner held the exported goods liable to confiscation under Section 113(d), (h), (i) and (ia) of the Act, imposed no redemption fine as the goods had already been exported, and imposed penalties under Section 114 on the exporter, its partners, its Vice President and an authorised signatory - Appellants contended that the penalties could not survive once the goods were exported - Whether goods already exported can be held liable to confiscation under Section 113 and whether penalty under Section 114 can be imposed - HELD - Export goods are defined in Section 2(19) as goods which are to be taken out of India to a place outside India. They are not goods which have already been exported. Section 113 provides for confiscation of certain types of export goods but not of exported goods. Once the goods are exported they are no longer under the control of Indian Customs, and during the relevant period the Customs Act did not have extra territorial jurisdiction. Exported goods therefore cannot be held liable to confiscation - Penalty under Section 114 can be imposed only for acts or omissions which render the goods liable to confiscation under Section 113. Since the exported goods cannot be held liable to confiscation, the consequential penalties on all the Appellants cannot be sustained - The confiscation and penalties are set aside, all the appeals are allowed and the impugned order is set aside with consequential relief
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Weekly Summary

VIL Video

GST & Customs updates: Sep'26
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?