Tribunal Overturns Absolute Confiscation of Re-exported Goods

CESTAT Mumbai Bench Rules Absolute Confiscation Unsustainable Due to Prior Re-export

In a significant ruling, the Customs Excise and Service Tax Appellate Tribunal (CESTAT) Mumbai West Zonal Bench has set aside an order for absolute confiscation of goods that had already been re-exported prior to the appeal by Revenue. The judgment, delivered on November 20, 2025, by Mr. Ajay Sharma, Member (Judicial), underscores the importance of procedural compliance and the untenability of confiscating goods that are not physically available.

The case revolves around M/s Chemspark India Pvt Ltd., which had imported 1600 Kgs of Zinc Pyrithione and 5000 Kgs of Sodium Coco Ampho Diacetate from China in June 2018. The import required a mandatory permit under the Insecticide Act, 1968, which the appellant did not possess, leading to warehousing of the goods. After failing to obtain the necessary permit, Chemspark sought permission to re-export the goods, a request initially granted by the Adjudicating Authority upon payment of a redemption fine and penalty.

However, the Commissioner of Customs, in an appeal filed by Revenue, ordered the absolute confiscation of the goods, citing them as prohibited under Section 111(d) of the Customs Act, 1962. This decision was contested by Chemspark, which provided evidence that the goods had been re-exported on October 7, 2019, prior to the appeal's filing.

In overturning the Commissioner’s decision, the Tribunal emphasized that goods not available for confiscation cannot be subjected to such orders. The Tribunal noted that the re-export had occurred before the appeal was lodged, rendering the confiscation unsustainable. The judgment reaffirms the principle that confiscation cannot be ordered for goods that have been re-exported and are no longer present within the jurisdiction.

The Tribunal's decision restores the original order allowing redemption for re-export, highlighting procedural adherence and the timely execution of export orders. The ruling is expected to have implications for future cases involving importation compliance and the timing of appeals.

Bottom Line:

Absolute confiscation under Section 111(d) of the Customs Act, 1962 is unsustainable when goods have already been re-exported prior to the filing of the appeal by Revenue.

Statutory provision(s): Customs Act, 1962 Sections 111(d), 125, 112(a)

M/s Chemspark India Pvt Ltd. v. Commissioner of Customs, Nhava Sheva-I, (CESTAT)(Mumbai West Zonal Bench) : Law Finder Doc Id # 2811759