Custom, Excise & Service Tax Tribunal
Secon Logistics Pvt Ltd vs C. Ludhiana on 17 December, 2025
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
REGIONAL BENCH - COURT NO. I
1. Customs Appeal No. 60251 of 2022
[Arising out of Order-in-Original No. COMMR/VG/LDH/CUSTOMS/02/2022 dated
30.04.2022 passed by the Commissioner of Customs, Ludhiana]
M/s Secon Logistics Private Limited ......Appellant
House No.169, New G K Estate, Mundian Kalan,
Chandigarh Road, Ludhiana, Punjab-141015
VERSUS
Commissioner of Customs, Ludhiana ......Respondent
Customs House, G T Road, Sahnewal,
Sahnewal Khurd, Punjab-141120
WITH
2. Customs Appeal No. 60252 of 2022 [Jatinder Kumar]
3. Customs Appeal No. 60213 of 2022 [Suraj Salaria]
4. Customs Appeal No. 60232 of 2022 [Saurabh Kumar,
Superintendent (Customs)]
5. Customs Appeal No. 60261 of 2022 [Yashpal Goyal,
Proprietor of M/s Goyal Steel Industries]
6. Customs Appeal No. 60262 of 2022 [Rajan Arora, M/s
Sark Enterprises]
7. Customs Appeal No. 60263 of 2022 [Love Sharma]
8. Customs Appeal No. 60264 of 2022 [Sunil Kumar,
Proprietor of M/s KVR Enterprises]
[Arising out of Order-in-Original No. COMMR/VG/LDH/CUSTOMS/02/2022 dated
30.04.2022 passed by the Commissioner of Customs, Ludhiana]
APPEARANCE:
1. Shri Saurabh Kapoor, Ms. Muskaan Gupta, Ms. Muskan Chauhan and
Ms. Tanya Kumar, Advocates for the Appellants in Sl. No. 1 & 2.
2. Shri Sudhir Malhotra, Advocate for the Appellant in Sl. No.3
3. Shri R.K. Hasija and Shri Shivang Puri, Advocates for Appellant in Sl.
No.4.
2 C/60251/2022 & 07 others
4. Shri Gaurav Prakash, Advocate for the Appellants in Sl. No.5,6,7 & 8
Shri Anurag Kumar, Authorized Representative for the Respondent
CORAM: HON'BLE MR. S. S. GARG, MEMBER (JUDICIAL)
HON'BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL)
FINAL ORDER NO. 61771-61778/2025
DATE OF HEARING: 07.10.2025
DATE OF DECISION: 17.12.2025
P. ANJANI KUMAR:
The following Appellants challenge the impugned Order in Original,
dated 30.04.2022, passed by the Commissioner of Customs,
Ludhiana
Appeal No Appellant Remarks Penalty imposed in
All of 2022 Rs/ under Section
60213 Suraj Salaria Inspector of 50,000/117
Customs
60232 Saurabh Superintendent of Do
Kumar Customs
60251 Secon The Custom Broker 20,00,000/ 112
Logistics Pvt 1,80,00,019/114AA
Ltd
60252 Jatinder Director of the 60,00,535/ 114A
Kumar Custom Broker 1,80,00,019/114AA
60261 Yashpal Goyal Proprietor, M/s 4,00,000/117
Goyal Steel
Industries
60262 Rajan Arora Partner cum H-Card Do
holder in M/s Sark
Enterprises
3 C/60251/2022 & 07 others
60263 Love Sharma Authorised Do
Signatory of M/s
Goyal Steel
Industries
60264 Sunil Kumar Proprietor, M/s KVR Do
Enterprises
2. Brief facts of the case are that an intelligence received by DRI,
Ludhiana indicted that dry dates were being imported mis-declaring
the same as Light Melting scrap. A watch was kept. Meanwhile, a bill
of entry No. 2086929, dated 23.12.2020, for import of Light Melting
Scrap in 05 containers, showing the importer as M/s Goyal Steel
Industries, who are said to have purchased on High Seas Sale basis
from M/s Raghav Alloys & Metal, Khanna and showing the supplier to
be M/s SAMA AL Jazeera Auto Used Spare Parts TR. LLC, UAE;
Customs duty of Rs. 594672/- had been paid on 26.12.2020; the
goods were already examined by the Customs Inspector Shri Suraj
Salaria in the in presence of Superintendent Shri Saurabh Kumar and
Shri Baljinder Singh, representative of CHA and was given out of
charge. Another Bill of Entry No. 2103144, dated 24.12.2020,
showing import of Light Melting Scrap in 05 containers, from the
same supplier was also filed.
DRI officers examined 2 out of 5 containers covered by the B/E No.
2086929 dated 23.12.2020 and other 8 containers on dated
12/13.01.2021; it was found that containers were stuffed with dry
dates, packed in white bags, each bag weighing approximately 48-50
Kg.
4 C/60251/2022 & 07 others
2.1. Searches were conducted at various premises of the concerned
persons and statements of various persons were recorded. On
completion of the investigation, officers came to the following
conclusions.
M/s. Goyal Steel Industries, the IEC holder and M/s.
Raghav Alloys the High Sea Seller were found to be non-
existent at declared addresses; none of these consignees of
the imported goods ever got in contact with the Shipping Line
M/s MSC Agency (India) Pvt Ltd;
All the containers were stuffed with dry dates(chohara) and
there was no shred of scrap as declared; the imported goods
were thus mis declared as Light Melting Scrap of Chapter;
Customs Seals of all the containers were intact even though 5
containers were said to have been examined by the officers;
Examination report, put in the EDI system, by Shri Suraj
Salaria, Inspector and Shri Saurabh Kumar, Superintendent,
was bogus.
Shri Yashpal Goyal, Proprietor of M/s Goyal Steel
Industries, in whose name Bill of entry was filed, denied that
he had any knowledge of the import and he was not
concerned in any manner; Neither the High Sea seller i.e. M/s
Raghav Alloys and Metals nor the importer i.e. M/s Goyal
Steel Industries ever got in contact with the Shipping Line M/s
MSC Agency (India) Pvt Ltd;
Shri Yaspal Goyal, Proprietor of M/s Goyal Steel Industries
and Shri Manish Kumar, Proprietor, M/s Raghav Alloys &
Metals denied having appended signatures on the High Sea
5 C/60251/2022 & 07 others
sales documents, Form A etc' Forensic laboratories have
confirmed that the signatures appended on the High Sea
Sales documents, Form-A were of Shri Yaspal Goyal,
Proprietor of M/s Goyal Steel Industries and Shri Manish
Kumar, Proprietor, M/s Raghav Alloys & Metal.
Shri Jatinder Kumar managed the import of the mis
declared cargo; M/s Secon Logistics Pvt Ltd, the Customs
Broker, filed Bills of Entry No. 2086929 dated 23.12.2020 and
No. 2103144 dated 24.12.2020; they are well versed about
the regulations of Customs Broker Licensing Rules, 2018 as
required to before filing any of the consignments. Shri
Jatinder Kumar admitted that he never met Shri Yashpal
Goyal, proprietor of importer firm M/s Goyal Steel Industries;
that he received authorisation in Form 'A', through one Shri
Love Sharma, but he did not know whereabouts of Love
Sharma; that the work order for seal cutting and customs
examination was not signed by him or any one from his
broker firm; that his broking firm were in direct touch with
the Shipping Line to expedite the cargo.
Shri Bodhraj Sharma, Manager of the Custodian Hind
Terminal Private Ltd affirmed that the work order for seal
cutting and Customs Examination was not signed by the
Customs Inspector or Customs Broker; port handling charges
of the containers were given by another Customs Broker i.e.
M/s Sark Enterprises, Delhi through its IDBI bank Account.
All Payments for Customs duty, Shipping Line charges, port
handling charges etc payment were made by Shri Rajan Arora
6 C/60251/2022 & 07 others
either through Sark Enterprises or Sark Cargo Services LLP;
Shri Rajan Arora stated that he did not know Yash Pal or
Manish Kumar or Jatinder Kumar and all payments were
made by him on instructions from one Sunil Kumar,
Proprietor, M/s KVR Enterprises, Ludhiana, who supplied him
with necessary details viz. Bill of Entry No., IEC and port code
required for the payment of the duty.
Shri Love Sharma stated that all details concerning imports
of goods which he passed on to Sunil Kumar, proprietor of
M/s. KVR Enterprises, were provided to him by Shri Jatinder
Kumar; that he knew Shri Yash Pal Goyal, Proprietor of M/s
Goyal Steel Industries; he got signed the High Seas Sale
Agreement and Form-A on the instructions of Jatinder Kumar
and handed them back to Jatinder Kumar; that he brought to
the notice of Shri Yash pal Goyal the fact that dry dates had
been imported in guise of Light Melting Scrap after DRI
booked the case; that he denied knowing Jatinder Kumar or
Sunil Kumar or Manish Kumar or Rajan Arora.
Shri Sunil Kumar confessed that he was paid an amount of
Rs 10,00,000, in his firm M/s KVR Enterprises Bank Account
no 259815450855 on 08.12.2020, through RTGS by M/s
Secon Logistics Pvt Ltd; that on the request made by Jatinder
Kumar, he had directed Shri Rajan Arora of M/s. Sark
Enterprises to make payments to Shipping lines since he
owed to Rs. 10,00,000/- to Shri Jatinder Kumar as an
adjustment as per details provided by Love Sharma on
confirmation with Jatinder Kumar.
7 C/60251/2022 & 07 others
2.2. M/s Goyal Steel Industries filed a writ Petition CWP No.20282 of
2021 in the Hon'ble Punjab & Haryana High Court; it was disposed of
by the Hon'ble Court vide order dated 05.10.2021; in compliance of
the Hon'ble High Court order, Shri Yashpal Goyal, was asked to
appear for hearing on 20.10.2021, vide letter dated 07.10.2021; He
did not appear in person or through any authorised representative;
Shri Saurabh Kapoor, advocate, sent an email on the day of hearing
i.e. 20.10.2021, enclosing Vakalatnama, signed by one Shri Love
Sharma, as per authority letter dated 22.10.2020 of M/s Goyal Steel
Industries. Shri Jatinder Kumar was arrested on 22.01.2021 and
finally granted bail vide order dated 25.03.2021. Shri Jatinder
Kumar filed CWP No. 20282 of 2021 in the Hon'ble High Court of
Punjab & Haryana at Chandigarh, who vide order dated 05.10.2021,
framed three issues and directed the Additional Director General,
Directorate of Revenue Intelligence, Ludhiana to decide all those
three issues by passing a speaking order in accordance with law;
accordingly, a Speaking Order, dated 20.10.2021, was issued by the
Additional Director General, Directorate of Revenue Intelligence.
2.3. It appeared to the Revenue that impugned goods were mis-
declared as Light Melting Scrap whereas the goods were Dry Dates;
the value declared thereof cannot be adapted to different goods and
thus, the value is also mis declared; it appeared that the goods are
rendered liable for confiscation. Further, as no Plant Quarantine
clearance was obtained, it further appeared that the imported dry
dates are liable for confiscation, having been imported in violation of
conditions specified in Plant Quarantine (Regulation of Import in to
8 C/60251/2022 & 07 others
India) Order, 2003. It also appeared that all the persons involved are
liable for penalty under the Provisions of Customs Act, 1962. As the
investigation was in progress and as Show Cause Notice could not be
issued within Six Months, the time period for issuing the Notice was
extended vide letter dated 24.06.2021; On completion of the
Investigation impugned Show Cause Notice, dated 10.11.2021, was
issued as follows.
(i). Shri Jatinder Kumar was called upon to show cause as to why
imported dry dates, should not be classified under CTH 08041030 and
be valued at Rs 1,80,00,019/ and should not be held liable to
confiscation under Section 111 (d), Section 111 (l) and Section 111
(m) of the Customs Act, 1962; as to why differential Customs Duty
amounting to Rs. 60,00,535/, should not be demanded and recovered
from him read under Section 28(4) Customs Act, 1962, along with
applicable interest, in case they are released on payment of fine
under Section 125(2) of the Customs Act, 1962; penalty should not
be imposed upon him under Section 114A and Section 114AA of the
Customs Act, 1962.
(ii). Customs Broker M/s Secon Logistics Pvt Ltd was called upon to
show cause why penalty should not be imposed on them under
Section 112 and Section 114AA of the Customs Act, 1962.
(iii). Shri Yashpal Goyal, Proprietor of M/s Goyal Steel Industries;
Shri Love Sharma; Shri Sunil Kumar, proprietor, M/s KVR Enterprises;
Shri Rajan Arora, Partner cum H-Card holder in M/s Sark Enterprises;
Shri Saurabh Kumar, Superintendent of Customs and Shri Suraj
Salaria, Inspector of Customs were called upon to show cause as to
9 C/60251/2022 & 07 others
why penalty should not be imposed on them under Section 117 of the
Customs Act, 1962.
2.4. The proposals in the Show Cause Notice were confirmed by the
impugned order. Learned Commissioner re-determined the
classification of the impugned goods under CTH 08041030 and value
at Rs 1,80,00,019; confiscated the impugned goods and imposed
penalties on different persons as shown in the Table above.
