This Customs Appeal Tribunal allowed an appeal filed by an EOU against a demand for custom duty arising from unauthorized domestic clearances. The court held that the demand raised via a show cause notice in 2022 was barred by limitation as the clearances occurred in 2017-2019.
Impugned order set aside; demand dropped and no penalty imposed.
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CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI
PRINCIPAL BENCH, COURT NO. 2
E-Hearing
Customs Appeal No. 52241 of 2024
[Arising out of Order-IN-Appeal No. 16-RLM-CUS-JPR-2024 dated 12.07.2024 & 29.04.2024 passed by the Commissioner (Appeals) Central Excise & CGST Jaipur,]
M/s Shri Ahimsa Naturals Ltd ......APPELLANT
(Formerly M/s Shri Ahimsa Mines and Minerals Ltd. (100% EOU), R-94, RIICO Industrial Area, Bagru Extn., Bagru Jaipur, Rajasthan 303007
Vs.
Commissioner of Customs(Preventive) .......RESPONDENT
Jodhpur, Hqrs at Jaipur, N C R Building, Statue circle, C-Scheme, Jaipur Rajasthan 302005
Appearance:
Shri Anurag Basu, Advocate for the Appellant Shri Anand Narayan, Authorised Representative for the Respondent
CORAM: HON'BLE MR. ASHOK JINDAL, MEMBER ( JUDICIAL )
FINAL ORDER NO.50403/2026
Date of Hearing :19.03.2026 Date of Decision:19.03.2026
ASHOK JINDAL:
The appellant is in appeal against the impugned order, wherein, demand of custom duty of Rs. 18,02,148/- has been demand from the appellant for domestic clearances made by them without permission.
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Anhydrous Natural for 100% export which was amended from time to time and latest by 21.06.2016. The letter of permission mandates the substantial manufacturing in bonded premises as per CBEC Circular No. 65/2002-C positive Net Foreign Exchange (NFE), and 100% export obligation. The appellant made dutyfree imports of crude caffeine (natural/extracted from tea/coffee) were permitted under Notification 52/2003-Cus, linked to FTP Chapter 6. FTP 2009-14 para 6.08(h) allowed. The appellant cleared caffeine Anhydrous natural during the period 05.10.2017 to 10.01.2019 in domestic tariff area by paying GST and IGST thereon. The appellant before making clearances to DTA also intimated to the Department about their clearances, the proceedings were initiated by DGFT against the appellant for clearance in DTA without permission which were not allowed to be clered in DTA and the DGFT imposed penalty equivalent to 1% total value of goods cleared in DTA and ordered to the Jurisdictional customs/Central Excise/GST authorities to take necessary action from recovery of duty on account of unauthorized clearances of goods in DTA if any and it was also ordered that whether any revenue implication on their clearances in DTA on full payment of duty; it was also held that the authorities are at the liberty to take action against the appellant under any act, rule regulation in force. In view of these observations of the order of DGFT, Development Commissioner a show cause notice dated 08.07.2022 was issued to the appellant to demand custom duty on the imports made by them under
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C/52241/2024 Notification No. 52/2003-Cus. dated 31.03.2003 which were imported by them duty-free and after process, the said goods were cleared in DTA without permission. The matter was adjudicated demand of duty of Rs. 18,02,148/- was confirmed and an amount already paid Rs. 11,40,244/- was appropriated and interest was also demanded, penalty equivalent to demand of duty of Rs. 18,02,148/- was confirmed. Against the said order, the appellant is before me.
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goods imported by them without payment of duty at the time of
clearances.
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But no such permission was granted to the appellant. As the clearance in DTA was well within the knowledge of the Revenue as appellant has intimated all the times and no action was taken against the appellant the only action taken by the authorities
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below against the appellant on imposition of penalty by Development Commissioner. In that circumstances, the show cause notice issued to the appellant on 08.07.2022 is highly time barred, therefore, without going into the merits of the case, I hold that whole of the demand is barred by limitation. Accordingly, the demand against the appellant is dropped and no penalty in imposable on the appellant.
(ASHOK JINDAL) MEMBER ( JUDICIAL )
Kailash
3 issues framed by the court
Whether demand of custom duty raised for clearances in domestic tariff area without permission is barred by limitation.
Whether the show cause notice issued in 2022 is time-barred given clearances occurred in 2017-2019.
Whether the appeal against the adjudication order should succeed on the ground of limitation without deciding merit.
2 provisions across 2 enactments
M/s Shri Ahimsa Naturals Ltd.
Commissioner of Customs(Preventive), Jodhpur, Hqrs at Jaipur
Ashok Jindal
As recorded by the court registry
An appeal in a customs matter before the Customs, Excise and Service Tax Appellate Tribunal.
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