Legal principle

Equity has no place in the interpretation of a fiscal statute — 'there is no room for any intendment... there is no equity about a tax... nothing is to be read in, nothing is to be implied; one can only look fairly at the language used' — though if the words are genuinely ambiguous, the benefit of interpretation goes to the subject.

Court decision

The Tribunal (S.K. Mohanty, Judicial and Sanjiv Srivastava, Technical) held itself in agreement with the impugned communications dated 27.03.2025 that the appellant's request for grant of licence under Section 58 of the Act read with the PWLR could not be allowed, and dismissed both appeals (Final Order Nos. 70859-70860/2025 dated 12.12.2025) — i.e., in favour of the Revenue/Commissioner. The extract records no separate operative finding on the Section 65/MOOWR permission beyond the rejections contained in the impugned communications themselves.

Facts

M/s Bhagwati Products Ltd applied on 14.12.2024 for private warehouse licences under Section 58 of the Customs Act, 1962 read with the Private Warehousing Licensing Regulations, 2016 (PWLR), together with permission for manufacture and other operations under Section 65 read with the Manufacture and Other Operations (No.2) Regulations, 2019, for two premises at Greater Noida. On scrutiny the department found a confirmed duty demand of Rs 4,45,47,063 under Section 28 read with Rule 8 of the Customs (Import of Goods at Concessional Rate of Duty) Rules, 1996 (OIO 66/Commissioner/DDN/2017 dated 04.10.2017), with an equal penalty of Rs 4,45,47,063 under Section 114A, upheld by the CESTAT (Final Order 50386/2018) and pending before the Supreme Court, besides other pending Central Excise and Income Tax cases. The appellant filed an undertaking (22.01.2025) that it had not been penalized under the Customs Act, and later clarified that Rs 1.05 crore paid under protest had been appropriated, a further Rs 3.39 crore was discharged as customs duty on fresh imports of replacement components, and the penalty could not be treated as final while the Supreme Court appeal was pending. The Principal Commissioner of Customs, Noida, by communications dated 27.03.2025 rejected both applications, and the appellant appealed to the CESTAT Allahabad Regional Bench.

Key provisions

• Section 114A, Customs Act, 1962 — Penalty for short-levy or non-levy of duty in certain cases
• Section 58, Customs Act, 1962 — Licensing of private warehouses
• Section 23, Customs Act, 1962 — Remission of duty on lost, destroyed or abandoned goods
• Section 135, Customs Act, 1962 — Evasion of duty or prohibitions
• Section 132, Customs Act, 1962 —  False declaration, false documents,etc
• Section 114AC, Customs Act, 1962 — Penalty for fraudulent utilisation of input tax credit for claiming refund
• Section 112(a), Customs Act, 1962 — Penalty for improper importation of goods
• Section 123, Customs Act, 1962 — Burden of proof in certain cases
• Section 114AB, Customs Act, 1962 — Penalty for obtaining instrument by fraud
• Section 133, Customs Act, 1962 — Obstruction of officer of customs
• Section 5, Customs Act, 1962 — Powers of officers of customs
• Rule 8, Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 — Recovery of duty in certain case