CESTAT Chennai Sets Aside Confiscation Of Sanitary Napkin Imports Over Alleged Violations Of BIS Norms

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, has set aside a customs order confiscating sanitary napkin imports worth over ₹2.12 crore. It found that the adjudicating authority failed to properly examine the importer's claim that it qualified as an MSME, along with other contentions on the applicability of BIS compliance norms.

A bench of Judicial Member P. Dinesha and Technical Member Vasa Seshagiri Rao held that the Commissioner's order could not be sustained.

“From a perusal of the impugned order we find that the same is not a speaking order, as directed by the High Court, primarily because the same has not analysed properly the guidance documents on QCO issued by the BIS and the Government mandates that any clarifications should be obtained from the concerned 'line ministry' as the said ministry is supposed to have requisite technical expertise,” the bench ruled.

The dispute relates to two consignments of sanitary napkins, sanitary towels and panty liners imported by Urban Essentials India Pvt. Ltd. from Chinese supplier Kawada (Zhejiang) Sanitary Products Co. Ltd. The goods were declared at an assessable value of about ₹2.12 crore.

Customs authorities alleged that the imported products did not conform to the applicable Indian standards. They also alleged that the products did not bear the mandatory BIS standard mark.

Authorities further alleged that the importer did not possess a valid BIS licence. On this basis, they treated the goods as liable for confiscation.

The commissioner had ordered confiscation of the consignments. He also imposed a redemption fine for re-export and levied penalties.

Urban Essentials challenged the order before CESTAT. It contended that it was a registered MSME engaged in retail trade and that the extended compliance timeline applicable to small enterprises should apply to it.

The importer also argued that the consignments had been shipped in March 2025. It said the relevant import date had to be determined on the basis of bills of lading and shipping documents.

The tribunal found that the adjudicating authority had not properly dealt with these arguments.

“Though the Commissioner in the impugned order refers to all these QCOs, BIS, etc., but has proceeded to pass the order in a mechanical manner without following the guidelines in the QCOs in letter and spirit. We understand that quoting merely QCOs is not at all sufficient, further the same has to be followed in letter and spirit, which is glaringly lacking in the impugned order,” the bench ruled

The tribunal also noted that the importer's MSME claim had not been examined.

“We also find that when the Appellant has contended all along that it is a Micro, Small & Medium Enterprises [MSME]; various benefits as provided under MSMED Act, 2006 are available to it, etc. but apparently the Commissioner has not at all verified these arguments and hence, the impugned order clearly suffers from impropriety as being a non-speaking order,” the bench ruled.

The bench also directed the adjudicating authority to examine the importer's argument on the date of import. It said this issue must be considered strictly in terms of the applicable foreign trade policy, based on bills of lading and shipping documents.

Allowing the appeal by way of remand, the tribunal directed the Commissioner to pass a fresh speaking order within 60 days. It also directed that the importer be given reasonable opportunities of hearing.

For Appellant: Raghavan Ramabadran, D. Santhana Gopalan, S. Ganesh Aravindh 

For Respondent: O.M. Reena, Authorized Representative