ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 13.09.2025
CESTAT Delhi- The mandatory procedure under Section 138B of the Customs act was not followed by the Customs β β
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 landmark decision, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has set aside a penalty of Rs. 25 lakhs imposed on Appellant, the former Managing Director of M/s Safetag International, under Section 114 of the Customs Act, 1962. β This judgment highlights the importance of adhering to procedural safeguards under Section 138B of the Customs Act when relying on statements recorded during investigations. β
Background of the Case
The case originated from allegations that M/s Safetag International fraudulently availed duty drawback of Rs. β 1,03,67,746/- by inflating the value of exported goods and failing to deliver them to the declared destination, Russia. β Following investigations by the Directorate of Revenue Intelligence, a show cause notice was issued to seven noticees, including Appellant. β The Adjudicating Authority imposed penalties on M/s Safetag International and its Managing Director, Appellant, citing his alleged involvement in the fraudulent scheme.
Source: CESTAT Delhi
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