Case law
Judgments from CESTAT, the High Courts and the Supreme Court, each summarised and linked to the provisions it applies.
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Custom, Excise & Service Tax Tribunal · 16 Dec 2025
Commissioner Of Customs - Chennai Ii… vs Hyundai Motor India Pvt Ltd
Legal principle
Ex post facto approval by DGFT ratifying installation of EPCG capital goods at a supporting manufacturer's premises cures the initial breach of the exemption condition, and a duty demand is premature where the export obligation period has not expired, with confiscation under Section 111(o) plus redemption under Section 125 meeting the ends of justice absent prohibition.
Court decision
The Tribunal upheld the Order-in-Original in toto, dismissed the Revenue's appeal as devoid of merits, and disposed of the cross objections, while rejecting the Respondent's limitation plea on the ground that the bond obligation remained live until an Export Obligation Discharge Certificate was obtained.
Facts
M/s. Hyundai Motor India Ltd. imported capital goods under the EPCG Scheme between 2007 and 2013 availing concessional duty under exemptions notifications (e.g., 55/2003-Cus) conditioned on installation at premises of supporting manufacturers approved/endorsed by DGFT. A DRI investigation found capital goods diverted to vendors' premises not authorised in the EPCG condition list, prompting a SCN dated 06.06.2015 demanding differential duty with interest (invoking extended limitation), confiscation, and penalties under Sections 112, 114A and 114AA. The Commissioner confirmed duty of only Rs.2,94,363 against one vendor import (EPCG licence 430004769), confiscated goods valued at Rs.5,73,50,976 found at 16 unapproved vendor premises under Section 111(o) with redemption under Section 125(1) on a Rs.10 lakh fine, imposed penalties on HMIL and two employees, and dropped charges where post-facto DGFT approvals existed and for air-cargo imports. The Revenue appealed, and HMIL filed cross objections.
Key provisions
- Section 112, Customs Act, 1962 — Penalty for improper importation of goods
- Section 111(o), Customs Act, 1962 — Confiscation of improperly imported goods etc
- Section 114AA, Customs Act, 1962 — Penalty for use of false and incorrect material
- Section 5, The Foreign Trade (Development and Regulation) Act, 1992 — Foreign Trade Policy.
- Section 125(1), Customs Act, 1962 — Option to pay fine in lieu of confiscation
- Section 6, The Foreign Trade (Development and Regulation) Act, 1992 — Appointment of Director General and his functions.
- Section 28AB, Customs Act, 1962 — [Omitted] ****