Material Evidence Showing Complicit and Active Involvement in Evasion of Customs Duty: Delhi HC upholds Penalty under Customs Act [Read Order]

The Delhi High Court upheld the penalty under the Customs Act, 1962 as there was material evidence showing the complicit and active involvement of the assessee in evasion of customs duty

The petitioner, Ajay Sagar is constrained to approach the Court since Section 129E of the Act no longer incorporates a provision which may be invoked by either the Commissioner (Appeals) Customs and Central Excise or the Customs, Excise & Service Tax Appellate Tribunal to waive the condition of pre-deposit in case of undue hardship.

Section 129E of the Customs Act as it stood before its amendment by Finance Act (No .2) of 2014 had conferred a discretion on the Commissioner (Appeals) as well as the CESTAT to dispense with the deposit liable to be made for an assessee pursuing an appeal where it was found that the deposit of duty, interest or penalty levied would cause undue hardship. 

Mr. Gandhi, counsel for the petitioner had contended that notwithstanding the deletion of that provision from Section 129E of the Act, the Court by its constitutional powers would still be entitled to waive the condition of a pre-deposit in appropriate cases.

A division bench comprising Justice Yashwant Varma and Justice Dharmesh Sharma observed that “the respondents had found that the petitioner was complicit and actively involved in the evasion of duty and the intent of these parties to mis-declare imports while acting in concert. Bearing in mind the material which has been relied upon and the nature of the allegations levelled against the petitioner, we find ourselves unable to hold that his case would fall in the category of rare and exceptional cases.”

“Prima facie, and solely to examine whether a waiver is merited, we have delved through the relevant record and find that the conclusions drawn by the respondents insofar as the petitioner is concerned can neither be said to be wholly perverse nor unsustainable. We thus find that the circumstances do not warrant the invocation of the extraordinary power conferred by Article 226 of the Constitution.”, the court held while dismissing the petition.

To Read the full text of the Order CLICK HERE

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