CESTAT Upholds Penalty for Mis-declaration, Cites Section 114AA Applicability to Import Transactions

CESTAT Upholds Penalty for Mis-declaration, Cites Section 114AA Applicability to Import Transactions

Introduction

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that imports and filing of Bill of Entry are transactions of business under the Customs Act, and Section 114AA would squarely apply to those transactions.

Factual Background

The importer filed a Bill of Entry to clear goods imported by it and self-assessed the duty payable on them. However, the department found discrepancies in the goods, including excess goods, undeclared goods, and undervalued goods. Investigation revealed that the importer had filed another Bill of Entry with incorrect declarations.

Contentions of the Parties

Appellant: Argued that the Excel sheet used to recalculate the duty was not admissible as evidence under Section 65B of the Indian Evidence Act. The appellant claimed that only the values given in the invoices submitted to Customs should be considered.

Respondent: Contended that the appellant had produced the Excel sheet giving the true values of the goods, which should be presumed to be true under Section 139 of the Customs Act.

Reasoning and Analysis

The bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that the Excel sheet was not taken out of any computer, and therefore, Section 65B of the Evidence Act would not apply. The bench noted that Section 114AA provides for penalties for making incorrect declarations in transactions of business under the Customs Act, which includes imports and filing of Bill of Entry.

Decision

The Tribunal dismissed the appeal, upholding the penalty imposed on the appellant for mis-declaration of import value. The bench held that Section 114AA would squarely apply to the transactions in question.

Implications

The decision emphasizes the importance of accurate declarations in import transactions and the applicability of Section 114AA in cases of mis-declaration. The judgment highlights the Tribunal's approach to evaluating evidence and applying relevant provisions of the Customs Act.

In this case the appellant was represented by Mr. Bharat Bhushan and Mr. Pratik Kumar, Advocates. Meanwhile the respondent was represented by Mr. Nikhil Mohan Goyal and Mr. Rakesh Kumar, Advocates.