The CESTAT allowed the appeals and set aside the impugned order...

The CESTAT allowed the appeals and set aside the impugned order insofar as it adjudged confiscation and directed recovery of duty foregone. The Tribunal held that once the licensing authority's records reflect discharge of export obligation, the Customs Department lacks jurisdiction to initiate recovery or confiscation on the basis of purported breach or stock-keeping assumptions unless the licensing authority has annulled the licence or recorded misrepresentation. Consequently the confiscation, ancillary penalties and demands for duties foregone were declared without legal basis and quashed, and any consequential recovery proceedings were remitted or directed to be withdrawn.