Custom, Excise & Service Tax Tribunal
Allengers Medical Systems Ltd vs Commissioner Of Customs Airport & ... on 5 February, 2026
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.
PRINCIPAL BENCH, COURT NO. I
CUSTOMS APPEAL NO. 51218 OF 2025
[Arising out of the Order-in-Original No. 01/2024-25/ADJ/V.P.S./COMMR/
AIRPORT & GENERAL dated 21/03/2025 passed by Commissioner of
Customs, New Delhi-110037.]
M/s Allengers Medical Systems Ltd. ......Appellant
Bhankarpur, Mubarkarpur Road,
Tehsil - Derabassi - 140 507
Distt. Mohali, Punjab.
Versus
Commissioner of Customs, ....Respondent
New Customs House, Near IGI Airport, New Delhi - 110 037 APPEARANCE:
Shri Rajiv Tuli and Ms. Priya Pandey, Advocates for the appellant.
Shri Rajesh Singh, Authorized Representative for the Department CORAM:
HON'BLE JUSTICE MR. DILIP GUPTA, PRESIDENT HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) FINAL ORDER NO. 50259/2026 DATE OF HEARING/DECISION : 05.02.2026 P.V. SUBBA RAO M/s Allengers Medical Systems Ltd., Mohali, Punjab1 have filed this appeal to assail the order dated 21.3.2025 passed by the Commissioner of Customs (Airport & General), New Delhi deciding the proposals made in the show cause notice dated 6.6.20242 by which he confirmed the demand of differential customs duty of Rs. 57,18,554/- along with interest and appropriated the amounts deposited by the appellant towards duty and interest. He also imposed a penalty of
1. appellant
2. SCN
2 C/51218 OF 2025 Rs.57,18,554/- on the appellant under section 114A of the Customs Act, 19623.
2. The appellant had imported Carbon Fiber Table Tops and Carbon Fiber Tables under various Bills of Entry between 18.8.2022 and 9.3.2023 and self assessed duty claiming the benefit of Notification No. 50/2017-CUS, as amended by Notification No. 2/2022-CUS dated 1.2.2022 (Sl. No. 564). The case of the department is that after the amendment on 1.2.2022, carbon fiber tables imported by the appellant were excluded from the exemption notification.
3. The case of the appellant is that there were two types of carbon fiber tables - Interventional Tables and Diagnostic Tables. Only the diagnostic tables were excluded from the notification after the amendment and it had imported interventional tables which were not excluded from the exemption at all.
4. Learned counsel, however, submitted that even before the SCN was issued, the appellant had paid the duty as demanded with interest with the understanding that the matter will be put to rest. However, the SCN was issued thereafter demanding the duty with interest and also proposing penalties. Learned counsel submits that although it is of the firm belief that it was entitled to the benefit of the notification, the appellant is not pressing the question of
3. Act 3 C/51218 OF 2025 demand of duty and interest and is only praying for the penalty under section 114A to be set aside. He drew attention of the bench to the prayer part of the appeal which is also only for setting aside the penalty.
5. Learned authorized representative for the Revenue, however, vehemently supported the impugned order and asserted that but for the investigation by the department the non-payment of duty would have not come to light. Therefore, the penalty imposed under section 114A is fully justified and needs to be upheld.
6. We have considered the submissions advanced by both sides. We leave the question of eligibility of the exemption notification open as the appellant is not praying for setting aside the demand with interest.
7. The sole question to be answered is, whether, in the facts of the case, the Commissioner was justified in imposing penalty under section 114A of the Act. This section reads as follows:
Section 114A. Penalty for short-levy or non-levy of duty in certain cases. -
Where the duty has not been levied or has been short- levied or the interest has not been charged or paid or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts, the person who is liable to pay the duty or interest, as the case may be, as determined under sub-section (8) of section 28 shall also be liable to pay a penalty equal to the duty or interest so determined:
4 C/51218 OF 2025 Provided that where such duty or interest, as the case may be, as determined under sub-section (8) of section 28 , and the interest payable thereon under section 28AA, is paid within thirty days from the date of the communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-
five per cent of the duty or interest, as the case may be, so determined:
Provided further that the benefit of reduced penalty under the first proviso shall be available subject to the condition that the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso :
Provided also that where the duty or interest determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty or interest as reduced or increased, as the case may be, shall be taken into account:
Provided also that in case where the duty or interest determined to be payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, the benefit of reduced penalty under the first proviso shall be available if the amount of the duty or the interest so increased, along with the interest payable thereon under section 28AA, and twenty-five percent of the consequential increase in penalty have also been paid within thirty days of the communication of the order by which such increase in the duty or interest takes effect :
Provided also that where any penalty has been levied under this section, no penalty shall be levied under section 112 or section 114.
Explanation. - For the removal of doubts, it is hereby declared that -
(i) the provisions of this section shall also apply to cases in which the order determining the duty or interest sub-
section (8) of section 28 relates to notices issued prior to the date on which the Finance Act, 2000 receives the assent of the President;
(ii) any amount paid to the credit of the Central Government prior to the date of communication of the order referred to in the first proviso or the fourth proviso shall be adjusted against the total amount due from such person.
5 C/51218 OF 2025
8. Evidently, penalty under this section can be imposed if non-payment or short payment of duty is by reason of collusion or any wilful mis-statement or suppression of facts. This is not such a case. The appellant self-assessed Bills of Entry as per its understanding that it was eligible to the benefit of the exemption notification. In fact, it is still of that belief but in order to buy peace and settle the matter, it is not pressing for setting aside the demand of duty and interest. The remedy against self-assessment is re-assessment. Self-assessment, even if it is incorrect, cannot by itself, be termed as collusion, wilful mis-statement or suppression of facts. No facts were suppressed or mis-stated by the appellant. The appellant entertained the belief (which it still entertains)that it was eligible to the notification. Viewing it from any angle, the penalty under section 114A of the Act cannot be justified.
9. The appeal is allowed and the impugned order is modified to the extent of setting aside the penalty imposed on the appellant under section 114A. The appellant will be entitled to consequential relief.
(Order dictated and pronounced in open court.) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL) PK