Importers escape hefty penalties due to faulty duty demand.

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeal, setting aside the penalties imposed under Section 114A of the Customs Act. The Tribunal determined that such penalties are applicable only when duty is payable. In this instance, the duty was owed by the seller, M/s. BGH Exim Ltd, and had been fully paid and settled through the Settlement Commission. The demand in the show cause notice for joint and several liability on M/s. BGH Exim Ltd and the appellants was deemed legally unsustainable, as duty cannot be demanded in such a manner. Consequently, since the duty was confirmed solely against M/s. BGH Exim Ltd, there was no justification for imposing penalties under Section 114A on the appellants. .....

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