Submissions on behalf of Shri Jatinder Kumar and M/s Secon
Logistics Pvt Ltd (Appeals Nos. 60251 & 60252 of 2022)
3. Shri Saurabh Kapoor, learned counsel, appearing for Shri Jatinder
Kumar and M/s Secon Logistics Pvt Ltd (Appeals Nos. 60251 & 60252
of 2022), submits that M/s Secon Logistics Pvt Ltd is a Customs
Broker and Shri Jatinder Kumar is the Director of the Company,
looking after the day to day activities on behalf of the Appellant
Company; during the course of business, the Appellant received
documents, like Invoice, Packing List Bills of Lading, High Sea Sales
Agreement as well as Original Copies of Authorization , from the
Importer M/s Goyal Steel Industries through their Authorized
Representative Shri Love Sharma, for customs clearance work in
respect of clearance of "Light Melting Scrap"; importers of "Light
Melting Scrap" need to register themselves with the Director General
of Foreign Trade ( DGFT), on "Steel Importing Monitoring System",
giving all particulars, for each and every import, before filling of the
Bill of Entry and clearance, in terms of Notification No. 17/2015-2020
dated 05.09.2019; the said registration can only be done with the
help of an OTP received on the Phone Number of the Importer; he
submits the relevant Page of the Module and submits that in respect
10 C/60251/2022 & 07 others
of goods imported by M/s Goyal Industries registration was done with
the help of the Digital Signatures and in respect of imports made by
M/s Raghav Industries, the same was done with the help of OTP
received on their registered Mobile Numbers.
4. He submits that the Appellant as Customs Broker had filed the Bills
of Entry, Nos. "2086929 dated 23.12.2020 and 2103144 dated
24.12.2020, on the strength of the documents supplied by Shri Love
Sharma after completion of the process of mandatory registration of
the imports on the portal of ICD-HTPL, Ludhiana; all the import
documents were uploaded on the E Sanchit Portal. He submits that
Classification and Valuation on the basis of the description and other
particulars mentioned on the Import Documents; the imported goods
were accompanied by Pre Inspection Agency", duly authorized in
terms of Para 2.5 of the Handbook of Procedures Foreign Trade Policy
2015-2020; goods imported were duly examined by the Pre
Inspection Agency, who certified that the same comprised of Light
Melting Scrap; photographs were uploaded on the Website of Director
General Foreign Trade (DGFT); after filling the Bills of Entry, goods
were registered at the port of ICD-HTPL and were presented before
the Customs for Physical Examination; it is the duty of the officer of
the Customs to inspect and examine the consignments imported by
the Importers and permit clearance only after due verification; it is
pertinent to note that the goods stuffed in the containers are duly
sealed with the Bottle seals put on the said containers.
5. Learned Counsel submits that in terms of the Customs Broker
Regulations, the appellant Customs Broker is required to ensure that
11 C/60251/2022 & 07 others
the declaration filed at the time of import of any goods is made in
accordance with the provisions of the Customs Act, 1962, Rules made
thereunder and other legal provisions as applicable; the Light Melting
Scrap imported by the Importer was freely importable and as such no
occasion to doubt the contravention of any provisions arises; more
so, the seals were intact and thus, there was no occasion to doubt
the contents of the said container and report the same to the
Customs; goods were not physically examined by the Officers who
had not even broken the Seals; examination report was entered on
EDI Portal and thereafter permitted clearance of goods to the
Importer; since he was not physically present at the Port, he had
instructed his staff to arrange for transportation and loading of the
containers to be dispatched to the importer premises.
6. Learned Counsel submits that only on examination by DRI officers,
it was found that the goods imported and declared as "Light Melting
Scrap" were actually found to be "Dry Dates"; it is pertinent to note
that the Seizure Memo as executed by the Officers of DRI was
addressed to the Importer M/s Goyal Steel Industries and not to the
Appellant or its Director; search of the premises of the Appellant did
not result in finding anything incriminating against the Appellant
pertaining to the alleged imports of Dry Dates in the garb of Light
Melting Scrap; when summons were issued, appellant requested for
some time as the importer was not in touch with them; in his
statement the appellant stated that he was not aware about the
contents of the goods having been imported and about mis-
declaration; work order for seal cutting was not assigned to them as
12 C/60251/2022 & 07 others
CHA; despite the fact that Appellant CHA as well as its Director, had
no role to play in the alleged offence, he was arrested. He submits
that DRI took contradictory stand while opposing his bail on different
occasions; during the course of pendency of Bail Application before
the Learned Trail Court, the DRI Officers took a categorical stand that
both the importers were found to be non-existent; however, DRI
opposed the petition filed by Shri Raghav Garg of M/s Raghav Alloys
& Metals, for anticipatory bail; however, he was neither arrested nor
made a Noticee.
7. Learned Counsel submits further that the entire case is made on
the basis of contradictory statements; Shri Yashpal Goyal stated
initially that he had knowledge regarding import of Scrap and that he
signed the documents; however, at a later stage he changed his
version later, perhaps as dictated by the DRI Officers; DRI Officers
had taken a stand that the firm floated by Shri Manish Kumar did not
exist and that he had left India and shifted to Canada; initially, DRI
chose not to record statement of any person including the Importer,
their Authorized representative in the month of January 2020; Shri
Love Sharma, in his statement dated 26.02.2021, in reply to
Question 10, admitted that the he got the documents for import of
Light Melting Scrap signed by Shri Yashpal Goyal; this establishes the
fact that the entire documentation originated from and was executed
by the importer; Appellant's role was confined merely to filing the
Bills of Entry as a Customs Broker.
8. Learned Counsel submits further that the respondent erred in
placing reliance on the statement of Shri Yashpal Goyal, as he was
13 C/60251/2022 & 07 others
changing his stand; in his statement dated 19.03.2021, he replied (in
reply to Question No. 30) he was aware that his IEC No. AKOPP3397B
was used for import of consignment comprising of Light Melting
Scrap, that he gave(in reply to question No. 7) that he had given
their KYC details to Shri Love Sharma, whom he knew for 06-07
Years and that he signed documents like High Sea Sales Agreement,
Form A, in the presence of Shri Love Sharma; Shri Yashpal Goyal has
subsequently denied of having signed the documents shown to him in
statement dated 26.03.2021; the belated denial shows his
inconsistent conduct; however, he has nowhere stated that the Shri
Jatinder Kumar or his employees has appended the signatures;
therefore, the appellants cannot be charged with forgery; it is a
matter of record that M/s Goyal Steel Industries later filed CWP No.
20282 of 2021, before the Hon'ble High Court of Punjab and Haryana,
seeking provisional release and even prayed for permission to re-
export the same; respondent did not file any reply to the contentions
raised by the Importer before Hon'ble High Court; the affirmative
claim of title to the consignment renders the denial on 26.03.2021,
false and unreliable; Shri Manoj Verma, Senior General Manager of
M/s MSC Mediterranean Shipping Company, stated that the
containers for import of Light Melting Scrap were booked by M/s
AEGON Shipping LLC, Dubai on behalf of the Shipper M/s Sama Al
Jazeera Auto Used Spare Parts TR. LLC, Dubai; it transpires that
booking of the containers for transshipment was done by the Foreign
Exporter and that M/s Raghav Alloys & Metals was in existence.
14 C/60251/2022 & 07 others
9. Learned Counsel submits in addition that Shri Rajan Arora, Partner
cum H Card holder of M/s Sark Enterprises Delhi, stated on
23.02.2021 & 24.02.2021 that he had deposited the Customs Duty as
well as other charges, upon instructions from Shri Sunil Kumar
Proprietor, M/s KRV Enterprises; Shri Sunil Kumar stated on
24.02.2021 that the payment of Customs Duty as well as Shipping
Charges were made as per instructions from Shri Love Sharma.
10. Learned Counsel submits also that the Respondent Department
has foisted the case of import of dry dates mis declared as LMS, on
the Appellant solely on the ground that Shri Jatinder Kumar was in
charge of and in control of goods imported vide B/e 2086929 dated
22.12.2020 and 21023144 dated 24.12.2020; that the IEC of M/s
Goyal Steel Industries and M/s Raghav Alloys was misused by the
said Appellant and that the Customs Duty as well as other charges
were paid by the Appellant. He submits that the Customs Department
as well as DRI doubted, the authenticity of import documents, at no
point; DRI has failed to conduct any overseas enquiry in respect of
import documents; goods were duly inspected by the Pre Inspection
Agency who also uploaded the Inspection report along with the
photographs and videos on the site of DGFT; no action was initiated
against the Pre Inspecting Agency; DRI completely ignored the fact
that the Metallic Scrap the Importer has to register in terms of
Notification No. 17/2015-2020 dated 05.09.2019, using the digital
signatures as well as automated SMS on the registered Mobile
Numbers sent to M/s Goyal Steel Industries as well as M/s Raghav
15 C/60251/2022 & 07 others
Alloys; it cannot be presumed that the Importers did not possess any
knowledge regarding the import of mis declared goods.
11. Learned Counsel submits that DRI failed to conduct any overseas
enquiry from the country of Export in respect of the imported goods,
even though they had plenty of time from the date of seizure on
25/26.12.2020 and issue of the Show Cause Notice on 10.11.2021;
Show Cause Notice and the Impugned Order are liable to be
quashed as DRI failed to appreciate the fact that M/s Goel Steel
Industries had claimed the title of the goods, vide
letter/representation dated 07.02.2021 & 09.02.2021, and requested
for provisional release of goods as well as de stuffing of the cargo;
the department did not even contest the CWP No. 20282 of 2021 filed
by M/s Goyal Steel Industries claiming right and title over the
imported mis-declared goods; further the importer had pleaded
before the Adjudicating Authority claiming ownership and requested
for release of imported goods, as noted in Para 9 of the impugned
order.
12. Learned Counsel submits that it was perverse on the part of DRI
to conclude that the appellant has forged the signatures on HSS
agreement; the forensic report indicated only that the signatures
were not of the importers; it never said that the signatures are of the
appellants; at no point in time the sample signatures of the Appellant
were forwarded to the Forensic Laboratory; DRI has failed to conduct
any investigation in respect of purchase of "Stamp Paper" used for
the purposes of entering into HSS Agreement to ascertain who
purchased the same and whose signature was appended in the
16 C/60251/2022 & 07 others
register maintained with the Stamp Vendor; DRI did not ascertain the
signatures attested before Notary Public; in the absence of
substantive enquiry, it is not correct to hold the appellants
responsible; moreover, the respondent denied the request of the
Appellant for grant of Cross Examination as per Section 138 B of the
Customs Act, 1962; the appellant had no role in the mis-declaration
of the goods; subsequent statement by M/s Goel Steel Industries
cannot be relied upon being self-contradictory and inconsistent. He
relies on Suraj Mal AIR 1979 SC 1408; JKS AIR TRAVELS 2016 (331)
ELT 173 (Mad.); Anil Kumar Shaw 2002 (140) ELT 263 (Tri. -
Kolkata); Roshiban N.R. 2018 (364) ELT 594 (Tri. - Bang; Prem
Narayan Doulatram Verma (41) ELT 116 (Tribunal).
13. Learned Counsel submits that the impugned order is liable to be
set aside on the ground that it gives contradictory findings; the first
part of the Order alleges that both the importing firms namely M/s
Goyal Steel Industries as well as M/s Raghav Alloys & Metals were
found to be Non Existent, as indicated in the Order, dated
08.02.2021, passed by Shri Atul Kasana, Learned Additional Session
Judge; while opposing the bail application of the Proprietor of M/s
Raghav Alloys & Metals, DRI had stated that Shri Manish Kumar was
instrumental in purchase of Dry Dates and his firm was found to be
non-existent.
14. Learned Counsel submits that later statement by Shri Yashpal
Goyal the Importer, that he was not aware of import of "Light Melting
Scrap", by Shri Love Sharma, is factually incorrect; M/s Goyal
17 C/60251/2022 & 07 others
Industries had applied to Punjab Pollution Control Board. for
necessary authorization which was granted on 09.01.2020;
Adjudicating Authority has failed to consider this fact and the fact
that the Importer M/s Goyal Steel Industries, vide Authorization
dated 22.10.2020, authorized Shri Love Sharma to import metal
scrap in the name of his firm.; neither the investigating Agency nor
the adjudicating authority, confronted the Importer with all such
documents like Authorization issued in favour of Shri Love Sharma,
application for Registration with DGFT, application for NOC by PCB,
representation or provisional release etc; Appellant's specific request
for cross examination of all such persons whose statements were
relied upon, was rejected. Such statements cannot be relied upon as
held in Andaman Timber Industries 2017 (50) STR 93 (SC); Flavel
International 016 (332) E.L.T. 416 (Del.); Parmarth Iron Pvt. Ltd.;
2010 (260) E.L.T. 514 (All.) and Ambika International 2016 SCC,
Online P&H 4559.
15. Learned Counsel submits further that the Impugned Order passed
by the Learned Adjudicating Authority is liable to be struck down on
the sole ground that the order extending time limit for issuance of
Show Cause Notice under section 110 (2) of the Customs Act, 1962
has not been issued by the Adjudicating Authority i.e. the
Commissioner of Customs; on the contrary the same has been issued
by Additional Director General, Directorate of Revenue Intelligence,
Ludhiana Zonal Unit, Ludhiana, who is not the proper officer in terms
of Section 110 (2) of the Customs Act, 1962; the power to extend
time for issuance of Show Cause Notice u/s 110 (2) vests with the
18 C/60251/2022 & 07 others
Commissioner of Customs, thus the instant Show Cause Notice is
barred by limitation and consequential proceedings are liable to be
dropped on this sole ground itself. He further submits that the order
dated 24.06.2021 having been issued by ADG, DRI, Ludhiana does
not bear any DIN Number; in the absence of the said DIN the said
order extending time limit for further 6 months is invalid; CBEC
Circular dated 05.11.2019 mandates that all orders/communication
be issued with respective DIN; in terms of Para 4 of the said Circular,
order dated 24.06.2021 extending time for issuance of Show Cause
Notice is rendered as invalid being issued without any DIN; no
reasons for not mentioning DIN were mentioned.
