Assumed Suppression of Material Facts cannot Allege Intention to Evade Tax: CESTAT Held Goods not Liable for Confiscation or Penalties [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi Bench, ruled against the order of the Principal Commissioner of Customs ACC observing that assumed suppression of material facts cannot allege intention to evade tax. CESTAT held that the subject goods were not liable for confiscation or penalties and allowed the appeal in favour of Myntra Jabong India Pvt Ltd.

The appellant, Myntra Jabong, imports consumer fashion and lifestyle products. From July 2017 to November 2023, it paid customs duty for imports amounting to Rs. 800 crores. The Men’s Polyster Knitted Jackets are the subject matter in present appeal.

Upon examination by the Customs (Preventive) Commissionerate, it was alleged that the appellant had not disclosed the actual description and classification and this was wilfully suppressed with an intent to evade payment of duty. Three show cause notices were issued which also proposed confiscation of goods under Section 111(m) of the Customs Act and imposition of penalty under Section 114A.

The appellant contends that the description of goods in the Bills of Entries were based on the description mentioned in the invoices and packing list provided by the overseas supplier. The tribunal observes that the classification of goods is a matter of belief and it cannot be said that facts have been suppressed.

The tribunal accepted the submission of the Commissioner that it is a simple case of mis-declaration and the goods could not be held liable for confiscation. CESTAT also made reference to M/s. Raydean Industries v. Commissioner CGST, Jaipur. Finally, it was said that it cannot be alleged that there was any intention on the part of the appellant to evade payment of customs duty, even if it is assumed that there was suppression of material facts in the Bills of Entry.

In such a case, as has been previously held, that the goods could not be held liable to confiscation and penalty could not be imposed under Section 114A. The bench, comprising Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member), set aside the order passed by the Principal Commissioner and allowed the appeal.

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