CESTAT Overrules Customs Penalties for G Amphray Laboratories, Declares Confiscation and Penalty Unlawful

Tribunal rules breach of 'pre-import' condition does not warrant confiscation or penalties as per Customs Tariff Act, 1975; Amendment effective only post-August 2024.

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Mumbai West Zonal Bench, in a significant ruling on October 22, 2025, exonerated G Amphray Laboratories from penalties imposed by the Commissioner of Customs (NS-III) for alleged breaches related to 'pre-import' conditions under the Customs Tariff Act, 1975.

In the case of G Amphray Laboratories versus Commissioner of Customs (NS-III), the Tribunal, comprising Mr. C J Mathew and Mr. Ajay Sharma, adjudicated that the confiscation and penalties levied under Sections 111(o) and 114A of the Customs Act, 1962 were unsustainable in law. This decision emanated from the fact that the breach of 'pre-import' conditions did not explicitly attract such consequences under Section 3(12) of the Customs Tariff Act, 1975.

The case revolved around imports valued at over Rs. 54 crore, made by G Amphray Laboratories between October 2017 and December 2018, under the 'advance authorization' scheme, which entailed certain exemptions. The customs authorities had initially imposed penalties and confiscated goods, citing a breach of the 'pre-import' condition. However, the Tribunal highlighted that the amendments to Section 3(12) made by the Finance Act, 2024, which could have authorized such penalties, were prospective and effective only from August 16, 2024.

The Tribunal's judgment draws on precedents, notably the Supreme Court's decision in Union of India v. Cosmo Films Ltd., and the Bombay High Court's ruling in AR Sulphonates Pvt Ltd v. Union of India, which underscored the prospective nature of legislative amendments affecting penalties and interests.

This landmark decision not only quashes the penalties and confiscation imposed on G Amphray Laboratories but also clarifies the legal position on similar cases, ensuring that amendments to statutory provisions cannot be applied retrospectively to impose financial liabilities.

The ruling is expected to have wide-ranging implications for other importers facing similar penalties under the erstwhile provisions of the Customs Tariff Act, 1975, reinforcing the principle that statutory amendments cannot be retroactively enforced to the detriment of taxpayers.

Bottom Line:

Customs Act, 1962 - Section 111(o) and Section 114A - Confiscation and penalty cannot be imposed for breach of 'pre-import' condition under Customs Tariff Act, 1975 as the consequences are not explicitly enumerated in Section 3(12) of Customs Tariff Act, 1975 - Amendment to Section 3(12) effective from 16th August 2024 is prospective and does not apply retrospectively to cases prior to the amendment.

Statutory provision(s): Customs Act, 1962 - Section 111(o), Section 114A; Customs Tariff Act, 1975 - Section 3(12); Circular No. 16/2023-Customs

G Amphray Laboratories v. Commissioner of Customs (NS-III), (CESTAT)(Mumbai West Zonal Bench) : Law Finder Doc Id # 2804457