Case Law Details
Siddhnath Shipping Vs C C Kandla (CESTAT Ahmedabad)
Duty demand in clandestine clearance unsustainable as no physical movement/ diversion was established
Introduction: In the case of Siddhnath Shipping Vs C C Kandla, the CESTAT Ahmedabad addressed a duty demand issue related to clandestine clearance. The tribunal held that if there is no established physical movement or diversion of goods and the demand is based solely on documents, it cannot be sustained. Duty demands without conclusive evidence are not sustainable.
Analysis: Shri Shailesh B. Bhagat, the proprietor of M/s Siddhnath Shipping, filed a Shipping Bill on behalf of exporter M/s Siddhnath Shipping for the shipment of fancy scarves and fancy dupattas. However, upon examination, it was found that the goods were of inferior quality and the net weight was significantly lower than declared. A show cause notice was issued, demanding customs duty, proposing confiscation of the goods, and imposing penalties.
The case went through multiple appeals and remand proceedings. In the denovo adjudication, the original authority confirmed the customs duty demand, along with interest, and imposed penalties. The appellants approached the CESTAT, challenging the order.
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