Penalty for clerical defects in import declaration forms cannot stand without proof of intent to evade tax.

Penalty for defects in import declaration form/Form 38 could not be sustained where the omissions were only clerical, the discrepancy was explained at the seizure stage, and no finding was recorded that the assessee acted deliberately to evade tax. The Tribunal applied prior decisions and held that mere inadequacy in the forms, without proof of intent to evade, is insufficient to justify penalty. Penalty was therefore held unsustainable.

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Issues: Whether penalty could be sustained for deficiencies in the import declaration form/Form 38 in the absence of any finding that the assessee intended to evade tax.

Analysis: The deficiencies noted in the two forms were confined to clerical lapses, one form having particulars left blank and the other being blank. The assessee had explained the discrepancy at the stage of seizure itself. The assessing authority recorded no finding that the omissions were deliberate or intended to evade tax. The Tribunal, relying on prior decisions, held that penalty cannot be justified merely on account of such inadequacies when the element of intent to evade tax is absent.

Conclusion: Penalty was not sustainable in the absence of any finding of intention to evade tax.

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