The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai has set aside a Rs. 2.44 crore customs duty demand, confiscation orders and penalties imposed by the Commissioner of Customs, Air Cargo Complex, Mumbai, ruling that authorities cannot deny preferential duty benefit under the ASEAN-India Free Trade Agreement (AIFTA) without verifying the authenticity of Certificates of Origin through the prescribed procedure.
The bench comprising Ajay Sharma (Judicial Member) and C.J. Mathew (Technical Member) observed that the de novo adjudicating authority failed to evaluate the submissions as directed by the Tribunal in an earlier round of litigation. Instead, the authority issued a fresh order relying heavily on assumptions and the circumstances of one later shipment.
The case related to ten consignments imported from Thailand between February 2018 and July 2018, where the importer had claimed concessional duty under Notification No. 46/2011-Cus for goods originating from ASEAN member nations. The dispute began after customs officials raised objections in a later consignment, leading the importer to pay duty under protest for that particular shipment. Based on this, customs authorities extended the same reasoning to earlier shipments and issued a show cause notice demanding differential duty along with interest, fine and penalties.
Dr. Sujay Kanawala, the counsel for the appellant submitted that order has grievously erred in expanding the scope of de novo adjudication by fastening a fresh detriment that was not in the order examined by the Tribunal. He drew attention to the confiscation of the imported goods under section 111(o) of Customs Act, 1962 and, notwithstanding the non-availability of the goods, the entailing of redemption fine under section 125 of Customs Act, 1962.
The Tribunal underscored that a party cannot be placed in a worse legal position merely because they exercised their right to appeal, noting that the adjudicating authority improperly introduced a redemption fine, even though the imported goods were not physically available for confiscation.
AIFTA Benefit Cannot Be Denied Without Verification
A crucial part of the Tribunal’s reasoning was that no steps were taken by customs authorities to verify the authenticity of the Certificates of Origin through official channels, even though such verification is mandatory before denying treaty benefits.
The Tribunal noted that there was no finding that the goods did not originate in Thailand. There was no allegation that the Certificates of Origin were forged. There was no comparison or analysis of the product description in the certificates and import documents. Thus, the denial of preferential duty lacked legal basis.
Case Details
Case Title: Marvel Silver Versus Customs Commissioner
Case No.: Customs Appeal No: 86363 Of 2023
Date: 17/09/2025
Counsel For Appellant: Dr. Sujay Kantawala and Ms Aishwarya Kantawala, Advocates
Counsel For Respondent: Krishna Murari Azad, Assistant Commissioner (AR)
Read More: CBIC Issues Clarification on Reversal of Benefits Under Instrument-Based Schemes