CESTAT Delhi: Misdeclaration In Import Bill Of Entry Amounts To Business Transaction, Attracts Penalty Under Section 114AA Of Customs Act
Pranav B Prem
The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that incorrect declarations made in a Bill of Entry attract penalty under Section 114AA of the Customs Act, 1962, as imports and filing of Bills of Entry are “transactions of business” within the meaning of the Act.The Bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) made the observation while upholding penalties imposed on Nitin Khandelwal, Manager of M/s Wide Impex, for his role in misdeclaration and undervaluation of imported goods. The Tribunal was hearing an appeal challenging the order of the Principal Commissioner of Customs (Import), ICD, Tughlakabad, which had imposed a penalty of ₹30 lakh each under Sections 112(a) and 114AA of the Customs Act, 1962.
Facts of the Case
The importer, M/s Wide Impex, had filed a Bill of Entry to clear imported goods and self-assessed the duty payable. Acting on specific intelligence, the department’s Special Intelligence and Investigation Branch (SIIB) examined the goods and found significant discrepancies — some goods were in excess, some were not declared, and the declared values of others appeared unusually low. Samples were sent to the Central Revenue Control Laboratory (CRCL) for testing, and further investigation revealed that the importer had filed another Bill of Entry with similar discrepancies. The actual invoices corresponding to both consignments were found in an Excel sheet retrieved from the appellant’s email account.
During the inquiry, Nitin Khandelwal, the appellant and manager of the importer, appeared before the officers and gave a statement under Section 108 of the Act. He admitted that he used to visit China to place orders on behalf of the firm, and for customs clearance, fake invoices in USD were prepared showing undervalued prices, while the actual invoices in RMB reflected the true transaction value. He voluntarily opened his email account in the presence of SIIB officers and took a printout of the Excel sheet containing the genuine invoice details, signing each page. The data was subsequently used to redetermine the assessable value of the imported goods.
Contentions
The appellant contended that the Excel sheet relied upon by the department was inadmissible as evidence under Section 65B of the Indian Evidence Act. It was argued that only the invoices submitted with the Bills of Entry, and not those reflected in the Excel sheet, should have been considered. The appellant also maintained that there was no misdeclaration and that penalties under Section 114AA could not be imposed in import cases, as the provision was intended for exports.
The Revenue, however, argued that the Excel sheet was retrieved directly from the appellant’s own email account in his presence, printed and signed by him, and thus, its authenticity was unquestionable. It was submitted that the appellant’s actions amounted to clear misdeclaration, and the penalties were fully justified.
Findings of the Tribunal
Rejecting the appellant’s arguments, the Tribunal observed that Section 65B of the Evidence Act deals only with computer-generated records and does not apply to a printout voluntarily produced by an individual from his own email. The Excel sheet, being printed and signed by the appellant himself after accessing his email, was therefore admissible. The Bench also noted that the appellant’s statement contained numerous details — including personal email IDs, business partners, and transaction methods — that were within his exclusive knowledge, leaving no doubt about its voluntariness and credibility.
Addressing the contention that Section 114AA applied only to exports, the Tribunal held: “Section 114AA provides for making, signing or using or causing to be made, signed or used any declaration or statement which is incorrect in the transaction of any business for the purposes of the Customs Act. Imports and filing of Bill of Entry are transactions of business under the Customs Act. Section 114AA would squarely apply to those transactions.” The Bench further clarified that the Standing Committee’s 27th Report, which discussed the background of introducing Section 114AA, did not restrict its application to exports alone. The statutory language covered both import and export transactions.
Holding that the penalties imposed under Sections 112(a) and 114AA were modest in comparison to the total value of the misdeclared goods (over ₹36 crore), the Tribunal refused to interfere with the order of the adjudicating authority. Accordingly, the CESTAT dismissed the appeal and upheld the penalties imposed on Nitin Khandelwal.
Appearance
Counsel for Appellant/ Assessee: Shri Bharat Bhushan and Shri Pratik Kumar
Counsel for Respondent/ Department: Shri Nikhil Mohan Goyal and Shri Rakesh Kumar
Cause Title: Nitin Khandelwal v. Principal Commissioner, Customs
Case No: Customs Appeal No. 50914 Of 2021
Coram: Justice Dilip Gupta (President), P.V. Subba Rao (Technical Member)
