Fabric Rolls Missing from Taxpayer’s Custody After Legal Seizure: CESTAT Upholds Redemption Fine

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the imposition of a redemption fine on a taxpayer whose fabric rolls went missing after being legally seized and placed in their custody (sufurdari). The customs authorities had seized the goods due to a suspected violation, and while the goods were supposed to be held safely by the assessee pending investigation, they disappeared. The assessee argued that they were not responsible for the loss. However, the tribunal found that as the legal custodian of the seized goods, the taxpayer was responsible for their safekeeping. The failure to produce the goods when required constitutes a serious breach of this responsibility. Consequently, the CESTAT confirmed the redemption fine levied by the customs authorities, which is a penalty imposed in lieu of confiscation when the goods themselves are not available.