2026-VIL-1686-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs – Exemption under Sl. No. 368 of Notification No. 12/2012-Cus. dated 17.03.2012 – Electronic paver finisher (with sensor device) for laying bituminous pavement 7 m size and above, List 16 – Appellant imported electronic sensor pavers and claimed nil duty - On investigation, physical verification showed that the machine had a basic paving width which could be extended only up to 5 m, and wider paving was possible only with bolt-on extensions - Commissioner denied the exemption and confirmed the demand with interest and penalties - Appellant contended that the purchase order was for pavers laying bituminous pavement up to 9 m width, that the extensions were supplied along with the machine, and that it is the capability to pave that determines eligibility - Whether the imported pavers, which could lay pavement only up to 5 m without bolt-on extensions, qualify for the exemption - HELD - The proforma invoice did not describe any supply of accessories for extending the machine along with it, and the panchnama showed that the machine had a minimum paving width extendable only up to 5 m with no additional member connected. The Notification covers an electronic paver finisher for laying bituminous pavement of 7 m size and above, which is to be read without attachments that increase or extend its capacity. If the intention was to give the benefit wherever the minimum capacity is extended using extensions, the Notification would have said so, and words cannot be inserted into it - The burden is on the assessee to prove compliance with the conditions of an exemption notification, as held by the Supreme Court in Dilip Kumar & Company. For the purpose of duty, the item as presented at the time of importation is relevant, and any variance between the purchase order and the goods received has to be flagged at the first opportunity and is a matter between the parties. The Madras High Court decision in PNC Infratech remitted the matter without a specific prayer being made, and does not call for a contrary finding - What reached the Indian territory upon import is relevant, and the denial of the Notification benefit is in order - Customs – Extended period of limitation under Section 28 of Customs Act, 1962 – Misdeclaration in Bill of Entry – Show cause notice was issued invoking the extended period for denial of exemption on pavers - Appellant contended that there was no suppression or misdeclaration, that the documents were examined before clearance, and that the extended period cannot be invoked where conflicting decisions existed on the issue - Revenue contended that the description in the Bill of Entry did not indicate the built-in paving width of the machine or the need for external additions - Whether the extended period of limitation was correctly invoked - HELD - There is a serious lapse in the description in the Bill of Entry, which did not specifically mention the capability of the machine. Any dispute between the Appellant and its supplier is purely between the parties, and the Department is interested only in what was imported as reflected in the documents - There is clear misdeclaration, and the extended period of limitation has been correctly invoked. The order against the company is upheld and its appeal is dismissed - Customs – Personal penalty on Director under Section 112(a) of Customs Act, 1962 – Penalty was imposed on the Director of the importer-company for the alleged misdeclaration in respect of the imported pavers - Whether the penalty on the Director is sustainable in the absence of a specific allegation regarding his role - HELD - There is no specific allegation against the Director as to his role in the misdeclaration. The impugned order contains no specific discussion as to how any act or omission on the part of the Director resulted in the misdeclaration - The personal penalty on the Director is unsustainable and is deleted, and his appeal is partly allowed
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GST & Customs updates: Sep'26
By CA Vivek Jalan

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