Machinery Seizure & EPCG Default: Landmark Ruling by CESTAT Hyderabad Bench

Vivek Jalan | Last updated: 01 May 2026

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A landmark ruling by the Hyderabad CESTAT addresses situations where machinery seizure makes fulfilling Export Promotion Capital Goods (EPCG) license obligations impossible. The tribunal established that government action, like seizure, should not be treated as willful non-compliance. This precedent highlights that penalties and confiscation may be invalid if the exporter couldn't fulfill obligations due to external factors, emphasizing procedural fairness and proper duty computation.

The Hon'ble Hyderabad CESTAT in the case of M/s SRI HAVISHA HOSPITALITY INFRASTRUCTURE LTD Vs COMMISSIONER OF CUSTOMS, HYDERABAD [2026-VIL-371-CESTAT-HYD-CU] 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

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About the Author

Vivek Jalan

DESIGNATED PARTNER

Mr. Vivek Jalan is a FCA, Qualified LL.M (Constitutional Law) and LL.B. He is the Chairman of The Fiscal Affairs and Taxation Committee of The Bengal Chamber of Commerce and Industry. He is the Convenor on Indirect Taxes of the CII- Economic Affairs and Taxation Committee (ER); He is also a visiting faculty for Indirec ... Read more

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