Submissions on behalf of S/Shri
(i). Yashpal Goyal (C/60261 /2022)
(ii). Love Sharma(C/60263/2022)
(iii). Rajan Arora (C/ 60262 / 2022),
(iv). Sunil Kumar(C/60264/2022)
16. Shri Rahul Raheja, assisted by Gaurav Prakash, advocate for
the above four appellants, submit that the allegation against Shri
Yashpal Goyal was that he had knowingly given his IEC
details to Shri Love Sharma for the purpose of import;
Shri Yashpal Goyal is the sole proprietor of M/s Goyal Steel Industries
engaged in the business of import and trading of Iron Scrap having
been allotted IEC AKOPP3397B; they had authorized Sh. Love
Sharma for import of two consignments "Light Melting Scrap" from
Dubai (UAE); since Shri Love Sharma did not possess necessary
19 C/60251/2022 & 07 others
import permission in his name including clearances from "Pollution
Control Board" as well as "Importer Exporter Code",; he requested
Shri Yashpal Goyal permission to use details of his firm to import two
consignments of "Light Melting Scrap"; Respondent failed to
appreciate that Mr. Love Sharma has duly indemnified the Appellant
by way of Authority letter dated 22.10.2020; it is not the case that
the investigating agency or the Respondent has disputed the contents
of the said Authority letter dated 22.10.2020; lending of IEC is not a
violation under Customs Act, 1962, as held in Proprietor, Carmel
Exports and Imports v. CC, Cochin 2012 (26) ELT 505 and in Hamid
Fahim Ansari v. CC Imports, Nava Sheva: 2009 (241) ELT 168; the
word "beneficiary owner" has been duly incorporated in Sec 2(26) of
the Customs Act, 1962, vide Finance Act, 2017. allegation against
Shri Rajan Arora was that he has paid customs duty payment,
Shipping Line payment, port handling payment upon instruction from
Sunil Kumar, prop. of M/s KVR Enterprises, Ludhiana; allegation
against Shri Love Sharma was that he abetted Jatinder Kumar by
making available the IEC documents of M/ Goyal Steel Industries and
the allegation against Shri Sunil Kumar was that he instructed Rajan
Arora to pay customs duty, Shipping Line charges and port handling
charges payment despite the fact that he is not the importer.
17. Learned advocate submits also that the show cause notice
proposed penalty under Section 117 of the Customs Act, 1962 on the
allegation of aiding and abetting Jatinder Kumar and not for any
contravention on the part of Appellants; the word "abetment" is used
for an activity done with intent to participate in misdeeds with pre-
20 C/60251/2022 & 07 others
knowledge and presupposition of undue benefit likely to arise by the
alleged activity; there is no evidence adduced in the show cause
notice showing that the Appellant acted intentionally with pre-
knowledge and with presupposed benefit to be obtained from Jatinder
Kumar; there is no such allegation in the show cause notice. He
submits that Hon'ble Supreme Court, in case of Shri Ram Vs State of
U.P. AIR 1975 SC 175, held that in order to constitute abetment, the
abetter must be shown to have intentionally aided the commission of
crime; Hon'ble High Court of Bombay applied the above judgment in
the case of Amrit Lakshmi Machine Works 016 SCC Online Bom 66)
while deciding imposition of penalty under Section 112(a) of the
Customs Act.
18. Learned advocate submits further that the show cause notice
merely makes allegation of abetment without even discussing as to
how the Appellants abetted the contravention; appellants acted in
Bonafide belief. Hence, no penalty is imposable on the Appellant. He
relies on Akbar Badrudin Giwani (1990) 2 SCC 203; Hindustan Steel
Ltd (1969) 2 SCC 627; Sumeet Industries Ltd 2003 SCC Online
CESTAT 978; Godrej Soaps Ltd 2004 SCC Online CESTAT 2821; Asian
Paints (India) Ltd 2003 SCC Online CESTAT 1941.
19. Learned advocate submits that the impugned order is contrary
to the facts and attendant provisions of law and if permitted to stand
would result in grave miscarriage of justice; the impugned order is
vitiated by non-application of mind as the learned Respondent has
failed to apply his independent mind to the vital facts of the case and
attendant provisions of law and hence the order is liable to be set
21 C/60251/2022 & 07 others
aside. That the impugned order is a quasi-judicial order and it must
be supported with cogent reasoning and if the same is absent then it
is liable to set aside. He relies on State of Orissa Vs Chandra Nandi
(2019) 4 SCC 357, wherein Hon'ble Apex Court has held that every
order passed by judicial, quasi-judicial, tribunal or any competent
authority, which decides the disputes between the parties must be
supported by a cogent reasoning.
20. Learned advocate submits that the Respondent erred as no
show cause has been issued within the period of six months as per
section 110(2) and section 124 of the Act; legislature in its wisdom
has categorically laid down that if no notice is given within the
stipulated time, then the seized goods shall be released as held in
Ambalal Morarji Soni 1971 SCC Online Guj 10; in the present case the
ADG,DRI, who is not the competent authority, extended the time
period vide letter/order dated 24.06.2021; neither the letter/order
dated 24.06.2021 and nor the email bear Document Identification
Number (DIN) ; hence the order shall be deemed to have not been
issued in terms of CBEC Circulars No. 37/2019 dated 05th
November, 2019 and Circular No. 43/2019-Customs dated
23.12.2019; the present case Show cause notice has been issued on
10.11.2021 i.e. after 11 months of detention and 9 months after
passing of formal seizure memo dated 18.02.2021; thus, no show
cause has been issued within the period of six months and therefore,
goods are liable for unconditional release and the Appellants are
entitled for consequential relief. He relies on the following cases.
Chaganlal Gainmull v. CCE 1990 Supp SCC 527
Iqbal Hussain v. UOI 2017 SCC Online Del 7460
22 C/60251/2022 & 07 others
Kore Koncepts v. CC 2013 SCC Online Del 6553
Jatin Ahuja v. UOI 2012 SCC Online Del 4628
Vipin Chanana v. DRI 2013 SCC Online Del 473
Jatinder Kumar Sachdeva v. UOI, 2016 SCC Online Del 6235
E.S.I. Limited v. UOI, 2002 SCC Online Cal 241
S.J. Fabrics Pvt Ltd. v. UOI 2011 SCC Online Cal 1077
21. Learned advocate submits that penalty has been erroneously
imposed under Section 117 of the Customs Act, 1962; there is no
allegation in the Show cause Notice that the appellants either had
previous knowledge that dry dates were being imported in the name
of Light Melting Scrap or that they had mens rea; on the contrary it
accepts that one of the appellants Shri Yashpal Goyal was not aware
of the same; penalty cannot be imposed if there is no mens rea. He
relies on Shivaji Sahebrao Bobade & Anr 1973 AIR 2622, 1974 SCR
(1) 489; Nanda Incorporated 2017 (11) TMI 252 - CESTAT CHENNAI;
M/s. D.S. Cargo Service 2009 (247) ELT 769 (Tri.) and Neptunes
Cargo Movers Pvt Ltd 2009 (246) ELT 621 (Tri. Mumbai) and 2007
(219) ELT 673 (Tri.). He submits that apart from statements no
incriminating documents or other corroborated evidence has been
relied upon in order to support, which itself is bad in the eyes of law
as held in Rawf Re-Rollers, 2015 (317) ELT 499 (T). it was held in
Nazir-Ur-Rahman 2004 (174) ELT 493 (CESTAT); Oceanic Shipping
Agency 1996(82) ELT 57; Panorama Electronics 2001(130) ELT 877
(CEGAT) and Rupesh Bhai R Zaveri (2007) 217 ELT 386 (CESTAT),
that if there is no evidence that the person knew or had reason to
believe that goods are liable to confiscation, penalty cannot be
imposed.
23 C/60251/2022 & 07 others
22. Learned advocate submits that the Appellants have neither
placed any order on the foreign supplier nor are the the owner of the
said goods; even if the goods are liable for confiscation under
Section 111(d) of the Act, no penalty can be imposed on the
Appellants, as they are not, in any way, connected with the
shipment; penalty is not be imposable on the Appellants also for the
reason that the department has not proved that the action of the
Appellants has rendered the goods liable for confiscation; the
appellants are not the owners and have no title in the subject goods
and hence, penalty is not imposable; further, the penalty imposed
on appellant is in the nature of a personal penalty; quantum of
penalty imposed upon the appellant is too excessive and does not
have mandate of law and cannot be recovered, either from the
appellant, or from any other person; Hon'ble Supreme Court has
considered the nature of penalty levied under various provisions of
the Customs Act in the decision in Union of India v. Mustafa & Najibai
Trading Co 1998 (101) E.L.T. 529 (S.C.); there is plethora of judicial
rulings in which it has been held that the amount of penalty imposed
should be reasonable. He relies on
Basudev Das Vs Union of India 2011 (272) ELT 668
(Gau.)
K. Baluchamy Vs Commissioner of Customs, Trichy 2007
(212) ELT 202 (Tri. Chennai)
K.K. Saidalavi Vs Commissioner of Customs, Trichy 2006
(199) ELT 813 (Tri. Chennai)
K.P. Abdul Majeed Vs Commissioner of Customs & C.Ex.
Cochin 2000(123) ELT (960) (Tribunal)
24 C/60251/2022 & 07 others
CCE, Goa v. Kabul Textiles (LLC) - 2006 (206) E.L.T. 1173
(Bom.) affirmed by the Apex Court in 2007 (218) E.L.T.
A122 (S.C.)
Arya International v. CC, Kandla - 2010 (258) E.L.T. 441
(Tri.-Ahmd.)
Royal Impex v. CC, Chennai - 2007 (211) E.L.T. 71 (Tri. -
Chennai)
Amba Woollen Mills vs. CCE, Bombay - 1998 (99) E.L.T.
353 (T)
CCE v. Freight Systems (P) Ltd. - 2012 (286) E.L.T. 231
(T).
Garima Trade Services Ltd. v. CC, Visakhapatnam - 2002
(146) E.L.T. 150 (T),
Nalakath Spices Trading Co. v. CC, Cochin - 2007 (213)
E.L.T. 283 (T)
CC, New Delhi v. Sewa Ram & Bros. - 2003 (151) E.L.T.
344 (T)
23. Learned advocate submits that dry dates are not prohibited
goods and are freely importable; thus the appellant is entitled to
redeem the goods in terms of Section 125 of the Customs Act; it was
only due to the mistake on the part of the foreign supplier, dry dates
were dispatched instead of light metal scrap; Dry dates are not
prohibited goods as alleged and is freely importable; it was held in
Mukherjee & Alliances (India) Private Limited 2019 SCC Online
CESTAT 8999, wherein Hon'ble CESTAT, relying upon Gopal Saha
2016 SCC Online Cal 663 that the goods in question cannot be
termed as 'prohibited goods' merely for mis-declaration in the Bills of
Entry, for the purpose of imposing penalty under Section 112; even if
we assume without admitting that Appellant has acted illegally for
monetary gains, then also as per Section 125 of the Customs Act
25 C/60251/2022 & 07 others
1962, he is eligible to redeem the dry dated after payment of
applicable duty and customs dues. He relies on
Commissioner of Customs Vs Deluxe Exports 2001(137)
E.L.T. 1336(Tri. -Mumbai);
1993 (67) E.L.T. 1000 (GOI) in the case of Kamlesh
Kumar v. Collector of Customs;
1994 (73) E.L.T. 240 (GOI) in the case of Jaspal Singh
Banty v. Collector of Customs;
1994 (73) E.L.T. 425 (CEGAT) in the case of V.P.
Hameed v. Collector of Customs
24. Learned advocate submits that the impugned order erred in
determination of value the impugned goods; department has not
given any justification and have contravened provisions of law and
have adopted Rule 9 of Customs Valuation (Determination of Value of
Imported Goods) Rules, 2007 straight, without exhausting the Rules
3-9 of CVR as specified; the revenue did not deliberately conduct any
market inquiry properly; data relied upon in the show cause notice
cannot be accepted as no copy of the Bill of Entry was supplied;
evidence relied upon is merely Screen Shot of the EDI system; in
order to evaluate the data relied upon it is necessary to consider the
Value declared, Quantity of goods imported as well as the Country of
origin of the said goods, which can only be evaluated once the copy
of the Bill of Entry No. 9966498 Dated 15.12.2020 along with its
import documents are supplied to the Appellant; in the absence of the
supply of the Copies of the Bills of Entries along with the import
documents, the said data cannot be relied upon as held in the case of
Prayas Woolen (P) Ltd 2016 (332) ELT 376 (Tri-Mum); Dujodwala
26 C/60251/2022 & 07 others
Products Ltd 2009 (235) ELT 266 (Tri-Mumbai); Hewlett Packard (I)
Pvt Ltd 2006 (204) ELT 585 (Tri-Bang); Dwarakadas G. Kanjani 2001
(137) ELT 967 (Tri-Chennai) and Poly glass Acrylic Mfg. Co. Pvt Ltd
2015 (322) E.L.T. 794 (S.C.).
25. Learned Counsel submits that the cases relied upon in the
impugned order are not applicable as the Respondent has failed to
consider that each and every case is different from each other; it was
held in Sri Kumar Agency 2008 (232) E.L.T. 577 (S.C.) that each case
is different and a single point can separate them.
Submissions on behalf of Saurabh Kumar, Superintendent of
Customs.
