Commissioner of Customs (Preventive) Vs Akay Cones Pvt. Ltd (CESTAT Delhi)
In a significant ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Delhi, has asserted that goods legally seized by customs authorities remain liable for confiscation and redemption fine, even if they subsequently go missing from the taxpayer’s custody. The decision, handed down on June 6, 2025, overturned a part of an earlier order by the Commissioner (Adjudication) that had absolved M/s Akay Cones Pvt. Ltd. and M/s Intrade Impex Pvt. Ltd. from paying a redemption fine on fabric rolls that disappeared while under their safe custody following a customs seizure.
The case, officially titled Commissioner of Customs (Preventive) Vs Akay Cones Pvt. Ltd., centered on a dispute over the accountability for goods entrusted to the respondents under a supardaginama, a legal instrument for provisional custody.
Background of the Investigation
The Directorate of Revenue Intelligence (DRI) initiated an investigation following intelligence reports indicating large-scale customs duty evasion by M/s Akay Cones Pvt. Ltd. and M/s Intrade Impex Pvt. Ltd. Both entities were reportedly owned and controlled by Mr. H.M. Prabhakar. The intelligence suggested that the companies were importing fabrics from manufacturers such as M/s Microfibre Inc., M/s Culp Inc. USA, and M/s Microfibres Belgium. To evade customs duty, they allegedly obtained invoices for approximately one-third of the actual value from traders based in Singapore and Thailand.
