Case Note & Summary
The appeal was filed by the Commissioner of Customs (Revenue) against the order of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) which set aside the Order-in-Original passed by the Commissioner of Customs (Adj.), Mumbai. The Commissioner had held that the respondent, M/s. Gaurav Enterprises, had willfully mis-declared goods and wrongly availed the benefit of Notification No. 11/97-Cus dated 1.3.97, and had confirmed the demand of duty and imposed penalty under Section 114A of the Customs Act, 1962. The Tribunal, however, set aside the order on the ground that there was no willful mis-declaration and the extended period of limitation under Section 28 of the Act was not invocable. The Revenue appealed to the High Court on three substantial questions of law: whether the extended period of limitation was rightly invoked; whether the importer was liable for penalty under Section 114A; and whether the Tribunal was right in setting aside the Order-in-Original. The High Court, after hearing both sides, held that the Tribunal's findings were based on appreciation of evidence and did not give rise to any substantial question of law. The court noted that the Revenue failed to establish fraud, collusion, willful mis-statement or suppression of facts to invoke the extended period. Consequently, the penalty under Section 114A also could not be sustained. The appeal was dismissed with no order as to costs.
Headnote
A) Customs Law - Limitation - Extended Period - Section 28 Customs Act, 1962 - Extended period of limitation for recovery of duty not invocable without proof of fraud, collusion, willful mis-statement or suppression of facts - The Revenue failed to establish that the importer had willfully mis-declared the goods - Held that mere mis-declaration without intent to evade duty does not justify invocation of extended period (Paras 2-5). B) Customs Law - Penalty - Section 114A Customs Act, 1962 - Penalty for short-levy due to mis-declaration not automatic - The Tribunal found no willful mis-declaration and set aside penalty - Held that penalty under Section 114A requires mens rea or deliberate act, which was not proved (Paras 2-5). C) Customs Law - Appellate Tribunal - Findings of Fact - Interference by High Court limited to substantial questions of law - The Tribunal's finding that the importer did not willfully mis-declare is a finding of fact based on evidence - Held that no substantial question of law arises for interference (Paras 2-5).
Issue of Consideration
Whether the Commissioner of Customs (Adj.) was right in invoking the extended period of limitation under the Customs Act, 1962 in view of the respondent's mis-declaration for claiming benefits of notification no.11/97 dated 1.3.97; Whether the importer is liable for penalty under Section 114A of the Customs Act when duty was short levied due to mis-declaration; Whether the Tribunal was right in setting aside the Order-in-Original passed by the Commissioner.
Final Decision
Appeal dismissed with no order as to costs. The High Court held that no substantial question of law arises as the Tribunal's findings are based on appreciation of evidence.
Law Points
- Extended period of limitation under Customs Act
- 1962 requires proof of fraud
- collusion
- willful mis-statement or suppression of facts
- Penalty under Section 114A of Customs Act
- 1962 is not automatic upon mis-declaration
- Tribunal's finding of no willful mis-declaration is a finding of fact not to be interfered with
