2026-VIL-68-CESTAT-HYD-CU
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CUSTOMS CESTAT Cases

Customs - Related party transaction, Payment of differential duty before issue of SCN - Appellant imported goods from its parent company. The appellant paid customs duty and SVB charges based on the invoice value excluding the C&F charges. However, the appellant later realized that the full value of the imported goods was not declared in the B/E. The appellant immediately deposited the differential duty along with interest before the issuance of the Show Cause Notice. The Department initiated investigation and imposed demands, penalties and confiscation of goods on the appellants - Whether the demand, confiscation and penalties are sustainable against the appellants when the differential duty was paid before the issuance of the SCN – HELD - Since the appellants had deposited the differential duty along with interest even before the issuance of the show cause notice, the demand, confiscation and penalties are not sustainable. Once the differential duty is paid before the issuance of the show cause notice, no show cause notice can be issued. The appellants had voluntarily disclosed the short payment of duty and there was no malafide intention on their part. The information regarding non-payment of duty on two invoices was provided by the appellants himself and if there had been any malafide intention, he would not have disclosed this information - In such fact & circumstances, the demand, confiscation and penalties is not sustainable. The impugned order is set aside and the appeal is allowed
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