26. Shri R K Hasija, assisted by Shri Shivang Puri, learned counsel,
submits on behalf of Shri Saurabh Kumar (Appeal No. C/60232/2022)
that it was alleged that the appellant displayed dereliction of duty in
granting "Out of Charge" (OOC) to goods covered under Bill of Entry
dated 23.12.2020 without verifying the truthfulness of the importer's
declaration; due to a high backlog of work, including additional
assignments of Faceless Appraisement and Truant Customs, the
Appellant relied on the Inspector's examination report recorded in the
EDI system for clearance of goods. He submits that the clearance of
B/E No. 2086929 filed on 23.12.2020 by M/s Goyal Steels Limited,
Ludhiana, was delayed due to a holiday (Christmas 25.12.2020) and
payment glitches in the ICEGATE Portal; importer requested for
urgent clearance on 26.12.2020, Saturday at 7 PM; as per CBIC's
National Trade Facilitation Action Plan 2017-20, clearance beyond 48
27 C/60251/2022 & 07 others
hours was against prescribed timelines; in addition, there was a
direction, dated 21.12.2020, by the Commissioner to expedite
clearance processes to avoid delays; there were compelling
circumstances which led to pressure for clearance i.e. ongoing
maintenance of the EDI System (25-27 Dec 2020) resulting in
frequent disruptions and difficulties in logging into the system, the
farmer protests (Oct-Nov 2020) and severe labour shortage; the
Custodian (ICD Hind Terminal) failed to present the containers in
time for examination, affecting timely clearance; as there were no
container scanners, there were automated alerts on discrepancies in
the imported goods.
27. Learned Counsel submits that the Inspector conducted physical
examination and recorded the report in the EDI system.; the
Appellant did not accompany the Inspector due to workload
constraints; he relied on the Inspector's electronic report, which
stated that the goods matched the declaration; the remark "in the
presence of Superintendent" was a copy-paste entry from previous
reports, not reflecting actual presence; the goods remained in the
bonded Customs area and had not been released; DRI officials
intervened and stopped all processing including further verification by
Customs staff; had any misdeclaration been detected post-clearance,
sufficient safeguards existed to revoke the OOC order and conduct a
review.
28. Learned Counsel submits that the Impugned Order wrongly
assumes that the Appellant was present during cargo examination
based on a report submitted by the Inspector on the EDI System;
such averment in the report is nothing, but the cyclostyled format
28 C/60251/2022 & 07 others
using previous reports to save time; the Appellant had no reason to
doubt the Inspector's report; no instruction designates the
Superintendent as the sole proper officer for examination; both the
Superintendent and Inspector are independently responsible; there
is no evidence to suggest or prove the presence of the Appellant
during the examination of five containers; statements given by the
Inspector, and CHA do not mention the Appellant's presence during
the examination.
29. Learned Counsel submits that there was no Customs alerts or
modus operandi circulars about mis-declaration of dry dates;
therefore, Inspector was deputed to conduct the examination, and his
report confirmed the goods matched the declaration; the Appellant
had no reason to doubt its accuracy and thus issued the OCC; there
is no evidence that the appellant had prior knowledge or that he
colluded in the alleged mis-declaration; the Impugned Order holds
that there was no abatement or involvement of the Appellant; the
conclusion in the Impugned Order is based on mere presumption
rather than on evidence; appellant was aware that impugned goods
were prohibited; as there is no contravention of Section 47(1),
penalty under Section 117 is legally unsustainable; without prejudice
to above, even if a contravention of Section 47(1) were assumed, the
Appellant is fully protected under Section 155(1) of the Act; the OCC
order was issued in good faith, based on the Inspector's examination
report; the Appellant had no reason to doubt the accuracy of this
report; thus, the Appellant is immune from legal proceedings under
Section 155(1).
29 C/60251/2022 & 07 others
30. Learned Counsel submits further that under Section 155(2), prior
written notice must be given to a customs official at least one month
before initiating proceedings, and no proceedings can be initiated
beyond three months from the cause of action; in the present case,
the mandatory notice was issued nine months after the cause of
action, rendering the proceedings null and void; he relies upon:
Rajeev Kumar Agarwal vs. Commissioner [2007 (217) ELT
392 (Tri-Bang)]
Ashok Kumar Singh vs. State of West Bengal [2016 (338) ELT
255 (Cal)]
P.N. Ram vs. CCE, Kanpur [2008 (225) ELT 294 (Tri-Del)]
CC, BANGALORE vs. M. NAUSHAD [2007 (210) E.L.T. 464
(Tri. - Bang.)]
A.P. SALES V/s CC, HYDERABAD [2006 (198) E.L.T. 309 (Tri.
- Bang.)]
31. Learned Counsel submits also that the Commissioner wrongly
relied on Golla Rama Rao vs. Union of India [2000 (124) ELT 112
(Mad.)], as that judgment actually upheld the limitation bar under
Section 40(2) of the Central Excise Act, which is analogous to Section
155; further, the Supreme Court's order dated 23.03.2020 extending
limitation due to COVID-19 does not apply to the issuance of show
cause notices under Section 155(2); CBIC Circular No. 157/13/2021-
GST dated 20.07.2021 clarifies that the extension applies only to
judicial/quasi-judicial proceedings like appeals and petitions not to
the issuance of notices under GST laws which should also apply to
Mutatis Mutandis to customs as well; the Impugned Order holds that
there is dereliction of duty on the part of the Appellant as he has not
performed the duty as per the Customs' law and procedure; however,
30 C/60251/2022 & 07 others
the Respondent has not specified the procedure that was allegedly
not followed. He submits that failure to perform the duty of
scrutinizing/ examining the document is dereliction of duty at best
and does not warrant the imposition of penalties under the Customs
Act as held in the following.
P.N. Ram v. CCE, Kanpur [2008 (225) ELT 294 (Tri-Del)]:
Pawan Kumar Singh v. CCE (Adjudication), New Delhi
[(2017) 357 ELT 186 (Tri.-All.)]:
D.R. Ahuja v. CC, Amritsar [(2010) 250 ELT 386 (Tri.-Del.)]
Dinabandhu Nayak v. CCE., Kolkata-III [2016 (343) E.L.T.
967 (Tri. - Kolkata)]:
Submissions on behalf of Suraj Salaria (Appeal No.
C/60213/2022)
32. Sudhir Malhotra, learned counsel for the appellants, submits that
M/s Goyal Steel Industries, Ludhiana filed Bill of Entry No.2086929
dated 23.12.2020 and 2103144 date 24.12.2020 through Customs
Broker (CB) M/s Secon Logistics Pvt Ltd., Ludhiana for clearance of
light melting scrap falling under CTH 7204 4900; each bill of entry
was having 5x40' containers; the goods covered under bill of entry
no. 2086929 date 23.12.2020 was shown to have been purchased on
high sea sales basis from M/s Raghav Alloys and Metals, Khanna; the
appellant gave examination report in respect of 5 containers covered
against bill of entry No. 2086929 dt. 23.12.2020 in the compelling
circumstances of time bound clearance working in a bona fide
manner; there was neither any mens-rea nor any mala fide nor any
alleged illegal gratification; no duty was paid against bill of entry no.
2103144 dt. 24.12.2020 and the containers were not opened, not
examined and not given out of charge. He submits that the Learned
Adjudicating Authority has imposed penalty under section 117 of
31 C/60251/2022 & 07 others
Customs Act, 1962; the impugned order, admits that there was no
abatement on part of the appellant and it was dereliction of duty.
33. Learned counsel for the appellants submits that the Adjudication
Authority failed to appreciate that for dereliction of duty the penal
provisions under Customs Act are not attractable; as there was no
abatement on the part of appellant and as the bona fides of appellant
are also not disputed, Adjudicating Authority erred in not extending
the protection of section 155 of Customs Act, 1962. He submits
without prejudice to above that the notice under section 155(2) of
Customs Act was served on appellant vide letter F. No. DRI/
LDZU/856/ (INT-02)/(ENQ-1)/2020/1429 - 1431 dt. 21.09.2021 by
ADG, DRI for the alleged offence dt. 26/27.12.2020; Adjudicating
Authority failed to appreciate that the notice under section 155(2) of
the Customs Act has been issued beyond limitation period of three
months from the accrual of cause of action.it was held in MI Khan
2000 (120) ELT 542 (T), Sushma 2022 (379) ELT 376 (T) Rajiv
Kumar Aggarwal - 2007-TIOL-1736-CESTAT-BANG and Vijender
Singh & Others final order No. 60567-60568/2021 dt. 25.03.2021 in
Appeal No. C/60042-43/2020, that protection against initiation of
adjudication proceedings for imposition of penalty available to
Customs Officer under Section 155 of Customs Act.; further
Commissioner (Appeals), Customs & Central Excise, Chandigarh in
similar case vide Order-in-Appeal No. 115-117/Cus/Ldh/2009 dated
27.09.2010 set aside the order-in-original imposing penalty on
customs officers on the ground that proceedings initiated hit by time
limitation under section 155 (2) of Customs Act.
32 C/60251/2022 & 07 others
34. Learned counsel for the appellants submits that the Adjudicating
Authority erred in holding that time limit to issue notice under Section
155(2) is covered by the exemption given during Covid Pandemic and
in relying upon decision of Hon'ble High Court of Madras in case of
Golla Rama Rao Vs. UOI - 2000 (124) ELT 112 (Mad); statutory
provisions requiring issuance of notice were not relaxed due to covid
pandemic as per CBIC Circular No. 157/13/2021-GST dated
20.07.2021; the reliance on the case of Golla Rama Rao (supra) is
incorrect as in the instant case Adjudicating Authority admitted that
there was no abatement on the part of appellant; there was no
mala fide intension, no mens rea and no allegation of any unlawful
consideration.
Submissions on behalf of Revenue
35. Shri Anurag Kumar, Learned authorised Representative, for the
Revenue, reiterates the findings of the impugned order and submits
that the goods were mis declared as Light Melting Scrap; imported
dry dates did not have any Plant Quarantine clearance and were,
thereby, prohibited under Section 2(33) of the Customs Act, having
been smuggled in violation of following condition specified in clause
10(2) of Plant Quarantine (Regulation of Import into India) Order,
2003; Schedule-V, VI and VII stipulates that the goods falling
under these schedules shall be accompanied by an original
Phytosanitary Certificate issued by the authorized officer at country of
origin or Phytosanitary Certificate for re-export issued by the
country of re-export along with attested copy of phytosanitary
certificate from country of origin, as the case may be, with
33 C/60251/2022 & 07 others
the additional declarations being free from pests mentioned under
Schedule-V and VI of this order or that the pests as specified do not
occur in the country or state of origin; for both the reasons the goods
are rendered liable for confiscation.
36. Learned Authorised representative submits on the Competency of
ADG, DRI, to issue order extending the time period under Section
110(2) of the Customs Act, 1962 that ADG,DRI is competent
authority under Section 110(2) of the Customs Act, 1962; Hon'ble
Supreme Court in Review Petition no 400 of 2021 (in Civil Appeal No
1827 of 2018) held that the officers of the Directorate of Revenue
Intelligence have already been appointed as officers of Customs; vide
Notification 17/2002-Cus (N.T) dated 07.03.2002 issued under the
provisions of the section 4 of the Customs Act, 1962, Central
Government has inter-alia, appointed the Additional Director General,
Directorate General of Revenue Intelligence to be the Commissioner
of Customs for the whole of India. Further, by this Notification, the
Central Government has appointed Additional Directors, or Joint
Directors, of Directorate of Revenue Intelligence posted at
Headquarters and Zonal/Regional units as the Additional
Commissioners or Joint Commissioners of Customs; and also that the
Deputy Directors, or Assistant Directors, of Directorate of Revenue
Intelligence posted at Headquarters and Zonal/Regional units have
been appointed as the Deputy Commissioners or Assistant
Commissioners of Customs for the whole of India.
37. Learned authorised Representative submits on the issue of
absence of Document Identification Number (DIN) that the
circumstances for non-issuance of DIN have not been recorded in the
34 C/60251/2022 & 07 others
official file; however, the period pertains to the second wave of
COVID 19 when the situation in the entire country was grim; the
purpose of DIN was to ensure transparency in the indirect tax
administration, to provide the recipients a digital facility to ascertain
the genuineness of the communication; in the instant case the
communication to the recipient was made by a mail of the Directorate
and was also dispatched through speed post; this leaves no room
regarding the authenticity of the communication; further, the
petitioner did not care to verify the authenticity of the communication
either; Hon'ble Supreme Court, vide an interim order dated 03-01-
2024, while dealing with the case of CIT Vs Brandis Mauritius Hollings
Ltd, indicated that the Court is to examine the matter further.
Rebuttal of the submissions made on behalf of M/s Jatinder
Kumar (Appeal No. C/60252/2022)
38. Learned authorised Representative in rebuttal of the submissions
made on behalf of M/s Jatinder Kumar (Appeal No. C/60252/2022)
submits that M/s Secon Logistics Pvt Ltd was the Customs Broker
who filed the bills of entry; their Director, Jatinder Kumar, was well
versed about the regulations of Customs Broker Licensing Rules,
2018; investigations conducted by DRI, the High Sea seller M/s.
