2026-VIL-1498-CESTAT-MUM-CU
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CUSTOMS CESTAT Cases

Customs - Penalty under Section 117 on voluntary disclosure of import discrepancy - Mens rea and bona fide error - Appellant imported scientific equipment and filed Bill of Entry for goods covered under one invoice - Upon opening consignment appellant discovered additional items corresponding to second invoice inadvertently not mentioned by foreign supplier - Appellant voluntarily informed Customs Authorities within six days of clearance and requested for re assessment to pay differential duty - Department imposed penalty of Rupees Two lakhs under Section 117 - Whether penalty under Section 117 can be imposed when appellant exhibited bona fide error and voluntarily disclosed discrepancy without mens rea - HELD - Appellant volunteered to point out discrepancy and offered to pay differential duty even after Out of Charge was granted showing absence of mens rea or intention to evade payment of duty. Content of appellant's letter to Deputy Commissioner shows clear knowledge of appellant's intention that after verification upon receiving material they came to know they had received material against both orders and wanted to include later received left out invoice in Bill of Entry for re assessment and requested for needful re assessment. There was no trace of proof that Customs Department would have known of such irregularities had it not been pointed out by appellant who also volunteered to rectify mistake by payment of required customs duty for entire consignment - CBIC Directive issued for self assessment clearly directs that penal provision would not be invoked in cases of bona fide errors in self assessment where mens rea or willful intention to evade duty or non compliance of condition cannot be proved. Express penalty provisions under Sections 112 and 114 of Customs Act are available for such contraventions. Penalising the appellant for exhibiting its loyalty to the said State, that to under a provision of law for which express penal provision is available, is unsustainable – The penalty under Section 117 is unsustainable and set aside – The appeal is allowed
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