2026-VIL-1308-CESTAT-HYD-CU
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CUSTOMS CESTAT Cases

Customs - Liability to confiscation under Section 111(m) and imposition of penalties under Section 112(a) for deliberate undervaluation of imported furniture - Importer provisionally released imported goods under Section 18(1) and subsequently assessment was finalized under Section 18(2) with differential duty paid - Statement of Managing Partner admitting to actual value - Whether goods are liable to confiscation after provisional release and final assessment - HELD - Confiscation is sustainable even after provisional release under Section 18(1) and finalization of assessment under Section 18(2) where deliberate undervaluation is established through reliable documentary and electronic evidence. The recovery of original commercial invoice, electronic records retrieved from laptop and hard disc, corroborating documentary evidence and admission made in statement recorded under Section 108 constitute valid foundation for adjudication. Undervaluation was not detected on basis of suspicion but on reliable evidence clearly disclosing intentional mis-declaration of value with view to evade payment of customs duty. Acceptance of differential duty liability after detection of offence does not obliterate contravention already committed. Payment of duty may be mitigating circumstance in determining quantum of penalty but does not extinguish statutory liability to penalty where contravention is deliberate and supported by cogent evidence – The appeal is dismissed - Whether penalties can be imposed upon both firm and managing partner for same alleged offence – HELD - Section 112(a) imposes personal liability upon any person whose acts or omissions render goods liable to confiscation and where evidence establishes active involvement of Managing Partner in planning, directing or facilitating undervaluation, such partner incurs independent liability. Separate penalty upon Managing Partner is sustainable as his liability flows from his own acts and omissions which contributed to mis-declaration and is not merely vicarious. Therefore, penalties under Section 112(a) upon both firm and Managing Partner are legally sustainable. However, acceptance of differential duty and non-prolongation of litigation on valuation may legitimately be considered for determining whether quantum of penalties calls for marginal reduction but request for complete waiver is not acceptable.
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