Pranav B Prem

The Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has dismissed the Revenue’s plea seeking a stay on the Commissioner (Appeals)’ order directing the release of exotic birds, animals, vehicles, and cash seized from Chennai-based pet trader R. Kumaresan @ Mukesh. The Tribunal strongly criticized the Customs Department’s prolonged delay in the matter, which resulted in the death of a majority of the seized birds while in government custody.

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Background

The case stems from a 2019 search by the Directorate of Revenue Intelligence (DRI), Chennai Zonal Unit, at Kumaresan’s residence. Based on intelligence inputs regarding the illegal import of exotic wildlife, officials seized 69 exotic birds and animals belonging to 19 different species. In addition, two vehicles, cash, digital devices, documents, and bank balances exceeding ₹1 crore were confiscated.

The Adjudicating Authority ordered absolute confiscation of all seized items and imposed penalties under Sections 112(a), 112(b), and 114AA of the Customs Act, 1962. However, in June 2024, the Commissioner (Appeals), Coimbatore, overturned this decision. It was observed that the seizure was not made at the port of entry, but within the city, amounting to a "town seizure." The appellate authority found that the Department had failed to conclusively prove illegal importation of the wildlife.

Revenue’s Stay Application and Arguments

Challenging the Commissioner (Appeals)’ order, the Revenue filed a stay application before the Tribunal. Represented by Shri Sanjay Kakkar, the Department contended that the seized wildlife constituted “prohibited goods” regardless of CITES classification and insisted that the case was a clear instance of smuggling, supported by voluntary statements and financial transactions. It was also argued that the Commissioner (Appeals) had failed to appreciate critical documentary, oral, and digital evidence.

The Department maintained that the respondent had admitted to smuggling exotic birds sourced from Thailand through a network of carriers, and that there was no requirement under Section 123 of the Customs Act to establish the burden of proof once smuggling was evident. The Department further argued that this was not a case involving tax or duty but of wildlife smuggling, which involved high-value goods and hence fell outside the restrictions of the National Litigation Policy.

Tribunal’s Rejection: No Sufficient Cause for Stay

The Tribunal, comprising Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar, declined to grant a stay on the appellate order. It held that the impugned order was reasoned and did not appear to be arbitrary or perverse. The Tribunal emphasized that a stay application is not the stage to conduct a "mini-trial" to reassess evidence, and that such an exercise must wait for the final hearing of the appeal.

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The Bench found that none of the standard grounds justifying a stay—such as fraud, illegality, or risk to public interest—had been satisfied. The Tribunal observed that despite the Department's assertions, the application failed to present specific and sufficient cause warranting urgent intervention. It further noted that the application did not even prominently raise the issue of CITES violation.

Madras High Court’s Concern Over Custodial Negligence

In W.A. No. 1664 of 2025, the Madras High Court had earlier expressed deep anguish over the death of the majority of the seized birds while they were housed at Arignar Anna Zoological Park, Vandalur. The Court remarked, “Had the litigation been concluded in a timely fashion, it might have ensured that some of the birds and animals seized were alive today.” The High Court emphasized the need for swift adjudication and permitted Kumaresan to approach CESTAT for appropriate relief.

Referring to this, the Tribunal remarked that the delay of over seven years was not just procedural but had caused irreparable harm. The Tribunal relied on the Supreme Court's observations in N. Nagendra Rao & Co. v. State of A.P. and Memon Mahomed Haji Hasam v. State of Bombay, underscoring the government’s responsibility to act as a bailee when property is seized and to preserve it in the same condition until proceedings conclude.

On Maintainability and Procedural Fairness

The Tribunal also addressed the respondent’s oral submissions that the appeal itself was not maintainable due to monetary limits prescribed under the National Litigation Policy. However, it rejected this plea at this stage, stating that such objections must be raised through proper procedural applications and not orally during stay hearings. The Tribunal allowed the respondent the liberty to raise such points later through a Miscellaneous Application.

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Verdict

Ultimately, the Tribunal dismissed the Revenue's stay application, holding that the Department had failed to make out a sufficient case for interim relief. The Tribunal ordered the release of the seized birds, animals, vehicles, cash, and bank balances to Kumaresan as directed in the Commissioner (Appeals)’ order. The application filed by the respondent for release of the goods was allowed, bringing to a close this phase of litigation over the prolonged seizure of exotic wildlife.

Appearance

Shri Sanjay Kakkar, Authorized Representative for the Appellant

Shri A.P. Ravi, Advocate for the Respondent

Cause Title: Commissioner of Customs V. Shri R. Kumaresan @ Mukesh 

Case No: Customs Appeal No. 40796/2024

Coram: Hon’ble Shri M. Ajit Kumar [Member (Technical)], Hon’ble Shri Ajayan T.V [Member (Judicial)]