Raghav Alloys and the importer ie M/s Goyal Steel industries, were
found to be non-existent at declared addresses; while none of these
consignees of the imported goods ever got in contact with the
Shipping Line M/s MSC Agency (India) Pvt Ltd; it was Jatinder Kumar
and his CB firm that were in direct touch with the Shipping Line for
import of goods from Dubai; Shri Manish Kumar in his statement
stated that he has not signed any HSS documents; examination
35 C/60251/2022 & 07 others
report confirmed that the signatures on the documents were made by
different person and not Manish Kumar and of Shri Yashpal Goyal;
Shri Love Sharma stated that he had asked Sunil Kumar of M/s EVR
Enterprises for sending Rs. 10,00,000/- he owed to M/s Secon
Logistics, on the directions of Jatinder Kumar; Shri Jatinder Kumar
was aware that as CHA he could not deposit Customs duty, so he
deliberately used this route; he gave 10 lakhs to Shri Sunil Kumar, of
KVR Enterprises, covering it up as for purchase of fabric for
manufacture / purchase of fabric etc for T-Shirts. Shri Sunil Kumar
transferred the amount to Shri Rajan Arora of M/s Sark Enterprises,
who made all payments related to Customs Duty, Port Handling
Charges and other charges, through the account of M/s Sark
Enterprises; Forensic report confirms that the HSS documents were
not signed by Shri Yashpal Goel or Raghav Enterprises; the
documents were submitted by Shri Jatinder Kumar; hence, the
shadow of doubt of forgery is cast on Shri Jatinder Kimar; Shri
Jatinder Kumar has also admitted that he had never met Yash Pal,
proprietor of importer firm M/s Goyal Steel Industries nor had
physically verified its functioning at the declared address; Form 'A',
an authorisation from the importer, was handed over to him, not by
Shri Yash Pal Goyal but by one Love Sharma (Love Sharma) but he
did not know whereabouts of Love Sharma; Jatinder Kumar stated
that M/s Raghav Alloys & Metals, the high seas seller of 05 containers
to M/s Goyal Steel Industries, was in the name of none other than
Manish Kumar, who worked for him on commission of Rs.200 to
Rs.500 for arranging clients, collection of payments, etc; on being
asked to produce record relating to his dealing, he stated that he had
36 C/60251/2022 & 07 others
not maintained any correspondence or any other record relating to
transactions with importer i.e. M/s Goyal Steel Industries as a
Customs Broker.
39. Learned authorised Representative submits that the averments
advanced by the Counsel for the appellants on the issue of SIMS
registration, Cross-Examination of Exports are an afterthought and
not required in view of the strong evidence against them; Cross
Examination of co-Noticees is not required as held be Hon'ble Kerala
High Court in the case of NS Mahesh 2016(331) ELT: 402(Ker). He
submits as regards the appellant's submission that relied upon
documents were not suppled to him is incorrect; High Seas Contract
has already been supplied to the appellant with the Show cause
Notice; in view of the undeniable facts as above, the submissions of
Shri Jatin Kumar are not acceptable; this case involves specific facts
including forgery, mis-declaration, collusion of Customs officers,
unbroken chain of financial transaction leading to the appellant and
forensic analysis of signatures and documents; therefore, the cases
relied upon are not applicable; penalties under Section 112 & 114A
and 114AA have been rightly imposed.
Rebuttal of the submissions made on behalf of Yashpal Goyal
(Appeal No. C/60261/2022)
40. Learned authorised Representative submits that Shri Yashpal
Goyal, who had stopped operating from B 22 3245/2, Chet Singh
Nagar, Ludhiana, after lockdown was imposed in March' 2020; hence
he could not be located earlier; Shri Yashpal Goyal agreed that Love
Sharma, who was son of his close friend Late Shri Avdesh Sharma,
37 C/60251/2022 & 07 others
informed him that he was importing a consignment of scrap for which
his signatures were required; he was not promised any commission ;
the fact that dry dates had been imported in guise of Light Melting
Scrap was brought to his knowledge by Love Sharma after DRI
booked the case; he denied knowing Jatinder Kumar or Sunil Kumar
or Manish Kumar or Rajan Arora; he had signed such papers but the
signatures appearing on the High Seas Sale Agreement and Form-A
submitted to Indian Customs by Jatinder Kumar in respect of goods
imported vide Bill of Entry No. 2086929 dated 23.12.2020, were not
his.
41. Learned authorised Representative submits that though Shri
Yashpal Goyal was not aware of the fact that dry dates were being
attempted to be illegally imported in guise of Light Melting Scrap for
which his IEC was being used by Jatinder Kumar; he had knowingly
given his IEC details to Shri Love Sharma for the purpose of import
and was also aware that a consignment was being imported using his
IEC; bills of entry No. 2086929 dated 23.12.2020 and No. 2103144
dated 24.12.2020 were filed under his company name; yet Shri
Yashpal Goyal took no steps to ensure that only genuine imports
were made.; he further filed a writ Petition CWP No.20282 of 2021 in
the Hon'ble Punjab & Haryana High Court; in compliance of the
Hon'ble High Court order, dated 05.10.2021, he was asked to appear
for hearing on 20.10.2021 before passing Speaking Order; he did not
appear for hearing nor submitted any Vakalatnama granting authority
to any Advocate to cause appearance on his behalf; however,
Advocate Shri Saurabh Kapoor sent an email on the day of hearing
38 C/60251/2022 & 07 others
i.e. 20.10.2021, enclosing there with a Vakalatnama from one Shri
Love Sharma along with an authority letter dated 22.10.2020 of M/s
Goyal Steel Industries, vide which Shri Love Sharma was authorized
by Shri Yashpal Goyal to do all acts on his behalf for the purpose of
import & Clearance of goods at the port of Ludhiana; Shri Love
Sharma is not reflected as importer in any Customs documents i.e.
High Seas Sale Invoice, High Seas Sale Agreement (AP 542595),
Declaration Forms; o payments pertaining to the Customs duty, the
port handling charges and Shipping line charges were made by him
and thirdly no email correspondence with the Shipping Line, Customs,
Port authorities has been made by him.
42. Learned authorised Representative submits that though Shri
Yashpal Goyal did not accept the ownership of the impugned goods,
he was asking for the provisional release of the goods; it means that
there was some interest/ benefit attached to it while making such
request before the authority; his seeking of the copies/ details of Bill
of entry taken for valuation purpose/ redetermination of value and
submission that valuation was wrongly arrived at is immaterial, as
the valuation of the goods was not for the purpose of charging duty;
however, value has been correctly done by following the customs
Valuation Rules 2007; duty involved in the case will only suffice the
purpose of quantifying the quantum of penalty; his request for re-
export was rightly not acceded as the import goods are prohibited
and have been imported illegally; though Shri Yashpal Goyal denied
having signed the High sea sales paper, Form -I etc, he has made his
39 C/60251/2022 & 07 others
IEC code available to be used by Shri Jatinder; it means the appellant
was agreeing on some account with the user.
Rebuttal of the submissions made on behalf of Sunil Kumar
(Appeal No. C/60264/2022)
43. Learned authorised Representative submits that Shri Sunil
Kumar provided the details viz. Bill of Entry No., IEC and port code
for the payment of the Customs duty amounting to Rs 5,94,672/-
against the Bill of Entry No. 2086929 dated 23.12.2020 to Shri Rajan
Arora; these details were provided to Sunil Kumar by Shri Love
Sharma, who asked him to pay the Customs duty amounting to Rs
5,95,000/- against the Bill of Entry No. 2086929 dated 23.12.2020 as
it was told that an amount of Rs 10,00,000/- was outstanding
amount that he owed to Shri Jatinder Kumar; he also requested Shri
Rajan Arora, Partner cum H-Card holder in M/s Sark Enterprises to
also pay the Shipping Line charges amounting to Rs 5,29,613.50 &
Rs 8,850 and HTPL port handling charges of Rs 80,942; against the
goods imported vide Bill of Entry No. 2086929 dated 23.12.2020. he
credited the amount to M/s Sark Enterprises instead of returning the
same to account of M/s Secon Logistics Pvt Ltd; it is evident from the
statement of Shri Sunil Kumar that he was also equal partner in
importing/ handling the import of the impugned goods as he was
having prior knowledge about the mis-declared goods by agreeing to
get involved in the payment chain and appeared instrumental in
getting the payments made in respect of import.
Rebuttal of the submissions made on behalf of Shri Love
Sharma (Appeal No. C/60263/2022)
40 C/60251/2022 & 07 others
44. Learned authorised Representative submits that Shri Yashpal
Goyal, proprietor of M/s Goyal Steel Industries gave his IEC details to
Shri Love Sharma for the purpose of import; Two bills of entry were
filed in the name of M/s Goyal Industries; yet Shri Yashpal Goyal and
Shri Love Sharma took no steps to ensure that only genuine imports
were made; Shri Yashpal Goyal authorised Shri Love Sharma to
further give Vakalatnama to advocate to advocate to appear before
authorities as per directions of Hon'ble Punjab & Haryana High Court ;
authority letter dated 22.10.2020 of M/s Goyal Steel Industries
authorised Shri Love Sharma to do all acts on his behalf for the
purpose of import & Clearance of goods at the port of Ludhiana; the
name of Love Sharma is not reflected as importer in any Customs
documents i.e. High Seas Sale Invoice, High Seas Sale Agreement
(AP 542595), Declaration Forms; Shri Love Sharma accepted that he
is an importer dealing in the import and trading of "Ferrous Scrap"
and had imported various consignments of "Heavy Melting Scrap" ;
substantial evasion by misdeclaration, is corroborated by statements
of co-Noticees, independent evidence, customs records, physical
examination reports, and forensic findings, which rendered the goods
liable for confiscation under Section 111 of the Customs Act; he
abetted Jatinder Kumar by making available IEC documents, of M/s
Goyal Steel Industries, which were misused by Shri Jatinder Kumar
for the purpose of smuggling dry dates; he also worked as a conduit
to Jatinder Kumar in passing on instructions for payment of Customs
duty, Shipping Line charges, port charges etc; Shri Love Sharm failed
to exercise due diligence and instead facilitated the fraudulent import
based on falsified documents; despite the fact that IEC was in the
41 C/60251/2022 & 07 others
name of Shri Goyal Industries, being authorized, Shri Love Sharma
stepped into the shoes of the importer; penalty under Section 117 is
rightly imposed on Shri Love Sharma.
Rebuttal of the submissions made on behalf of Shri Rajan
Arora (Appeal No. C/60262/2022)
45. Learned authorised Representative submits that Shri Rajan Arora
did not file any reply to the Show Cause Notice; he did not turn up for
personal hearing; as accepted by him on 23.02.2021 and
24.02.2021, he facilitated payment of the Customs duty, Shipping
Line charges and port handling charges, against the Bill of Entry No.
2086929 dated 23.12.2020 on 26.12.2020, through his IDBI Bank
Delhi, as per details provided by one Shri Sunil Kumar, Proprietor of
M/s KVR Enterprises; he made payments on behalf of M/s Goyal
Steel Industries by himself or through Sark Enterprises or Sark Cargo
Services LLP without knowing Shri Yash Pal or Shri Manish Kumar or
Shri Jatinder Kumar; though he stated that the same were to be
reimbursed to him at a later stage, he agreed to have involved in the
vicious payments chain; therefore, Penalty is rightly invoked under
Section 117 of the Customs Act,1962.
Rebuttal of the submissions made on behalf of Shri Suraj
Salaria and Shri Saurabh Kumar (Appeals No. C/60213,
60232/2022)
46. Learned authorised Representative submits that Shri Suraj
Salaria, in his statement on 28.12.2020, confessed that neither any
seal was cut nor containers were opened; yet he filed a report in the
EDI system that imported goods were found to be Light Melting
Scrap; Shri Saurabh Kumar stated that he believed the report of his
42 C/60251/2022 & 07 others
subordinate and had no reasons to doubt the same; both of them
blamed it on the heavy pressure of work; there is dereliction of duty
on the part of the appellants that have not performed the duty as per
the procedure and examination report was put in EDI system even
before examination or cutting the seals of the Containers. Both
appellants averred that notice under Section 155 of the Act was not
issued in time, that at the time of the cause of action, Covid
pandemic was at its peak; issue of time bar is not applicable in the
subject case as held in Golla Rama Rao 000(124) ELT 112 (Mad);
Hon'ble Supreme Court held in the case of Bhagavan Barik AIR 1987
SC 1265 that a thing shall be deemed to be done in good faith where
it is in fact done honestly whether negligently or not; the question of
good faith is one of fact; the concerned person should show that the
belief impugned in the statement had a rational basis and not just a
simple belief and therefore, simple or actual belief is not enough. He
submits that putting in EDI the remark, that Examination conducted
in front of Superintendent & CHA, even without completing
examination, by the Inspector an endorsement of the same by the
Superintendent, shows that the actions of the appellants were not
under any rational belief. He also relies on Hon'ble Supreme Court's
decision in the case of Manilal Dhiklal AIR 1964 SC 1983 and submits
that the appellant did not complete the examination despite of alert
issued; the appellants were not complying with Law and Procedures;
therefore, protection under Section 155 is not applicable. thus, Shri
Suraj Salaria, Inspector and Superintendent Shri Saurabh Kumar are
found liable for penalty under Section 117 of the Customs Act, 1962.
43 C/60251/2022 & 07 others
47. Heard both sides and perused the records of the case. The brief
issues that are required to be considered in this case are as follows:
(i) Whether ADG, DRI is competent to issue and order
extending the time period for issuance of show cause notice in terms
of Section 110(2) of the Customs Act, 1962.
(ii) Whether such notice issued by ADG, DRI becomes invalid
due to the non-mentioning of Document Identification Number (DIN).
(iii) Who is to be considered as an importer in the impugned
case? Whether the appellant-customs broker i.e M/s Secon Logistics/
its Director Shri Jatinder Kumar or M/s Goyal Steel Industries.
(iv) Whether imposition of penalties on different firms/
persons involved is justified in the facts and circumstances of the
case.
