Ajay Wines & Spirits Vs Principal Commissioner of Customs (CESTAT Chandigarh)
Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Chandigarh has ruled that the cancellation of a public bonded warehouse license for wine stock discrepancies was an overly harsh penalty. While upholding a penalty of Rs. 4 lakhs imposed under Section 117 of the Customs Act, 1962, the Tribunal set aside the Principal Commissioner of Customs, Ludhiana’s decision to revoke the license of Ajay Wines & Spirits.
Background of the Case
The appeal stemmed from an order dated May 21, 2025, issued by the Principal Commissioner of Customs, Ludhiana. The impugned order imposed a penalty of Rs. 4 lakhs on Ajay Wines & Spirits and simultaneously cancelled its Public Bonded Warehouse License, granted under Section 57 of the Customs Act, 1962, on July 27, 2023.
The genesis of the dispute lay in two separate stock verifications conducted at the appellant’s bonded warehouse. The first inspection, carried out on April 4, 2024, revealed a shortage of 339 cases of goods. Significantly, customs duty amounting to Rs. 17.14 lakhs for these specific cases was deposited on April 3 and 4, 2024. The appellant contended that a part of this duty was paid even before the full extent of the shortage was officially detected on April 4, 2024, indicating no pre-meditated intent for illicit removal. It was also noted by the appellant that no “Panchnama” (an official record of inspection witnessed by independent persons) was drawn during this stock verification.
