ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 21.05.2025
CESTAT Mumbai- Section 114A penalty is not sustainable in absence of culpability
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench, in its final order dated 13th May 2025, allowed the appeal filed by M/s Apar Industries Ltd., quashing a customs duty demand of βΉ71.05 lakhs, redemption fine of βΉ25 lakhs, and penalties imposed under Section 114A of the Customs Act, 1962.
The Tribunal held that DEPB scrips used for imports prior to their cancellation remain valid, and any demand raised after their cancellation cannot retrospectively affect lawful imports.
Background of the Case
- Appellant: M/s Apar Industries Ltd., Mumbai
- Issue: Customs demand and penalty based on use of DEPB scrips alleged to be fraudulently obtained by original holders
- Notification Involved: Customs Exemption Notification No. 34/97-Cus. dated 07.04.1997
- Period of Dispute: Imports during July to November 1998
- Show Cause Notice Issued: 30.09.2002
- Duty Demanded: βΉ71,05,031
- Redemption Fine: βΉ25,00,000
- Penalty Imposed: βΉ25,00,000 under Section 114A
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 Mumbai
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