48. Coming to the issue at Sl. No.(i) above, we find that all the
appellants herein have advanced the plea that ADG, DRI issued a
letter/ order dated 24.06.2021 to extend the time limit for issuance
of show cause notice under the provisions of Section 110(2) and that
ADG, DRI is not a competent officer to issue the required extension in
terms of Section 110 of the Customs Act, 1962 and that only
adjudicating authority can grant such extension. We find that it will
be useful to have a look at the relevant provisions of the Statute in
this regard which are as follows:
SECTION 110(2). Where any goods are seized
under sub-section (1) and no notice in respect thereof is
given under clause (a) of section 124 within six months
of the seizure of the goods, the goods shall be returned
to the person from whose possession they were seized:
Provided that the Principal Commissioner of
Customs or Commissioner of Customs may, for reasons
to be recorded in writing, extend such period to a
44 C/60251/2022 & 07 others
further period not exceeding six months and inform the
person from whom such goods were seized before the
expiry of the period so specified:
Provided further that where any order for
provisional release of the seized goods has been passed
under section 110A, the specified period of six months
shall not apply.
49. We find that Notification No. 17/2002-Customs (N.T.) dated
07.03.2002 issued by the Central Government, superseded
Notification No. 19/90-Customs (N.T.) dated 26.04.1990. Vide the
said notification ADGs, ADDs/JDs and DDs/ADs of the DRI were
appointed as the Commissioners of Customs, AC/JC of Customs and
DC/AC of Customs respectively, for the territorial jurisdiction of the
whole of India. We also note that Notification No. 17/2002-Customs
(N.T.) dated 07.03.2002 was further amended vide Notification No.
82/2014-Customs (N.T.) dated 16.09.2014, issued by the Board, with
effect from 15.10.2014., where for the words "Commissioner of
Customs", the words "Principal Commissioner of Customs or
Commissioner of Customs" were substituted; and for the words
"Additional Director General", the words "Principal Additional Director
General or Additional Director General" were substituted. We find that
the effect of the above notifications is that the Additional Director
General, Directorate General of Revenue Intelligence posted at
Headquarters and Zonal/regional unit has been appointed as
Commissioner of Customs by the Central Government. We are of the
considered opinion that the ADG-DRI is empowered to extend the
time for issuance of SCN under Section 110 (2).
45 C/60251/2022 & 07 others
50. We find that Tribunal upheld this position in the case of Vikas
Ecotech Ltd. [2019 (369) E.L.T. 1158 (Tri. - Del.)]. The Bench finds
that:
6. It is the fact that in this case a seizure of the
imported goods has been affected vide seizure Memo
No. DRI/HQ/C-I/50D/INT/2018, dated 13-1-2018 at
Nhava Sheva after their detention vide the detention
Memo No. DRI, F.NO. DRI-1/HQ/CI/50D/INT/4/2018,
dated 19-1-2018. In this regard our attention was
drawn by the Ld. AR towards the Public Notice No.
2/2005, dated 5-8-2005 issued by this Tribunal.
Wherein it has been held as under;
"The Hon'ble President has been pleased to order
as follows:
The various Zonal Benches of this Tribunal have been
established to deal with the cases arising from the areas
over which such Zonal Benches have jurisdiction. While
the Principal Bench, New Delhi has jurisdiction all over
India, the administrative orders enabling the filing of
the matters falling within the jurisdiction of any of the
Zonal Benches in the Principal Bench have not proved to
be conducive to efficient administration since, often
matters are filed in the Principal Bench at the stage of
interim relief and waiver of deposits and later transfers
of such matters are sought to the Zonal Benches in
which they ought to have been filed.
On reconsideration of the matter and in supersession of
all the existing orders, it is hereby ordered that the
cases arising within the jurisdiction of the Zonal
Benches will be filed and heard before the respective
Zonal Benches."
7. Following the public notice (supra), in this case
the appropriate jurisdiction for filing appeal will be Zonal
Bench, Mumbai, where the cause of action has arisen as
the impugned order is passed by the Commissioner,
Nhava Sheva-III Port in the state of Maharashtra. The
appellant contention that the importer is Delhi based
and the searches have been conducted in their offices at
Delhi by DRI is of no consequence, as it is only follow
up searches after the goods were seized at Nhava
Sheva. No seizure has been affected within New Delhi,
giving cause to appeal before Delhi Bench of Tribunal.
The show Cause notice has been issued for the
extension of time for issuing of the show cause notices
in respect of goods seized at Nhava Sheva Mumbai, and
therefore, it will be the jurisdiction of Mumbai Bench to
46 C/60251/2022 & 07 others
deal with the appeal filed against the Order passed by
the Commissioner in the instant case.
8. As far as the issue of SCN for extension of
time by the DRI (HQ) Delhi is considered, is seen that
the DRI Officer have been conferred with the power of
Customs Officer under Section 4 of the Customs Act and
hence they are competent to issue SCN, on that ground
of having conferred all India jurisdiction. As far as the
order of Hon'ble Calcutta High Court in case of Navneet
Kumar v. Union of India & Others in W.P. No. 3336(w)
of 2018 is concerned, the same stand modified by the
order of Division Bench in the matter of Director
General of Revenue Intelligence v. Navneet Kumar, MAT
844 of 2018 within CAN 7965 of 2018, wherein the
operation of the order of Ld. Single Judge has been
modified as under;
"Appreciating the above prima facie case made out by
the appellant no effect will be given to any finding in the
impugned order that would divest the Directorate of
Revenue Officer of power to function as Customs Officer
or to investigate the case and issue and adjudicate
Show Cause Notice for concentration of relevant law."
9. We, therefore, hold that SCN has been issued
correctly by the DRI, and is not without jurisdiction.
51. We further find that vide Notification 17/2002-Cus (N.T) dated
07.03.2002 issued under the provisions of the section 4 of the
Customs Act, 1962, Central Government has inter-alia, appointed the
Additional Director General, Directorate General of Revenue
Intelligence to be the Commissioner of Customs for the whole of
India. Further, by this Notification, the Central Government has
appointed Additional Directors, or Joint Directors, of Directorate of
Revenue Intelligence posted at Headquarters and Zonal/Regional
units as the Additional Commissioners or Joint Commissioners of
Customs; and also that the Deputy Directors, or Assistant Directors,
of Directorate of Revenue Intelligence posted at Headquarters and
Zonal/Regional units have been appointed as the Deputy
47 C/60251/2022 & 07 others
Commissioners or Assistant Commissioners of Customs for the whole
of India.
52. We find that the above position was put forth before the
Hon'ble High Court of Chhattisgarh in the case of Deputy Director,
Directorate of Revenue Intelligence (DRI), Chhattisgarh Vs Vijay Baid
@ Vicky - 2025 (392) E.L.T. 603 (Chhattisgarh) and the Hon'ble High
Court has accepted the submissions. It was submitted as follows:
The DRI officers are customs officers, and DRI
itself is not a separate department but is a Directorate
functioning under the administrative control of the
Central Board of Indirect Taxes and Customs (erstwhile
Central Board of Excise and Customs). DRI officers have
always been appointed as the officers of Customs under
Section 4(1) of the Act. This has been done through a
series of Notifications issued by the Central Government
(till 11-5-2002, and by the Board afterward) right from
1-2-1963 to 16-9-2014. The relevant Notifications in
chronological order, are as under :
"(i) Notification No. 37/F. No. 4/1/63-CAR.,
dated 1-2-1963, issued by the Central Government,
vide which the Director, Directorate of Revenue
Intelligence was appointed as Collector of Customs;
(ii) Notification No. 38/F. No. 4/1/63-CAR.,
dated 1-2-1963, issued by Central Government, vide
which all officers of the Directorate of Revenue
Intelligence were appointed as officers of Customs;
(iii) Notification No. 186/F. No. 437/3/79-Cus.
IV, dated 4-8-1981, issued by Central Government, vide
which different classes of officers of DRI, were
appointed as Collectors, Deputy Collectors and Assistant
Collectors of Customs with respect to defined territorial
jurisdictions;
(iv) Notification 7-7-1997 issued No. by
31/1997-Cus. (N.T.), dated the Central Government,
superseded Notification No. 38/63, dated 1-2-1963.
Vide the Notification dated 31/1997, dated 7-7-1997, in
Point No. 04 it is explicitly mentioned that all officers of
Directorate of Revenue Intelligence officers are officers
of Customs, the same is reproduced as under :-
"Supersession of the Notification No. 38/63-Cus. -
Appointment of Custom Officers. In exercise of the
powers conferred by sub-section (1) of section 4 of the
48 C/60251/2022 & 07 others
Customs Act, 1962 (52 of 1962) and in supersession of
the notification of the Government of India in the
Ministry of Finance (Department of Revenue) No.
38/63-Customs, dated 1st February, 1963 the Central
Government hereby appoints the following persons to
be the Officers of Customs, namely :-
(1) to (3) xx xx xx
(4) All Officers of the Directorate of Revenue
Intelligence."......
(v) Notification No. 17/2002-Customs (N.T.),
dated 7-3-2002 issued by the Central Government,
superseded Notification No. 19/90-Customs (N.T.),
dated 26-4-1990, vide which ADGs, Additional/Joint
Directors and Deputy/Assistant Directors of the DRI
were appointed as the Commissioners of Customs,
Additional/Joint Commissioners of Customs and
Deputy/Assistant Commissioners of Customs
respectively, for the territorial jurisdiction of the whole
of India. The said Notification came into force with
effect from 25-10-2002 vide Notification No. 63/2002-
Customs (N.T.), dated 3-10-2002.
(vi) Notification No. 82/2014-Customs (N.T.),
dated 16-9-2014, issued by the Board, vide which
certain amendments were carried out in Notification No.
17/2002-Customs (N.T.), dated 7-3-2002 with effect
from 15-10-2014."
6. Therefore, it is clear that Principal Additional
Director General and Deputy Director of DRI, who are
customs officers, and thus empowered to dispense the
functions in relation to Section 110(2) and Section 105
of the Act. Hence, there was no infirmity in the present
case in extension of issuance of notice by the period of
further six months and initiation of the search
proceedings by DRI. Further the seizure in the instant
case has been made by a Customs officer who is
undisputedly the proper officer even if the ratio of
Canon India judgment is applied.
53. In view of the above, we find that though the power of ADG-
DRI to issue an order or notice to extend the time period of six
months to issue a show cause notice in respect of the seized goods, it
has been held by the Courts and Tribunals that such an order is
quasi-judicial in nature and not an administrative measure and is
appealable in terms of Section 129A of the Customs Act, 1962,
49 C/60251/2022 & 07 others
meaning thereby that the order should be a speaking order passed
after affording opportunity to the concerned parties to defend
themselves in the interest of natural justice. Tribunal held in the case
of Vaibhav Textiles - 2001 (132) E.L.T. 678 (Tri. - Del.) as follows:
8. The bare perusal of the proviso to Section 110(2) of
the Customs Act shows that extension of time for
serving show cause notice to the importer/owner for
confiscation of the goods can be allowed only on
sufficient cause. This proviso contemplates some sort of
enquiry. Therefore, the Commissioner is expected not to
pass extension order mechanically or as a matter of
routine, but only on being satisfied that there existed
facts which indicated that investigation could not be
completed for bona fide reasons within the stipulated
time. In the absence of extension of time, the
importer/owner of the goods becomes entitled to
release of the goods immediately under sub-section (2)
of Section 110 of the Customs Act. Therefore, discretion
under proviso to this sub-section for extending time for
issuing show cause notice has to be exercised by the
Commissioner judiciously after examining the material
placed before him as his order extending the time would
be affecting adversely the valuable right of the
importer/owner of the goods who becomes entitled to
receive back the goods if no notice within the stipulated
period of six months from the date of seizure of the
goods had been served on him.
9. The Apex Court in Assistant Collector of Customs &
Superintendent, Preventive Service Customs, Calcutta
and Others v. Charan Das Malhotra (supra) has draw a
fine distinction between judicial and administrative
functions of the Customs Officers under the Customs
Act as under: -
"The dividing line between judicial and administrative
functions is thin and gradually evaporating and the
functions performed by those doing judicial and
administrative functions have the same object, namely,
to do justice and deciding the question fairly and justly
where the rights of citizens are affected to their
prejudice. In the former case, there would be express
rules of procedure but the object of these rules is only
to enable or facilitate to decide fairly and justly."
That was also a case where seizure of the goods was
made under Section 110 of the Customs Act and the
arose as to whether the extension of time could be
allowed by the Commissioner in routine without
50 C/60251/2022 & 07 others
applying his mind and without hearing the owner of the
goods. The Apex Court while drawing distinction
between the judicial and the administrative functions of
the Customs Officers was pleased to observe as under:-
"Since the power of extension was quasi-judicial
and required judicial approach and would deprive the
person from whom the goods are seized of the right to
have the goods restored to him on the expiry of six
months from the date of seizure, the opportunity of
being heard must be given before passing an order in
both the cases."
The Apex Court further also observed that, "if the
investigation could not be completed for bona fide
reasons within the time laid down in Section 110(2) of
the Customs Act and the extension of period became
necessary the burden of proof is clearly on the Customs
officer applying for extension and not on the person
from whom the goods are seized. No extension of time
for retention of seized goods could be granted without
sufficient cause and without opportunity of being heard
to the person whose goods were seized."
10. Similarly, the Calcutta High Court in Kantilal
Somchand Shah & Another (supra) in an identical case
of seizure of the goods under Section 110(2) of the
Customs Act had observed as under :
"The quasi-judicial authorities exercising statutory
powers, cannot act contrary to the law nor can they
take advantage of their own illegality. The court further
observed that since the provisions of Section 110(2) of
the Customs Act are mandatory, therefore, the goods
retained unlawfully cannot be confiscated without
contravening the mandatory provisions of the section. A
show cause notice for confiscation of the goods had to
be given to the owner within six months which cannot
be extended without giving opportunity of being heard
to the owner failing which the goods are liable to be
returned to him. "
11. The Tribunal also in a similar case of seizure of the
goods under Section 110(2) of the Customs Act where
extension of period was also sought under proviso to
that section had held that an order passed under
proviso to Section 110(2) of the Customs Act for
extension of time for issuance of the show cause notice
in respect of the seized goods is appealable under the
provisions of clause (1) (a) of Section 129A ibid.
