ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 13.10.2025
CESTAT Allahabad clarified that the word “or” in Section 114A is disjunctive not interchangeable with “and”
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
In a significant ruling, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Allahabad, has dismissed an appeal filed by the Revenue, affirming the principles laid down by the Karnataka High Court regarding the interpretation of Section 114A of the Customs Act, 1962. This decision reiterates the importance of statutory interpretation and sets a precedent for similar cases in the future. โ
Background of the Case
The case arose from an appeal filed by the Commissioner of Customs, Noida, challenging the non-imposition of penalty on the interest amount under Section 114A of the Customs Act, 1962. โ The respondent, M/s Royal Steel Trading, had imported goods from Malaysia under various Bills of Entry and claimed exemption under the Free Trade Agreement (FTA) based on a Certificate of Origin. โ However, upon verification, the certificate was found to be fake, leading to the issuance of a Show Cause Notice and subsequent adjudication. โ
The adjudicating authority ordered the confiscation of goods valued at Rs. โ 1,03,53,747, imposed a redemption fine of Rs. 8,00,000, confirmed the demand for customs duty of Rs. โ 10,07,937 along with applicable interest, and imposed penalties under Sections 114A and 114AA of the Customs Act. However, no penalty was imposed on the interest amount under Section 114A, which became the subject of the Revenue’s appeal.
Source: CESTAT Allahabad
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