CESTAT Sets Aside ₹20,000 Penalty on Time Avenue, Finds No Evidence of Knowledge in RSP Misdeclaration Case

April 9, 2026 : The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has set aside a penalty of ₹20,000 imposed on Time Avenue Pvt. Ltd. under Section 112(b) of the Customs Act, holding that the essential requirement of “knowledge” was not established by the Department.

The dispute arose from Order-in-Appeal dated July 2, 2021, whereby the Commissioner (Appeals) had upheld the penalty imposed by the Joint Commissioner in connection with alleged misdeclaration of retail sale price (RSP) by importers of Swiss-origin branded watches. Time Avenue Pvt. Ltd., a retailer, challenged this order before the Tribunal.

As per the record, the appellant had purchased watches locally from M/s. Richemont India Pvt. Ltd. for resale. During an investigation into alleged RSP misdeclaration by certain importers, the appellant’s premises were searched and six watches were seized. A show cause notice was subsequently issued proposing confiscation of the goods and imposition of penalty under Section 112(b) of the Customs Act.

The appellant contended that it had no involvement in the import process and had purchased the goods through regular commercial invoices on payment of VAT. It argued that the invoices did not contain details of Bills of Entry or the RSP declared at the time of import, and that any revision in price tags was based on updated price lists issued by the importer after purchase.

The Tribunal examined the statutory requirement under Section 112(b), which necessitates that the person penalised must have knowledge or reason to believe that the goods are liable to confiscation. It noted that the Department failed to produce any documentary evidence demonstrating that the appellant had knowledge of the RSP declared at the time of import or of any alleged misdeclaration.

Rejecting the Department’s case, the Tribunal observed that the allegation of knowledge had been merely assumed in the impugned order without supporting material. It also took note of the appellant’s clarification that price revisions were based on importer communications and that it was not privy to import declarations or duty-related aspects.

Concluding that the foundational requirement for invoking Section 112(b) was not satisfied, the Tribunal held that the penalty could not be sustained and set aside the order of the Commissioner (Appeals), allowing the appeal.

Cause Title: Time Avenue Pvt. Ltd. v. Commissioner of Customs (Appeals), New Delhi
Case No.: Customs Appeal No. 51914 of 2021
Coram: Justice Dilip Gupta (President) and Hemambika R. Priya (Member Technical)