Penalty u/s 112(a)(ii) of Customs Act cannot be imposed on short paid duty: CESTAT

CESTAT rules penalty under Section 112(a)(ii) of Customs Act inapplicable for short-paid duty - The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has clarified that a penalty under Section 112(a)(ii) of the Customs Act, 1962, cannot be imposed for mere short payment of duty unless there is clear evidence of deliberate evasion or fraud. The tribunal emphasized that mens rea (guilty mind) is essential for imposing penalties under this section. Bonafide errors, miscalculations, or classification disputes that lead to duty short-payments, without intent to evade, will not attract this penalty, providing significant relief to importers.