Back
CESTAT Allahabad Rules Used to Conceal Imports Can Be Confiscated
The has delivered a significant ruling affirming that can be confiscated when they are used as a cover to smuggle undeclared items into India. The decision came in the case of M/s Ashtvinayak and Company, which had imported a consignment of garments from China, only to find that the packages contained a hidden cache of branded apparel.
The Case of Concealed Brands
The appellant, Ashtvinayak and Company, imported 32 packages of readymade garments from Guangzhou, China, via a Bill of Entry filed on . The declared value was ₹5,51,179, on which customs duty of ₹1,95,556 was paid. However, when customs officers conducted a physical examination on and later a 100% check on , they discovered a gross . Among the declared garments were concealed packages containing branded goods from luxury labels such as Adidas, Nike, Louis Vuitton, Burberry, Gucci, and others. The total value of the undeclared branded goods was ₹4,21,850, with additional undeclared unbranded goods worth ₹76,361.
"We Didn't Order These" – The Importer's Defense
The proprietor, Gaurav Shukla, maintained that he had only ordered unbranded garments and accessories. In his statement recorded under , he claimed the branded items might have been shipped by mistake. He said he placed orders via email but could not produce the email correspondence. He also admitted he had no NOC from the brand owners and had not yet paid for the goods. The department contended that the entire consignment was a deliberate attempt to smuggle high-value branded goods under the guise of cheap garments.
of Both Declared and
The original adjudicating authority ordered of the undeclared branded goods under . It also ordered of the declared garments valued at ₹5,58,126 under , which deals with packages used to conceal goods liable to . An option for redemption was given on payment of a fine of ₹85,000 plus duty. Additionally, a of ₹4 lakh was imposed under .
On appeal, the upheld the order. Before CESTAT, the appellant did not challenge the of the branded goods but argued that the and were excessive.
CESTAT's Reasoning: No Room for Innocence
Technical Member Sanjiv Srivastava, who heard the appeal, rejected the argument that the foreign supplier had made a packing error. The tribunal noted that the appellant could not produce the email placing the order, nor any evidence to establish his
.
"How can the claim may be made by the appellant to be accepted when even after seizure and relinquishment of the total foreign supplier do not make any claim to the said goods?"
the order observed. It further stated that the import was not made in the manner the appellant wanted to impress, and the
were used to conceal large quantities of
sought to be smuggled.
Key Observations from the Judgment
"It is not in dispute that the goods imported by the appellant was accompanied and used forof large quantities ofsought to be smuggled in to India by violating the provisions of Trade Markets and Intellectual Property Laws."
"I do not find much merits in the submission of the appellant."
On the , the tribunal cited the Vaibhav Exports case ( ) where the held that is not essential for imposing under the , as these are .
and Reduced
While upholding the , CESTAT found the of ₹85,000 to be excessive. It reduced the fine to 10% of the declared/assessed value of the goods, i.e., ₹55,812. Similarly, the of ₹4 lakh was reduced to ₹2 lakh, as the original amount was considered too high. With these modifications, the tribunal partly allowed the appeal and upheld the rest of the order.
Implications for Importers
This ruling serves as a strong warning to importers: declaring goods at a low value does not shield them from liability if the consignment is used to conceal prohibited or undeclared items. Even legitimate goods can be confiscated under if they are employed as a cover for . The decision reinforces the principle that ignorance of the contents of a shipment is not a defense, especially when the importer cannot produce evidence of the actual order placed.
