TaxTMI 
TaxTMI 
TaxTMI 
The Hon'ble CESTAT, Principal bench, New Delhi, in Time Avenue Pvt. Ltd. Versus The Commissioner of Customs (Appeals), New Delhi - 2026 (4) TMI 678 - CESTAT NEW DELHI held that the local purchaser, after the importation, is not liable under section 112(b) of the Customs Act('the act') due to lack of knowledge that the goods were liable to confiscation under Section 111 of the act.
Facts:
- M/s. Time Avenue Pvt. Ltd. ('the appellant') purchases watches from M/s. Richemont India Pvt. Ltd ('the importer') for selling it in the local market. The appellant engaged in the retail sale of those watches. Authorities received the intelligence that certain importers are mis declaring the Retail sale price ('RSP') of the watches at the time of import to evade payments of appropriate customs duties.
- During investigation, the premises of the appellant were also searched, and six watches were seized under a seizure memorandum, and a provisional release order was passed on payment of Rs. 82,250/- and a show Cause Notice ('SCN') was passed.
- Appellant contended that the change in the RSP at the premises of the appellant took place on account of the global change in the price of the watches after the appellant had locally purchased the watches. Also, this change was made without knowledge that the RSP had been declared by the importer at the time of import.
- Order in Original ('OIO') was passed against the appellant with a penalty of Rs. 20,000/. Against the said order, the appeal filed before the Commissioner of Customs (Appeals) was also dismissed ('impugned order'). Hence, it came before this bench.
Issues:
- Whether the appellant is liable to a penalty under section 112(b) of the Act?
Held:
The Hon'ble CESTAT, Principal Bench, New Delhi, in Time Avenue Pvt. Ltd. Versus The Commissioner of Customs (Appeals), New Delhi - 2026 (4) TMI 678 - CESTAT NEW DELHI held as under:
- Noted that the RSP were revised as per the importer's price list, and the appellant was not aware of any duty payment by the importer.
- Observed that, in the absence of any knowledge on the part of the appellant regarding the declaration of RSP at the time of import, penalty could not have been imposed on the appellant under section 112(b) of the Customs Act.
- Also, there is no documentary evidence that may indicate that the appellant had any knowledge of the declaration of RSP at the time of import.
Hence, the impugned order is set aside.
Relevant Provisions:
Section 112: Penalty for improper importation of goods, etc
112(b) Any person who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable.
Our Comments:
The Hon'ble CESTAT Chennai inM/s. Ragavan Paper Process, M/s. Sri Jagadeesh Paper Cutting Works, M/s. Muthukrishnan Agencies Versus Commissioner of Customs, Chennai - 2025 (11) TMI 1738 - CESTAT CHENNAI held that Appellants who is High Sea Sale Sellers (Appellants), had been engaged as Job Workers for which the imported goods had been sent to the premises of the Appellants from the Customs area and been sent back to importer on completion of the process of cutting, cannot be expected to know in advance as to Importer's fraudulent intention when effecting the High Sea Sale. As such, the imposition of penalties under Section 112 (b) cannot be justified in the absence of any evidence to show that the Appellants had aided and abetted the fraud committed by the importer.