Over low heat, gently boil sugar in a saucepan until it melts completely and turns golden brown in colour. Then add in Water (1/4 cup) and Margarine (180 gram) into the caramel.
Continue to cook, stirring till mixture thickens. Then, set aside and allow syrup to cool.
Place the Granulated Sugar (250 gram), All-Purpose Flour (280 gram), Baking Soda (2 1/4 teaspoon), and Custard Powder (2 1/2 teaspoon) together and sieve into a bowl. Set aside while you prepare the wet ingredients.
Beat Large Egg (3) with a whisk. Then pour in Milk (2/3 cup) and add Vanilla Essence (1 teaspoon). Stir well till combined.
Start by making the batter. First, mix in cooled caramel into the WET egg mixture. Then mix in the DRY flour mixture. Continue to add alternately in 3 batches until a smooth batter is formed.
Strain the batter into a measuring cup for easier pouring into cupcake moulds.
Pour batter into silicone or plastic moulds till 3/4 full. Arrange in steamer and steam over HIGH HEAT for 15 to 20 minutes.
Remove the steamed cupcakes from steamer and leave to slightly cool on wire rack. Then unmould from silicone moulds and steamed caramel cupcakes are ready to be served.