𝐒 𝐉 𝐄𝐗𝐈𝐌 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬

 “Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 27.03.2025

CESTAT Kolkata- Customs officials’ delayed response (over four years) was unreasonable on SAD exemption

In a significant decision by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata, the Tribunal has set aside an earlier order demanding Rs. 2,83,145 in customs duty, interest, and penalty from M/s Raza International. The appeal was against the demand arising from a dispute over the exemption of Special Additional Duty (SAD) under Notification No. 20/2006-CUS, dated March 1, 2006.

Key Highlights of the Case:

• Import Background: M/s Raza International had imported goods on April 13 and April 28, 2011, claiming SAD exemption under Notification No. 20/2006-CUS.
• Dispute: The customs authorities later argued the exemption ceased effective April 8, 2011, due to an amendment via the Finance Act, 2011.
• Show Cause Notice: Issued on May 25, 2015, nearly four years after import clearance, invoking suppression and demanding the customs duty with penalties and interest.
• Commissioner (Appeals) Decision: Initially dismissed due to non-appearance by the appellant during hearings.
• Tribunal’s Decision: Overturned Commissioner (Appeals)’ order, stating:
  • No suppression by the importer as exemption claims were transparently declared.
  • Customs officials’ delayed response (over four years) was unreasonable.

Final Verdict:

The Tribunal concluded there was no evidence of suppression by M/s Raza International, set aside the duty demand, penalties, and interest, and provided consequential relief.

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Source: CESTAT Kolkata

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