The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty under section 114AA of the Customs Act,1962 imposed for the confiscation of 12 pieces of gold without any reasonable belief of illegal importation.
Shimul Sarkar, the appellant assessee purchased gold with valid documents from Vicky Jewellery Works Pvt. Ltd. Syakra Para Lane, Bowbazar, and Paul Gold House and Sons, Syakra Para Lane, Bowbazar; and had also purchased the gold biscuits.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the allegations that the purchased gold pieces were smuggled into India and are liable to confiscation under Section 111(b) and 111(d) of the Customs Act and the persons engaged in this case are liable to be prosecuted under Section 135 of the Customs Act and for the imposition of penalty under section 114AA of the Customs Act.
Atika Sumran Ahmed, the counsel for the assessee contended that the assessee cannot be brought under the domain of Section 114AA of the Customs Act which deals with the situation of intentionally making or using declaration statement or documents which was false or incorrect in the transaction of any business for Customs Act.
Also submitted that the Section was intended to penalize situations where there are paper transactions without any actual import or export of goods. In the present case, the department had no case that the transaction was paper transaction only and no goods were imported in the instant case therefore, the penalty imposed under Section 114AA of the Customs Act upon the assessee was not at all warranted.
A.K. Choudhary, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was liable for the penalty imposed under section 114AA of the Customs Act.
The Bench observed that in the case of Jai Balaji Industries –Vs- Commissioner of Customs, the court held that there were practically no ingredients available with the investigating authorities to penalize the assessee under Section 114 AA of the Customs Act and there was no case that the present assessee had done any act which was specified under Section 114AA of the Customs Act and the imposition of penalty was not legally sustainable.
A single-member bench comprising Ashok Jindal (Judicial) quashed the penalty imposed under section 114 AA of the Customs Act against the assessee while allowing the appeal filed by the assessee.
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