12. The observations of the Apex Court in anti-
dumping case (Designated Authority v. Haldor Topsoe)
supra, wherein investigation is required to be completed
within one year, that extension of such a period is only
administrative decision-based exigency of the case, are
51 C/60251/2022 & 07 others
in fact not all applicable to the present case. The power
of the designated authority in an anti-dumping matter
to extend the period for completion of investigation
cannot be equated with that of the Commissioner under
proviso to sub-section 110(2) of the Customs Act as the
power by the latter has to be exercised judiciously on
examination of material placed before him. There is no
question of his subjective satisfaction because he has to
determine that the cause shown before him warranted
extension of time. The Commissioner has no power to
allow the extension of time on the expiry of initial period
of six months for serving show cause notice for the
confiscation of the goods on the owner without affording
opportunity of hearing to the person from whose
custody the goods were seized, as observed in the
above referred case by the Apex Court.
54. The letter/ communication dated 24.06.2021 is extracted
below:
55. On going through the above letter/ communication, it is clear
that it is neither speaking nor a well-reasoned order. The only reason
spelt out was that the delay occurred due to ongoing Pandemic.
Taking into account the fact that the entire investigation till the issue
of final show cause notice occurring during the currency of the
Pandemic, the reason put forth for extending the period does not
52 C/60251/2022 & 07 others
appear to be substantiated. Moreover, we find, on-going through the
show cause notice, that no worthwhile investigation, which could
have a serious bearing on the case, appears to have been conducted
after the issuance of the extension.
56. Now, we turn our attention to the second issue raised by the
appellants that is about the non-mentioning of DIN in the said order
extending the time period for issuance of show cause notice under
Section 110. We find that the appellants submit that Customs Act,
1962 is a special statute and special powers are given to the
Customs/D.R.I. officials; that the Central Board of Indirect Taxes and
Customs (CBIC), in order to increase transparency and accountability
in the administration as well as during investigation, vide Circular No.
37/2019 dated 05th November, 2019, have introduced a system for
electronic (digital) generation of a Document Identification Number
(DIN); as per the Circular, pre-generation of Document Identification
Number (DIN) was mandatory before issuance of any communication.
They submit that it was also clarified that if DIN is not generated,
subjected to exceptions, then the said documents issued without DIN
shall be treated as invalid and shall be deemed to have never been
issued; it was further specified, vide Circular No. 43/2019-Customs,
that the DIN is mandatory for all search authorizations, summons,
arrest memos, inspection notices etc.
57. We find that Circular No.37/2019 stipulates at Paras 3,4 & 5 as
follows:
3. Whereas DIN is a mandatory requirement, in
exceptional circumstances communications may be
53 C/60251/2022 & 07 others
issued without an auto generated DIN. However, this
exception is to be made only after recording the reasons
in writing in the concerned file. Also, such
communication shall expressly state that it has been
issued without a DIN. The exigent situations in which a
communication may be issued without the electronically
generated DIN are as follows:-
(i) when there are technical difficulties in
generating the electronic DIN, or
(ii) when communication regarding
investigation/enquiry, verification etc. is required to
issue at short notice or in urgent situations and the
authorized officer is outside the office in the discharge
of his official duties.
4. The Board also directs that any specified
communication which does not bear the electronically
generated DIN and is not covered by the exceptions
mentioned in para 3 above, shall be treated as invalid
and shall be deemed to have never been issued.
5. Any communication issued without an electronically
generated DIN in the exigencies mentioned in paras 3
above shall be regularized within 15 working days of its
issuance, by:
(i) obtaining the post facto approval of the
immediate superior officer as regards the justification of
issuing the communication without the electronically
generated DIN;
(ii) mandatorily electronically generating the DIN
after post facto approval; and
(iii) printing the electronically generated pro-forma
bearing the DIN and filing it in the concerned file.
58. We find that the above order does not mention DIN. It also
does not cite any reasons for not mentioning the same due to
exceptional circumstances, if any, that existed. This Bench having
called for the original file of the DRI and upon scrutiny, could not find
any reasons given to that effect. We find that the directions given by
CBEC, now CBIC, are mandatory for the field officers and the same
have to be complied. We further find that the officers are required to
perform as per the law and procedure laid down. We particularly note
that in this regard the circulars issued by CBIC make it categorically
54 C/60251/2022 & 07 others
clear that any orders, communications, notices etc. issued without
the DIN are to be treated to be invalid. The circulars also provide that
in case the DIN is not mentioned, the circumstances under which it
was not done need to be mentioned and the DIN may be created and
communicated in some special cases within 15 days of the said
communication. We find that not only the circumstances under which
DIN was not mentioned in the communication are recorded nor the
DIN was supplied within 15 days of the issuance of the
communication. We find that these instructions are general in nature
and prescribe the administrative procedure to be followed by officers
to bring in the transparency in their working. These are not binding in
Quasi-Judicial proceedings. We find that there is no such provision in
Section 110 so as to hold that the proceedings are vitiated.
Therefore, we are of the considered opinion that the contravention of
the same and non-mentioning of DIN in itself does not nullify the
order issued, as there is no express provision in the Law.
59. Now, we take up the issue on merits as to whether who is the
importer in the impugned case; whether Secon Logistics, the custom
broker - appellant or M/s Goyal Steel Industries, the IEC holder. We
find that the impugned order holds that Shri Jatinder Kumar was in
charge of and in control of goods imported vide Bills of Entry No.
2086929 dated 23.12.2020 and No. 2103144 dated 24.12.2020; IEC
AKOPP3397B of M/s Goyal Steel Industries and IEC ARDPK9716F of
M/s Raghav Alloys and Metals was misused by him for the purpose of
smuggling dry dates in guise of Light Melting Scarp by forging the
necessary documents like High Seas Sale Agreement (AP 542595),
55 C/60251/2022 & 07 others
Form-A, Declaration Form and High Seas Sale Invoice; he also made
arrangements for payment of Customs duty, Shipping Line, port
handling charges etc; therefore, in terms of provisions of Section 2
(3A) & Section 2 (26) of the Customs Act, 1962 Jatinder Kumar is the
beneficial owner and importer of the goods.
60. We find that the impugned order confirms that M/s Secon
Logistics, the Customs Broker and their Director, Shri Jatinder Kumar
was the importer; Shri Jatinder Kumar masterminded the import of
dry dates in the guise of Heavy Melting Scrap; he managed to get the
IEC of M/s Goyal Industries through Shri Love Sharma; arranged for
payment of Customs duties, freight charges and port charges etc
through unconnected people and liaised with the shipping lines. We
find that the evidence put forth by the investigation is in the form of
statements by the co-accused and the emails and the forensic report
that the High Sea Sale papers were not signed by Shri Yashpal Goyal.
56. In their defence the appellants submit the following.
entire case is made on the basis of contradictory statements by
Shri Yashpal Goyal of M/s Goyal Steel Industries;
Shri Yashpal stated initially on 19.03.2021 that he had
knowledge regarding import of Scrap and that he signed the
documents; however, in his statement dated 26.03.2021,
changed his version later;
DRI Officers did not record statement of any person including
the Importer, their Authorized representative immediately on
detection of the fraud till January 2020, though they were IEC
Holders;
56 C/60251/2022 & 07 others
Shri Love Sharma, in his statement dated 26.02.2021, admitted
that the he got the documents for import of Light Melting Scrap
signed by Shri Yashpal Goyal; this establishes the fact that the
entire documentation originated from and was executed by the
importer;
Shri Yashpal Goyal/ M/s Goyal Industries filed Writ Petitions,
No. 20282 of 2021 and No. 2103144 dated 24.12.2020, before
the Hon'ble Punjab & Haryana High Court, claiming ownership
of the impugned goods and requesting for provisional release of
the same; it is surprising that the DRI did not even file a
counter to the petition; DRI did not even verify as to who
purchased the stamp papers for the High Sea Sales agreement
from which Notary; any such enquiry with the Notary could
have easily revealed who purchased them as the Notary is
supposed to maintain a Register for this purpose.
even after the issuance of Show Cause Notice, Shri Yashpal
Goyal/ M/s Goyal Industries, vide written reply, requested for
release of the goods, ostensibly to buy peace, and raised
objections on the valuation of the goods.
though Shri Yashpal Goyal denied that the signatures appended
on the import documents and HSS documents, he did not
confirm that the same were forged by Shri Jatinder Kumar;
Similarly, forensic laboratory reports say that signatures
appended on the import documents and HSS documents are
not of Shri Yashpal Goyal, they did not confirm that they are of
Shri Jatinder Kumar;
57 C/60251/2022 & 07 others
Shri Manoj Verma, Senior General Manager of M/s MSC
Mediterranean Shipping Company, stated that the containers for
import of Light Melting Scrap were booked by M/s AEGON
Shipping LLC, Dubai on behalf of the Shipper M/s Sama Al
Jazeera Auto Used Spare Parts TR. LLC, Dubai;
Investigation concluded that M/s Raghav Alloys & Metals was
not in existence, contrary to the evidence available and without
conducting further investigation.
the allegation as alleged in the Show Cause Notice for making
payments in respect of Customs Duty and/or any other charges
by the Noticee are factually in correct in so far the Customs
Duty as well as other charges were paid by M/s Sark
Enterprises, New Delhi where the Authorized representative has
categorically admitted that the said payments were made on
the directions of Shri Sunil Kumar Proprietor of M/s KVR
Enterprises and Shri Jatinder Kumar was not even known to
him.
The Adjudicating Authority acknowledges and records while
discussing the Role of Shri Yashpal Goyal that he was ready and
willing to get the goods cleared upon payment of appropriate
Customs Duty, Redemption Fine as adjudicated upon in terms
of the provisions of Customs Act, 1962, in order to buy peace
and settle the case and buy peace and avoid further multiple
litigation.
The impugned Show Cause Notice was based on the statement
of various persons, including Shri Yashpal Goyal and Shri Love
Sharma, who on the one hand claimed the title of goods and on
58 C/60251/2022 & 07 others
the other have given contrary statement against Shri Jatinder
Kumar; as the stand taken was contradictory, it was required to
allow cross examination of the Co-Noticees, particularly, Shri
Love Sharma, in terms of Section 138 B of the Customs Act,
1962 the cross examination of the witness whose statement
has been recorded has to be granted.
Importers of "Light Melting Scrap" need to register themselves
with the Director General of Foreign Trade ( DGFT), on "Steel
Importing Monitoring System", giving all particulars, for each
and every import, before filling of the Bill of Entry and
clearance, in terms of Notification No. 17/2015-2020 dated
05.09.2019; the said registration can only be done with the
help of an OTP received on the Phone Number of the Importer;
in respect of goods imported by M/s Goyal Industries
registration was done with the help of the Digital Signatures
and in respect of imports made by M/s Raghav Industries, the
same was done with the help of OTP received on their
registered Mobile Numbers.
61. We find on going through the records of the case that the
anomalies/ inadequacies/questions, arising as above, are neither
addressed nor answered either by the investigation or the impugned
order. We find that the investigation and the impugned order come to
the conclusion that M/s Secon Logistics/ Shri Jatin Kumar is the
beneficial importer. We find that Section 2(26) defines importer as
follows.
Sec 2 (26) ―importer- in relation to any goods at
any time between their importation and the time when
59 C/60251/2022 & 07 others
they are cleared for home consumption, includes any
owner, beneficial owner or any person holding himself
out to be the importer;
Sec 2(3A) ―beneficial owner means any person on
whose behalf the goods are being imported or exported
or who exercises effective control over the goods being
imported or exported.
62. We find that it is required to analyze the facts of the case vis-
a-vis the definition as above. The impugned order holds that M/s
Secon Logistics/ Shri Jatinder Kumar was the beneficial owner.
Though, the word "owner" is not defined in Customs Act, beneficial
owner is defined to be a person who exercises effective control over
the goods being imported or exported. We find that other than
alleging, though, on the basis of statements recorded, that the said
appellants had managed to get documents for import; customs duty
payment through another customs broker and liaised with the
shipping agents regarding the consignment in question, it is not
evidenced as to how the appellants were exercising effective control
over the goods. It is not the case of the Department that the
appellants have paid for the consignment to the foreign exporter;
arranged for shipping from overseas port to ICD, Ludhiana, arranged
for trucks for removal of goods after the customs clearance. In fact,
we find that the investigation could not identify as to who placed the
order on the foreign exporter and as to who made the payment and
the mode of payment thereof.
63. We are of the considered opinion that unless the pecuniary
involvement of the appellants is established in the impugned import,
allegation of being a beneficial owner cannot be sustained just
60 C/60251/2022 & 07 others
because of the allegation that they have managed documents,
managed payments towards duty and were in correspondence with
the shipping agents. Coming to the allegation of managing the
documents, the allegation is on the basis of retracted statements of
Shri Yashpal Goyal and the report of the forensic laboratory that the
signatures available on the documents were not of Shri Yashpal
Goyal. Neither did Shri Yashpal Goyal said that the appellant -
customs broker has forged the documents nor the forensic reports
indicated that the signatures were of the appellant customs broker.
We find that the investigation was happy to the extent of proving that
the signatures were not of Shri Yashpal Goyal and did not make any
efforts to conclusively prove that the signatures were of the appellant
- customs broker or any of his employees. Thus, the allegation of
forging/ managing documents by the appellant - customs broker is
but an empty assertion. It is on record that Shri Yashpal Goyal stated
that he has signed the import documents on the request of Shri Love
Sharma for import of steel melting scraps. Shri Love Sharma has also
confirmed that he has handed over the said documents to the
appellant - customs broker, though, Shri Yashpal Goyal has changed
his version subsequently. Shri Manish Kumar, Proprietor, M/s Raghav
Alloys & Steels stated that he handed over the High Seas Sale
agreement in respect of the Bill of Entry No. 2086929 dated
23.12.2020.
