Excel sheet containing parallel invoices in email are admissible in evidence
Tribunal Upholds Penalty for Mis-declaration in Imports Nitin Khandelwal's appeal dismissed; penalties under Customs Act sections 112(a) and 114AA confirmed
In a significant judgment, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi Principal Bench, has dismissed the appeal of Nitin Khandelwal against penalties imposed for mis-declaration and undervaluation in imports. The tribunal upheld the penalties of Rs. 30,00,000 each under sections 112(a) and 114AA of the Customs Act, 1962, affirming that section 114AA applies to both imports and exports.
The case involved the import of goods by M/s Wide Impex, where discrepancies were found between declared values and actual values of goods. The tribunal noted that the appellant, Nitin Khandelwal, as the manager of Wide Impex, was actively involved in the undervaluation scheme. The tribunal found that the appellant had provided false invoices and manipulated the invoicing system, creating a parallel set of invoices to evade customs duty.
In his defense, Khandelwal argued that the tribunal's order was arbitrary and lacked a proper hearing process. He further contested the admissibility of electronic records under section 65B of the Indian Evidence Act, 1872, and challenged the application of section 114AA for imports. However, the tribunal rejected these arguments, clarifying that the evidence was obtained directly from Khandelwal's email account, which he accessed and printed in the presence of customs officers.
The tribunal emphasized the importance of adhering to statutory timelines for adjudication under section 28 of the Customs Act and found that ample opportunity for defense and hearing was provided to the appellant. It also addressed the appellant's retraction of his initial statement, finding no credible alternative explanation for the discrepancies in the invoices.
Ultimately, the tribunal concluded that the penalties were proportionate considering the substantial value of goods involved, which amounted to over Rs. 36 crore. The judgment is a reminder of the stringent measures in place to prevent customs fraud and underscores the applicability of section 114AA to all business transactions under the Customs Act.
Bottom Line:
Penalty imposed under Sections 112(a) and 114AA of Customs Act, 1962 upheld-Section 114AA applies to mis-declaration in imports as well as exports.
Statutory provision(s): Customs Act, 1962 Sections 112(a), 114AA, 28, 139; Indian Evidence Act, 1872 Section 65B
