ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 15.06.2025
CESTAT Delhi- Statements Under Section 108 Not Admissible Without 138B Compliance
In a significant ruling dated 6 June 2025, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, set aside a penalty of βΉ20 lakhs imposed on Appellant under Sections 112 and 114 of the Customs Act, 1962. The Tribunal held that the penalty was unjustified as the decision relied solely on inadmissible statements recorded under Section 108 of the Customs Act without following the mandatory procedure under Section 138B.
Background of the Case
The Directorate of Revenue Intelligence (DRI) initiated an investigation into M/s. Sundram Export Pvt. Ltd. and M/s. Netcompware Pvt. Ltd., alleging fraudulent overvaluation of CD-ROMs exported under the Duty Entitlement Pass Book (DEPB) scheme at an inflated FOB value of $19 per piece. This overvaluation allegedly enabled undue credit of DEPB scrips, later used to evade customs duties.
Appellant was accused of facilitating the procurement and sale of these DEPB licenses and was slapped with a βΉ20 lakh penalty, although he was neither an exporter nor an importer.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
Source: CESTAT Delhi
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