Econship Tech Pvt. Ltd. Vs Commissioner of Customs (CESTAT Chennai)
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeal by way of remand, setting aside the orders confirming customs duty of ₹3,92,28,576, interest, confiscation, redemption fine and penalty for the alleged violation of Notification No. 104/94-Cus. dated 16.03.1994. The Tribunal held that the proceedings suffered from incomplete verification and inadequate examination of the evidence, making the impugned orders unsustainable.
The appellant, a steamer agent and main line operator at Chennai Port, had imported durable containers by availing exemption under Notification No. 104/94-Cus. after executing a continuity bond. The Department alleged that proof of re-export had not been furnished for 6,163 containers and issued a show cause notice proposing recovery of duty, confiscation and penalties. During adjudication, the disputed number of containers was successively reduced to 4,020 and thereafter to 3,886 after exclusion of duplicate entries and other discrepancies. In the de novo proceedings, duty of ₹3,92,28,576, along with interest, redemption fine of ₹1,37,00,000 and penalty of ₹40,00,000, was confirmed and subsequently upheld by the Commissioner (Appeals).
The appellant contended that the entire demand rested on the erroneous assumption that the containers appearing in the departmental compilation had not been re-exported. It submitted that Notification No. 104/94-Cus. grants exemption for temporarily imported durable containers subject to re-export and that the burden lay upon the Department to establish breach of the notification conditions. The appellant argued that vessel-wise records, import and export particulars, reconciliation statements and other supporting documents had been produced, but no comprehensive container-wise verification had been undertaken despite earlier remand directions. It also raised limitation and challenged the confiscation and penalties. During the Tribunal proceedings, the appellant produced a reconciliation statement covering all 3,886 disputed containers, claiming verifiable export records for 3,574 containers, export details for 40 containers shipped through ports other than Chennai, asserting that 22 containers did not belong to it, and seeking an opportunity to produce records for the remaining 250 containers.
