Rajesh Khosla Vs Principal Commissioner of Customs (CESTAT Delhi)
NEW DELHI: The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Delhi has set aside a penalty of ₹2 crore imposed on Rajesh Khosla, the former Managing Director of M/s. MMTC-Pamp India Pvt. Ltd., under Section 112(a)(ii) of the Customs Act, 1962. The Tribunal ruled that mere non-disclosure of certain facts without a conscious and deliberate intent to evade customs duty is not sufficient to levy such a penalty.
The appeal was filed by Rajesh Khosla challenging a portion of the order dated December 31, 2022, passed by the Principal Commissioner of Customs, ACC (Import), New Delhi, which had imposed the significant penalty.
Section 112(a)(ii) of the Customs Act deals with penalties for improper importation of goods. It stipulates that any person who, in relation to goods, does or omits to do an act that would render such goods liable to confiscation under Section 111, or abets such an act, shall be liable to a penalty. For dutiable goods, other than prohibited goods, this penalty can be up to 10% of the duty sought to be evaded or ₹5,000, whichever is higher, subject to Section 114A.
The Principal Commissioner had justified the penalty by concluding that Rajesh Khosla was aware that the final payment for goods was determined based on the final quantity and pricing, which occurred much later than the initial customs declaration. The Principal Commissioner held that this critical fact was not disclosed to customs authorities during Khosla’s tenure as Managing Director, thus warranting a penalty.
