The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai has set aside the confiscation of goods and penalties imposed on Akshay Logistics, a licensed public warehouse operator at Nhava Sheva.
The bench of Ajay Sharma (Judicial Member) and C.J. Mathew (Technical Member), found no evidence that the goods were ever removed from the warehouse without permission or that any condition of such permission was violated.
“Unless it was demonstrated that the goods had been removed after bonding, recourse to confiscation for illicit removal is not a legal option,” the bench observed.
The appellant, Akshay Logistics was penalized under Sections 111(j) and 117 of the Customs Act, 1962, following a surprise inspection conducted by customs officials between August 28 and September 5, 2023. Authorities alleged that nine consignments of imported goods worth ₹9.36 crore were found stored outside the designated bonded warehouse area, allegedly breaching warehousing regulations and posing a potential risk to revenue.
These goods, though not owned by the appellant, were in its custody. Customs authorities claimed improper removal and handling of these goods, invoking confiscation and penalties despite the appellant asserting that all movements were made with prior permission and that the goods were fully accounted for.
The Commissioner of Customs (NS-I), Nhava Sheva, had earlier ordered confiscation of the goods under Section 111(j) and imposed a redemption fine and penalty under Sections 112 and 117, citing violations of Public Warehouse Licensing Regulations, 2017 and the Warehouse (Custody and Handling of Goods) Regulations, 2016.
The appellant has challenged the order by contending that the goods were never removed illicitly. All actions taken were in compliance with customs permission. No duty evasion or revenue loss occurred. Any minor infractions had been corrected before the final order.
The tribunal held that temporary storage outside the bonded area, with customs’ knowledge and oversight, does not constitute a breach warranting confiscation, particularly when the goods remained traceable and revenue interests were safeguarded.
On the penalty under Section 117 for minor procedural lapses (like missing signage, camera coverage, or digital signatures), the Tribunal took a lenient view, noting that these deficiencies were rectified swiftly.
“Pettifogging, implicit in penalizing of minor infractions… is not appropriate when the errors were rectified,” the Tribunal noted, criticizing the adjudicating authority for adopting a mechanical approach.
Case Details:
Case Title: Akshay Logistics vs Commissioner of Customs, Nhava Sheva
Appeal No.: Customs Appeal No. 86221 of 2024
Date of Decision: July 7, 2025
Counsel for Appellant: Shri Anurag Mishra and Ms. Sreya Bharati
Counsel for Respondent: Shri D.S. Maan, Joint Commissioner (AR)
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