CESTAT Allahabad Quashes Confiscation of Dry Dates for Lack of Proof of Foreign Origin

Nitin Trading Company Vs Commissioner of Customs (CESTAT Allahabad)

In Nitin Trading Company vs. Commissioner of Customs (Final Order dated 25.09.2025), the CESTAT Allahabad set aside the confiscation and penalties imposed on 2,100 kilograms of dry dates valued at ₹4.2 lakh, ruling that the Department had failed to substantiate its claim that the goods were of foreign origin and illegally imported.

The case originated from a search conducted by Customs (Preventive) Commissionerate, Lucknow, on 18 November 2019, at M/s Chandra Cold Storage, where 42 bags of dry dates belonging to M/s Nitin Trading Company were found. The goods were detained under Section 110 of the Customs Act, 1962, and later seized on suspicion of being foreign-origin dry dates imported in violation of Sections 7(1)(c) and 11 of the Act read with Notification No. 63/94-Cus (NT). The suspicion was primarily based on the visual inspection and written opinion of two local traders, who claimed the goods “appeared to be of foreign origin.”

During investigation, Nitin Trading Company submitted purchase documents, including Invoice No. JE/NT/004 dated 04.09.2019 issued by M/s Jainam Exports Pvt. Ltd., and an accompanying e-way bill. Proprietor Shri Nitin Agrawal stated that the goods were lawfully purchased from the Mumbai-based supplier and supported this with bank payment details. However, upon inquiry, the purported supplier, M/s Jainam Exports Pvt. Ltd., denied any transaction with Nitin Trading Company. Its proprietor admitted that the invoice and e-way bill were generated by another individual, Shri Anand Mohnani, using their company’s Importer Exporter Code (IEC) credentials under a separate arrangement.

Despite the confusion, Customs proceeded with adjudication, ordering confiscation of the goods under Section 111(b) of the Act and imposing a redemption fine of ₹1.05 lakh, which had already been deposited. Penalties of ₹25,000 each were imposed on Nitin Trading Company, M/s Jainam Exports Pvt. Ltd., Al Saaj General Trading LLC (Dubai), the transport operator, and the cold storage facility, under Section 112(b) of the Act. The Commissioner (Appeals) subsequently upheld the order, leading to the present appeal before the Tribunal.

The Tribunal, after examining the record, found that there was no conclusive evidence establishing that the seized dry dates were of foreign origin. The testing authority, M/s Atul Rajasthan Date Palms Ltd., had explicitly stated that they lacked the expertise to determine the country of origin. The adjudicating authority had not conducted any further scientific or documentary verification to substantiate the foreign origin claim.

CESTAT held that mere opinions of local traders, based on visual inspection, lacked evidentiary value. Citing the precedent in Orbital Enterprises vs. Collector of Customs, Calcutta [1990 (46) E.L.T. 71 (Tri.-Cal.)], the Tribunal reiterated that subjective assessments based on appearance cannot substitute for tangible or scientific proof when determining the origin of goods.

The Bench also observed that all transactions were supported by invoices, GST e-way bills, and banking records. There was no allegation that these documents were forged or fabricated. In such circumstances, confiscation under Section 111(b) and penalty under Section 112(b) could not be sustained. The adjudicating authority’s findings, being based merely on assumptions and presumptions, failed to meet the evidentiary threshold required under customs law.

The Tribunal emphasized that under Section 112(b), penalty is imposable only if it is established that a person knowingly dealt with goods liable to confiscation. Since no such knowledge or involvement of the appellant was proved, the imposition of penalty and confiscation of goods were unjustified.

Accordingly, CESTAT Allahabad allowed the appeal, setting aside the confiscation, redemption fine, and penalty imposed on Nitin Trading Company. The Tribunal directed consequential relief in accordance with law, reaffirming the principle that confiscation proceedings must be supported by clear, corroborative evidence and cannot rest on conjecture or unverified opinions.

FULL TEXT OF THE CESTAT AHMEDABAD ORDER