CIT Orders Penalty Over Small Remaining Unpaid Excise Tax Amount

The Court of International Trade on Feb. 16 ordered a cigarette rolling paper importer to pay a $239,946.40 penalty for negligent violations of Section 592 because of $5,296.37 in remaining unpaid excise taxes. Judge Gary Katzmann issued the default judgment against The Token Group after the importer failed to appear in court to dispute the charge that it hadn't paid the full $119,973.20 in excise taxes it originally failed to pay.

Out of that original amount, Token and its surety had in the intervening years paid the vast majority. Only $5,296.37 remained to be paid out of the $119,973.20. Nonetheless, after the importer didn't appear in court, CIT automatically found in favor of the government's request.

“While only $5,296.37 remains in actual lost revenue, the statute contemplates the full amount of the potential duty loss,” CIT said: “two times the lawful duties, taxes, and fees of which the United States is or may be deprived, $119,973.20 in potential excise tax lost.”