Supreme Court Leaves Open Question Whether Customs Can Seize Goods Which Left Port
The Supreme Court recently refused to entertain an appeal against the Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”) view that once goods are cleared from the port, customs authorities lose their power to confiscate them for violations such as non-compliance with license requirements. However, the bench of Justices Manoj Misra and Ujjal Bhuyan left open the question...
The Supreme Court recently refused to entertain an appeal against the Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”) view that once goods are cleared from the port, customs authorities lose their power to confiscate them for violations such as non-compliance with license requirements.
However, the bench of Justices Manoj Misra and Ujjal Bhuyan left open the question whether the Customs Authorities would have a right to confiscate the goods after they had left the Port
The dispute arose when customs authorities intercepted postal parcels containing intraocular lenses (IOLs) imported by Respondent Epsilon Eye Care in 2022. The Department alleged undervaluation and a lack of a valid import license, leading to a demand of over ₹10 crores.
In April 2025, the CESTAT ruled against the Department, quashing the entire demand. The Tribunal had particularly faulted the Department's valuation method and its attempt to confiscate goods that had already entered the domestic market after being cleared from the port.
After finding that, on the date of the adjudication, the Respondent-importer held a valid license, the Court shielded the Respondent from the payment of the duty, but explicitly kept open a crucial legal question concerning the powers of customs authorities after it leaves the port, leaving a window open for future litigation on the issue.
The appeal was dismissed.
Cause Title: COMMISSIONER OF CUSTOMS, AIRPORT SPECIAL CARGO VERSUS EPSILON EYE CARE PVT. LTD.