Case law

Custom, Excise & Service Tax Tribunal · 17 Feb 2026

Mukesh Kumar vs Commissioner Of Customs (Ii), Chennai

Legal principle

Penalties under sections 112(b) and 114AA of the Customs Act can be imposed only where mens rea or active involvement is established, and retracted statements recorded u/s 108 cannot sustain duty demands unless tested through cross-examination in conformity with sections 138B and 138C.

Court decision

The Tribunal set aside Order-in-Original No. 70307/2019 in toto: all importer and CHA appeals were allowed with consequential relief, departmental appeals were dismissed/disposed, value re-determination, extended-period invocation and differential duty demands could not be sustained, and confiscation and redemption fine proposals were dropped as no goods were physically present except the never-cleared Live Bill of Entry. No penalty was imposable on the CHAs under sections 112(b) or 114AA for want of mens rea; appeal C/41721/2019 (Bharath Raj Enterprises) was dismissed as infructuous, and C/41715/2019 (Ajantha KTK Products) was dismissed, post-import RSP tampering being actionable only under central excise or legal metrology laws.

Facts

M/s Nakshatra International Food Co. (NIFCO), proprietor Mukesh Kumar, with his brothers Kamlesh and Naresh Kumar, imported confectionery items (jellies, chocolates, biscuits, juices, coffee etc.) in 566 Bills of Entry between 2008 and 2013 via Chennai and Mumbai ports, allegedly mis-declaring and under-invoicing import price and RSP, mis-classifying three items and making 178 imports under four other IEC codes. DRI seized duty-paid goods worth Rs.1,46,84,431 and hard disks, and recorded statements u/s 108 in which the Kumar brothers admitted under-invoicing (only 35% of value declared for Petra Foods, Singapore supplies, and 50% for others), though Kamlesh Kumar retracted within 24 hours. A SCN dated 10.06.2014 under sections 28 and 124 rejected declared unit values under Rule 12 of CVR 2007, re-determined them under Rule 3(1)/4/9 and revised RSPs on a market survey. The Commissioner's Order-in-Original No. 70307/2019 confirmed the demands, denied the assessee copies of relied documents and cross-examination, and a corrigendum dated 21.10.2019 imposed penalties u/s 112(b) and 114AA on three CHAs (Eskay Logistics, Mohanlal Liladhar Joshi, Concord Zoom).

Key provisions