The Delhi bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that penalty under section 114AA of Customs Act applicable prospectively and not retrospectively.

The bench of Justice Dilip Gupta (President) and P. V. Subba Rao (Technical Member) has observed that section 114AA of Customs Act was introduced effective from 13.7.2006. Evidently, if any person knowingly made or used any false material in any document after this date, it would attract this section. The Bill of Entry and all the documents with it were filed on 26.6.2003 when this section was not in the statute. There is nothing in this section which suggests that it has retrospective effect. Unless otherwise indicated, all laws will only apply prospectively. Therefore, Section 114AA would not apply to this case. Although this plea was not taken before at any stage, this being a legal ground, must be allowed. The penalty under section 114AA, therefore, needs to be set aside.

The appellant filed Bill of Entry. Based on an investigation, a Show Cause Notice was issued to the appellant proposing recovery of differential duty, confiscation of goods and imposition of redemption fine under section 125 of the Customs Act, 1962 and penalties under sections 112(a) and 114AA of the Act. 

These proposals were initially confirmed by the Commissioner through his Order. On appeal, the Tribunal, by Final Order partly allowed the appeal and remanded the matter to the Commissioner to re-quantify duties and then decide the penalties. 

The tribunal has set aside the penalty imposed under section 114AA. Penalty imposed under section 112(a) is reduced to Rs.5,00,000/-.

Case Details

Case Title: Indusind Media And Communications Limited Versus Principal Commissioner, Customs- New Delhi (Acc Import)

Case No.: CUSTOMS APPEAL NO. 50229 OF 2020

Date: 19/05/2025

Counsel For Appellant: Ranjeet Mahtani

Counsel For Respondent: Girijesh Kumar

Read More: Service Tax Exemption For Services Valued Upto Rs. 10 Lakh Annually: CESTAT