Bentley Motors Ltd Vs Commissioner of Customs (CESTAT Delhi)
Conclusion: Penalty of Rs. 20,00,000/- imposed on Bentley Motors Ltd. under section 112 (a) (ii) on the ground that it had abetted mis-declaration value of the cars by Exclusive Motors which rendered such cars liable for confiscation under section 111 (m) was not justified as if Exclusive Motors had undervalued the goods by reflecting the CIF values in the main invoices without including the additional amounts which it had paid through account adjustment based on the supplementary invoices issued by the appellant, no malafide intention was attributed to Bentley Motors Ltd..
Held: Assessee-company was a UK-based exporter that supplied 170 cars to its Indian dealer, Exclusive Motors Pvt. Ltd. The Directorate of Revenue Intelligence investigated the imports and alleged undervaluation, claiming that Exclusive Motors received supplementary invoices from Bentley which were not disclosed in the Bills of Entry. A show cause notice was issued proposing recovery of differential duty, confiscation of cars, and penalties on the dealer, its officers, and Bentley. By an order passed in July 2024, the Commissioner imposed a penalty of Rs. 20 lakh on Bentley under Section 112(a)(ii), holding that the company abetted undervaluation. Assessee argued that Bentley’s role ended with supplying the cars and issuing invoices, including supplementary invoices whenever cars were shipped by air at higher cost. Assessee submitted that these invoices were genuine, shared with Exclusive Motors, and disclosed to investigators. They argued that Bentley had no role in the customs declarations filed in India and could not be blamed for the importer’s omissions. Assessee argued that CESTAT had already set aside penalties on Exclusive Motors and its officers in an earlier order, and the same principle should apply to Bentley. It was held that penalties on Exclusive Motors and its officers had already been set aside in November 2024, which meant the foundation of the penalty on Bentley did not survive. Tribunal also observed that Bentley had produced supplementary invoices, airway bills, and account adjustment records, showing that the transactions were disclosed and not concealed. Tribunal pointed out that Bentley, as an exporter, had no responsibility for declarations made before Indian Customs, and no evidence showed that the company abetted misdeclaration. Tribunal explained that Section 112 required proof of abetment or omission rendering goods liable to confiscation. In this case, no such conduct was attributable to Bentley. The penalty of Rs. 20 lakh was set aside and Bentley’s appeal was allowed.
