The Bangalore bench of the Customs , Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed under section 112A of the Customs Act,1962 on the undervaluation of the import of artificial flowers and photo frames on the ground of the absence of corroborative evidence.
N.S. Mahesh, the appellant assessee had imported 475 cartons containing artificial flowers, photo frames, fancy mirrors, etc., and filed a Bill of Entry and the department alleged the undervaluation of goods and issued the show cause notice.
The assessee appealed against the order passed by the adjudicating authority for confirming the penalty of Rs.50,000/- imposed under section 112(a) of the Customs Act.
M. S. Sanjeev Kumar, the counsel for the assessee contended that there was no independent corroborative evidence to reject the transaction value and for imposing a penalty and there was no evidence of contemporaneous import.
Also submitted that without any corroborative evidence, only based on the statements recorded from the importer, Adjudication Authority held that the goods were undervalued and the importer was forced to pay differential duty and penalty for the release of the goods.
K. Vishwanath, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee clearly shows his involvement in alleged illegal import and retraction made by him at a belated stage cannot be considered sufficient to nullify the evidentiary value of the statement recorded under Section 108 of the Customs Act.
The Bench observed that in the case of Gajraj Singh Baid V/s Commissioner of Customs, the court held that when there was nothing against the assessee to allege that he was doing any of the act of omission/commission about the goods under import to render the same liable for confiscation, the penalty imposed by the adjudication authority was unsustainable.
A single-member bench comprising P A Augustian (Judicial) quashed the penalty imposed against the assessee while allowing the appeal filed by the assessee.
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