Commissioner of Customs Vs Sarang Wadhawan (CESTAT Delhi)
Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in Delhi dismissed the department’s appeal against Sarang Wadhawan, a director of M/s Privilege Airways Private Ltd. The case involved allegations under Section 114AA of the Customs Act, which penalizes knowingly false or incorrect declarations. The department claimed that an aircraft imported for non-scheduled operator services was privately used by directors of Privilege Airways and Housing Development Infrastructure Ltd. However, the Commissioner found no evidence of a false declaration, as the undertaking signed at importation stated the aircraft’s intended use accurately.
The tribunal upheld the Commissioner’s decision, confirming that the aircraft’s use under a tripartite agreement did not violate the Customs Act. Although the aircraft was used by directors, there was no intentional or knowing falsification of declarations at the time of importation. Consequently, the proposed penalty under Section 114AA was deemed unwarranted. The CESTAT emphasized that penalties must be based on proven false statements, not speculative interpretations of later usage.
FULL TEXT OF THE CESTAT DELHI ORDER
The department has challenged the order dated 30.07.2010 passed by the Commissioner that drops the penalty proposed upon Sarang Wadhawan, Director of M/s Privilege Airways Private Ltd. and Managing Director of Housing Development Infrastructure Ltd. under section 114AA of the Customs Act, 19621.
