In a notable ruling in the case of Commissioner of Customs vs. R. Kumaresan @ Mukesh, the Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has provided valuable judicial guidance on the legal grounds upon which the Customs Department may seek a stay of an appellate order.
The Bench of Ajayan T.V. (Judicial Member) and M. Ajit Kumar (Technical Mmeber) and Shri emphasized that a stay is not granted as a matter of right, and the Customs Department must show “sufficient cause”supported by cogent reasoning and evidence.
The bench while rejecting the department’s request for a stay of an order that directed the release of seized exotic birds and associated property, enumerated a clear framework of circumstances that could justify granting such interim relief.
Backdrop: Appeal Arising from Exotic Birds Seizure
The matter relates to a 2019 seizure of 69 exotic birds and animals from the residence of Kumaresan in Chennai, allegedly smuggled from Thailand and Myanmar. Though the original authority had ordered absolute confiscation, the Commissioner (Appeals), in June 2024, overturned the order citing lack of conclusive evidence and termed it a “town seizure” rather than one at the point of import.
The department challenged the order and sought a stay on its execution pending appeal, claiming that the evidence established a clear case of smuggling.
The Tribunal then listed specific, illustrative grounds on which the Customs Department can seek a stay. These include:
- Illegal, perverse, or arbitrary order that could cause miscarriage of justice.
- Jurisdictional errors in the impugned order.
- Ignorance of material facts leading to erroneous conclusions.
- Arbitrary or capricious use of discretion by the lower authority.
- Release of goods likely to harm environment/economy/public interest.
- Risk of refund to ‘fly-by-night operators’ with low chance of recovery.
- Balance of convenience being in favour of the applicant.
- Evidence that the order was obtained through fraud.
The Tribunal stressed that stay applications must go beyond “bland statements” and be supported by specific data, legal backing, and demonstrable urgency.
The department primarily relied on general claims of smuggling and referenced appeal grounds. However, the Tribunal found that the Commissioner (Appeals)’s order was reasoned and not prima facie perverse. The evidence was best adjudicated during the final hearing, not at the stay stage. The balance of convenience favoured the respondent, especially since prolonged litigation led to the death of most of the seized birds.
Moreover, the Revenue’s stay application did not rely on any of the indicative legal grounds listed above, weakening its case.
The Tribunal made it clear that stay powers must be exercised with care and should not be used to delay justice or suppress the rightful execution of appellate orders. It also warned against “ambush litigation tactics”, where legal arguments are introduced at the last minute during oral hearings without prior notice.
Case Details
Case Title: Commissioner of Customs Versus Shri R. Kumaresan @ Mukesh
Case No.: Customs Appeal No. 40796/2024
Date: 06.08.2025
Counsel For Appellant: Sanjay Kakkar, Authorized Representative
Counsel For Respondent: A.P. Ravi, Advocate
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