CESTAT held that penalties imposed on A1 and A2 under ss. 114...

CESTAT held that penalties imposed on A1 and A2 under ss. 114 and 114AA of the Customs Act, 1962 were unsustainable and set them aside. The Tribunal found no evidence of abetment, knowledge, or mens rea regarding the misdeclaration by the exporter, and noted the absence of any specific finding justifying s. 114AA penalty, indicating non-application of mind. Any misconduct of A1/A2 was held remediable, if at all, only under the then-applicable CHA Regulations (CHALR, 2004), not under the Act. On the Revenue's grievance regarding non-imposition of redemption fine on goods listed in Annexure E to the SCN, CESTAT upheld the adjudicating authority's discretion, noting the goods were not physically available and their status/ownership was unclear. Confiscation and consequent fine under s. 125 were therefore rightly not invoked. Appeals of the appellants were allowed to the extent of penalty; Revenue's challenge was dismissed.

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