Penalty u/s 114 AA and 112 (a) of Customs Act can't be invoked based on Contradictory Statements: CESTAT [Read Order]

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) of Ahmedabad bench has held that the penalty under section 114 AA and 112 (a) of Customs Act, 1962 can't be invoked based on contradictory statements even in the absence of evidence.

Sunil Garg, the appellant challenged the order of the commissioner (appeals) whereby the Commissioner (Appeals) upheld the penalty imposed by the Adjudicating Authority under section 112 (a) and 114 AA of the Customs Act, 1962. Penalty under section 114AA of the Customs Act is leviable in case of misdeclaration of the value of the imported goods as per the manufacturer’s price lists.

The penalty was imposed in connection with an offence case booked against M/s Rasna Corporation on the charge of misdeclaration of the goods in as much as the imported goods declared as ‘coco husk’ whereas on examination it was found the same as a mixture of co husk and cocoa powder.

The penalty was imposed by relying on the statements of the appellant as well as on the third-party statement of Shri Shekhar Nuruddin Rashid. It was argued that there is a contradiction in the statement of the appellant as well as the third party. Further argued that except for the contradictory statements, there is no independent evidence against the appellant.

A Coram comprising Mr Ramesh Nair Member (Judicial)observed that both statements are contradictory. Further viewed that the witnesses must have been examined/ cross-examined to bring the truth on record to do justice for the imposition of penalty.

While setting aside the impugned order, the Tribunal directed to allow one opportunity to re-consider the whole case of the appellant and after allowing the cross-examination a fresh order needs to be passed.

To Read the full text of the Order CLICK HERE

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