2026-VIL-444-MAD-CU
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CUSTOMS High Court Cases

Customs - Import of foreign vehicle by mis-declaring description, value, and origin to avail Customs duty concession - Petitioner declared a 10-seater Cadillac Escalade SUV as an 8-seater, misrepresented the country of origin as Australia instead of USA, and undervalued the goods - Whether the penalty under Section 114AA of the Customs Act, 1962 for use of false and incorrect materials is attracted, and (2) Whether the appropriation of the customs duty already paid is valid. HELD - The show cause notice clearly imputed knowledge to the importer that they had intentionally made and used false and incorrect declaration and documents to evade payment of legitimate customs duty, which is sufficient to attract penalty under Section 114AA. The importer failed to discharge the burden of proving their innocence – The Tribunal has erred in misreading the show cause notice to hold that there is no specific averment of falsification of documents to attract Section 114AA of the Customs Act, 1962. The order of re-export on payment of redemption fine will not absolve the penal consequence envisaged under the Customs Act, 1962. If this proposition of the CESTAT is to be approved, then all illegal importers, if caught, will offer to pay a paltry sum as fine in lieu of redemption of the goods and re-export the same without suffering any penalty or custom duty for their attempt to violate the Customs Act, 1962 - The appropriation of the Customs duty already paid is valid, as the importer is liable to pay the duty even after redeeming the confiscated goods by paying a fine under Section 125 of the Customs Act. The option to re-export the goods does not absolve the penal consequences under the Act. The Tribunal's order setting aside the penalty and appropriation is perverse and contrary to law and set aside – Revenue appeal is allowed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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