Commissioner of Customs (Preventive) Vs Akay Conces Pvt. Ltd. (CESTAT Delhi)
Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi Bench, has ruled that an assessee must pay a redemption fine for seized goods that go missing while in their safe custody under a supardaginama. The Tribunal allowed two appeals filed by the Commissioner of Customs (Preventive), setting aside a portion of an earlier order that had refrained from imposing a redemption fine on such missing goods, stating that the goods’ liability for confiscation does not cease simply because they are no longer physically available due to the custodian’s actions.
The appeals challenged an Order-in-Original dated October 26, 2007, issued by the Commissioner (Adjudication). In that order, the Commissioner had rejected the transaction values declared by M/s Akay Cones Pvt. Ltd. and M/s Intrade Impex Pvt. Ltd. (the respondents), re-determined the values, confirmed duty demands with interest, and imposed penalties. Crucially, while the Commissioner confiscated the seized goods that were physically available and imposed a redemption fine, he did not impose a redemption fine or confiscate the goods that were initially seized, handed over to the respondents for safe custody, but subsequently found missing.
The case originated from intelligence received by the Directorate of Revenue Intelligence (DRI) indicating that M/s Akay Cones Pvt. Ltd. and M/s Intrade Impex Pvt. Ltd., both controlled by Shri H.M. Prabhakar, were involved in significant customs duty evasion. The intelligence suggested that the respondents imported fabrics from manufacturers in the USA and Belgium but obtained invoices from Singapore and Thailand traders for approximately one-third of the actual value. Investigations confirmed this pattern, revealing that while the actual cost from manufacturers was US$ 3 to US$ 3.5 per meter, invoices from traders showed only about US$ 1 per meter.
