If machinery is seized, the exporter cannot reasonably fulfill export obligations. This makes penalties and confiscation questionable

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....f machinery is seized, the exporter cannot reasonably fulfill export obligations. This makes penalties and confiscation questionable<br>By: - Vivek Jalan<br>Goods and Services Tax - GST<br>Dated:- 11-4-2026<br>The Hon&#39;ble Hyderabad CESTAT in the case of M/s Sri Havisha Hospitality & Infrastructure Ltd., Versus Commissioner of Customs Hyderabad - Customs -&nbsp;2026 (2) TMI 1289 - CESTAT HYDERA....

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....BAD dwelt with The Act of Impossibility for EO under EPCG Licenses, due to seizure of machinery itself. This case is a strong precedent for arguing that impossibility due to government action (seizure) cannot be equated with willful non-compliance. Here are the key pointers: Key Legal Takeaways Act of Impossibility: Courts and tribunals recognize that if machinery is seized, the exporter can....

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....not reasonably fulfill export obligations. This makes penalties and confiscation questionable. Notification 28/97 Condition 3: Duty computation must consider permissible exports already made, and depreciation of capital goods. Ignoring these factors makes the demand unsustainable. Procedural Fairness: Orders passed without hearing the appellant or considering pending requests (extensions, th....

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....ird-party exports, depreciation) are legally vulnerable. Outcome: In such cases, confiscation and penalties are often set aside, and matters remanded for proper re-computation of duty, acknowledging impossibility rather than deliberate default. Compliance Insight for businesses operating under EPCG: Always document external factors (like seizure, market conditions) that prevent fulfillmen....

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....t of obligations. File timely requests for extensions, third-party exports, and depreciation-based duty computation. If penalized, challenge on grounds of natural justice and notification-specific provisions =============<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....