Case Law Details
Nidhi Enterprises Vs Commissioner of Customs (CESTAT Delhi)
CESTAT Delhi held that Penalty under section 114AA is imposable only if knowingly or intentionally a false declaration, statement or document is made, signed or used. As there are no evidences that appellant knew of the fraud/ forged licences, penalty u/s 114AA cannot be sustained.
Facts-
The appellant is in the business of importing and trading paper-based articles. It imported goods under 29 Bills of Entry using various duty-free licences issued by the Directorate General of Foreign Trade to various persons under various export promotion schemes such as Duty-Free Import Authorization, Focus Product Scheme, Focus Market Scheme, Village and Khadi Gramodyog Yojna, and Duty Entitlement Passbook. These licences/ scrips are transferable, and after the exporter fulfils its export obligations under the licence, it can sell them to anyone else who can then import goods against the licence or scrip duty-free.
Usually, the licences or scrip are sold at a discount, say, at 95% of the value of the duty exemption available under the license. For imports under each of the schemes under which the licences or scrip are issued by DGFT, there is a corresponding exemption notification under the Customs Act. Thus, when the licence issued by the DGFT is produced before the customs for clearance, the appropriate value is debited from the licence or scrip, and goods are cleared without the importer paying the duty in cash in terms of the corresponding exemption notification.
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