63.1. Coming to the issue of payments on account of customs duty,
port handling charges, custodian charges etc., it is alleged that the
appellant - customs broker has managed payments through M/s Sark
Enterprises. The versions of different persons involved differ in the
61 C/60251/2022 & 07 others
matter. Shri Rajan Arora, Partner of M/s Sark Enterprises, stated on
23.02.2021, that he has paid the Customs duty amounting to Rs.
5,94,672/- as per the request of Shri Sunil Kumar, Proprietor of M/s
KVR Enterprises, Ludhiana. We find that the role of Shri Sunil Kumar
has not been investigated thoroughly and the reason as to why he
made payments for the impugned import through M/s Sark
Enterprises is not well established and the investigation ended with
questioning the concerned as to why they did not refund Rs. 10 Lakhs
to the appellant - customs broker and as to why they made
payments in respect of the impugned goods. We find that the
impugned order comes to the conclusion that since the appellant paid
duty, he must be regarded as the importer, as per Section 47 (2) of
the Customs Act, 1962. Shri Rajan Arora accepted that the payments
were made through M/s Sark Enterprises or Sark Cargo Services LLP
on instructions from Sunil Kumar, Proprietor, M/s KVR Enterprises,
Ludhiana. If the ownership of the goods is to be decided by the
reason that the duty was paid, there is no reason as to why M/s Sark
Enterprises could also have been regarded as the importer.
63.2. Coming to the allegation that M/s Secon Logistics/ Shri Jatinder
Kumar were in touch with the shipping agent, regarding the imported
consignments, through their official/ personal mail and this
establishes the control that the appellant - customs broker exercised
on the imported goods, we have gone through the e-mails and find
that the gist of the E-mails were to ask/inform 'Please file IGM
HTPL(INQR H6) subject B/L' and ' Please find below payment details
against subject shipments' .The said e-mails appear to be the routine
e-mails exchanged by any customer broker for the clearance of goods
62 C/60251/2022 & 07 others
and as such, they do not constitute any incriminating information
against the appellant - customs broker.
63.3. The appellant - customs broker submitted that they did not
sign the request letter for out of charge of the consignment imported
vide Bill of Entry No. 2086929 dated 23.12.2020. We further find that
Bodhraj Sharma, Senior Manager of the Custodian Hind Terminal
Private Limited, stated on 27.01.2021 that the due procedures had
not been followed as the goods in question were given Out of Charge.
We find that no action was proposed against the custodian for the
violation inasmuch as they also did not inform the concerned
authorities the fact that the customs' seals in respect of the goods as
above were intact and were not broken, though, they have noticed
the same.
63.4. We further find that the M/s Secon Logistics and Shri Jatinder
Kumar submit that the importers of "Light Melting Scrap" need to
register themselves with the Director General of Foreign Trade (
DGFT), on "Steel Importing Monitoring System", giving all particulars,
for each and every import, before filling of the Bill of Entry and
clearance, in terms of Notification No. 17/2015-2020 dated
05.09.2019; the said registration can only be done with the help of
an OTP received on the Phone Number of the Importer; in respect of
goods imported by M/s Goyal Industries registration was done with
the help of the Digital Signatures and in respect of imports made by
M/s Raghav Industries, the same was done with the help of OTP
received on their registered Mobile Numbers. They also submit that
similarly, the importers of steel scrap are required to obtain clearance
63 C/60251/2022 & 07 others
from Pollution Control Board (PCB). We find that the Investigation, at
the end of DGFT or PCB, which could have thrown light on as to who
were the real importers, was not done.
63.5. Shri Secon Logistics/Shri Jatinder Kumar submit that they have
not been accorded permission to cross-examine the co-Noticees i.e.
Shri Love Sharma, Shri Yashpal Goyal, Shri Sunil Kumar, Shri Rajan
Arora, Shri Saurabh Kumar, Superintendent of Customs and Shri
Suraj Salaria Inspector of Customs & experts of FSL, Mohali and IAFL
Mohali. They submit that such refusal is in violation of principles of
Natural Justice. We find that the investigation relies heavily on the
statements of other co-accused in the instant case. We find that
though the statements given, by various persons involved, were
contradictory/ conflicting, the investigation did not question them
again to get clarification or they have not recorded joint statements,
cross-positioning one another. Therefore, it was imperative on the
part of the adjudicating authority that an opportunity to cross-
examination should have been given to the appellant - customs
broker. We find that Hon'ble High Courts, in the cases of J & K
Cigarettes Vs Collector of Central Excise - 2009-SCC-Online-Del-
2645; Basudev Garg Vs Commissioner of Customs -2013-SCC-Online-
Del-1447; Ambika International Vs UOI - 2016-SCC-Online-P&H-
4559 & Flevel International - 2016 (332) ELT 416 (Del.), held that
principles of natural justice are violated in not granting the cross-
examination of witnesses.
64 C/60251/2022 & 07 others
63.6. Further, we find that not only the cross-examination was not
allowed before considering the statements, given under section 108
of the Customs Act, for arriving at the conclusion, the procedure
contemplated under section 138B of the Customs has not been
followed. Such statements could not have been relied upon as the
procedure contemplated under section 138B of the Customs Act was
not followed. This is what was held by the Tribunal in M/s. Surya
Wires Pvt Ltd. vs. Principal Commissioner, CGST, Raipur (Excise
Appeal No. 51148 of 2020 decided on 01.04.2025). The Tribunal
examined the provisions of sections 108 and 138B of the Customs Act
as also the provisions of sections 14 and 9D of the Central Excise Act,
1944 and observed as follows:
"21. It would be seen section 14 of the Central Excise Act
and section 108 of the Customs Act enable the concerned
Officers to summon any person whose attendance they
consider necessary to give evidence in any inquiry which
such Officers are making. The statements of the persons so
summoned are then recorded under these provisions. It is
these statements which are referred to either in section 9D
of the Central Excise Act or in section 138B of the Customs
Act. A bare perusal of sub-section (1) of these two sections
makes it evident that the statement recorded before the
concerned Officer during the course of any inquiry or
proceeding shall be relevant for the purpose of proving the
truth of the facts which it contains only when the person who
made the statement is examined as a witness before the
Court and such Court is of the opinion that having regard to
the circumstances of the case, the statement should be
admitted in evidence, in the interests of justice, except
where the person who tendered the statement is dead or
cannot be found. In view of the provisions of sub-section (2)
of section 9D of the Central Excise Act or sub-section (2) of
section 138B of the Customs Act, the provisions of sub-
65 C/60251/2022 & 07 others
section (1) of these two Acts shall apply to any proceedings
under the Central Excise Act or the Customs Act as they
apply in relation to proceedings before a Court. What,
therefore, follows is that a person who makes a statement
during the course of an inquiry has to be first examined as a
witness before the adjudicating authority and thereafter the
adjudicating authority has to form an opinion whether having
regard to the circumstances of the case the statement should
be admitted in evidence, in the interests of justice. Once this
determination regarding admissibility of the statement of a
witness is made by the adjudicating authority, the statement
will be admitted as evidence and an opportunity of cross-
examination of the witness is then required to be given to
the person against whom such statement has been made. It
is only when this procedure is followed that the statements
of the persons making them would be of relevance for the
purpose of proving the facts which they contain."
..............................................................................
"28. It, therefore, transpires from the aforesaid decisions that both section 9D(1)(b) of the Central Excise Act and section 138B(1)(b) of the Customs Act contemplate that when the provisions of clause (a) of these two sections are not applicable, then the statements made under section 14 of the Central Excise Act or under section 108 of the Customs Act during the course of an inquiry under the Acts shall be relevant for the purpose of proving the truth of the facts contained in them only when such persons are examined as witnesses before the adjudicating authority and the adjudicating authority forms an opinion that the statements should be admitted in evidence. It is thereafter that an opportunity has to be provided for cross-examination of such persons. The provisions of section 9D of the Central Excise Act and section 138B(1)(b) of the Customs Act have been held to be mandatory and failure to comply with the procedure would mean that no reliance can be placed on the statements recorded either under section 14D of the Central Excise Act or under section 108 of the Customs Act. The Courts have also explained the rationale behind the 66 C/60251/2022 & 07 others precautions contained in the two sections. It has been observed that the statements recorded during inquiry/investigation by officers has every chance of being recorded under coercion or compulsion and it is in order to neutralize this possibility that statements of the witnesses have to be recorded before the adjudicating authority, after which such statements can be admitted in evidence. 63.7. In view of the above, we find that the allegation of having effective control, against M/s Secon Logistics/ Shri Jatinder Kumar has not been substantiated and therefore, the charge of them being beneficial owner cannot be upheld. It is not proved conclusively that M/s Secon Logistics/ Shri Jatinder Kumar have forged the documents as the investigations stopped at proving that the signatures on the documents in question were not of Shri Yashpal Goyal and did not proceed further to find out as to who signed them and as to whether Shri Jatinder Kumar forged/signed them. Therefore, the penalties imposed under Sections 112, 114A and 114AA on M/s Secon Logistics/ Shri Jatinder Kumar cannot be upheld. However, we find that the role of Shri Jatinder Kumar/ M/s Secon Logistics in the import of dry dates mis-declared as light melting scrap cannot be ignored at least as far as allowing the payment of duty for one of the impugned consignments through some other broker i.e. M/s Sark Enterprises instead of asking the importer to pay or pay themselves as agents and for not maintaining proper records of the importer, who is claimed to have entrusted the work relating to customs clearance to them. However, as no other penalty is proposed or imposed on them, we cannot go beyond the four corners of the Show 67 C/60251/2022 & 07 others Cause Notice. We find that the impugned order is not sustainable as far as M/s Secon Logistics/ Shri Jatinder Kumar are concerned.
64. We find, more importantly, that the investigation conveniently ignored the first part of the definition of the importer which holds that the importer means "any person holding himself out to be the importer". It is interesting to note that even though Shri Yashpal Goyal/ M/s Goyal Steel Industries have claimed ownership of the goods, such claim was neither negated nor considered either by the investigation or by the impugned order. It is further intriguing to note that for about two to three months after the fraud was detected by DRI, the person/ firm whose IEC was used and in whose name the imports were made were not questioned and their initial claim that they have supplied the IEC details, Form-A etc. to Shri Love Sharma and relied upon heavily their later version and the fact that the documents were not signed by Shri Yashpal Goyal. It is on record that Shri Yashpal Goyal/ M/s Goyal Steel Industries/ Shri Love Sharma have approached the Hon'ble Punjab & Haryan High Court with two Writ Petitions No. 20282 of 2021 and No. 2103144 dated 24.12.2020 claimed ownership of the goods and requested for permission to re-export the impugned goods. It is on record that DRI did not oppose the petitions before the Hon'ble High Court. However, in terms of the directions given by the Hon'ble High Court a speaking order dated 20.10.2021 was issued to M/s Goyal Steel Industries replying firstly that DRI has jurisdiction to investigate the case, secondly, that the investigation is under progress; M/s Raghav Alloys, the High Seas Seller does not exist as the Proprietor Shri Manish 68 C/60251/2022 & 07 others Kumar was only an employee of the appellant - customs broker and thirdly that the impugned goods are prohibited for violation of Plant Quarantine Order, 2003.
64.1. We also find that M/s Goyal Steel Industries Ltd. have also written letters dated 29.01.2021 & 07.02.2021 requesting the Commissioner to accord provisional release of the goods in terms of Section 110A of the Customs Act, 1962. The impugned order records the submission that the non-clearance of the imported alleged mis declared goods are subject to Ground Rent and Demurrage Charges, which are legally recoverable from the Noticee since the Bill of Entry has been filed in the name of the Noticee; the Adjudicating Authority may proceed to compute the applicable Customs Duty in order to avoid recurring demurrage and detention charges for which the appropriate authorities shall take legal action of recovery; further, in the alternative the goods may be permitted to be re-exported back to its Country of Origin. We find that the impugned order does not reject the claim of the appellants to be the owner of the imported goods. We are of the considered opinion that the claim of Shri Yashpal Goyal/ M/s Goyal Steel Industries could not have been rejected by the adjudicating authority in view of the definition of the word "Importer". We further find that the Learned authorised Representative submits that though Shri Yashpal Goyal did not accept the ownership of the impugned goods, he was asking for the provisional release of the goods; it means that there was some interest/ benefit attached to it while making such request before the authority; his seeking of the copies/ details of Bill of entry taken for 69 C/60251/2022 & 07 others valuation purpose/ redetermination of value, and submission that valuation was wrongly arrived at is immaterial, as the valuation of the goods was not for the purpose of charging duty. This shows that the department accepts that Shri Yashpal Goyal/M/s Goyal Steel Industries had some interest in the consignment. 64.2. It is not understood as to why the Revenue proceeded to allege and confirm that M/s Secon Logistics/ Shri Jatinder Kumar was the beneficial owner instead of treating Shri Yashpal Goyal/ M/s Goyal Steel Industries as the importers, more so, when they have claimed to be importers not once but twice and also before the Hon'ble High Court in a sworn affidavit. We find that as the show cause notice does not allege that Shri Yashpal Goyal/ M/s Goyal Steel Industries are the importers, we cannot go beyond the Show Cause Notice and hold that Shri Yashpal Goyal/ M/s Goyal Steel Industries are the importers. We find that having permitted the use of their IEC number and having given import documents like Form-A and for the reasons discussed above and in the impugned order, the appellants have rendered themselves to penalty under Section 117 of the Customs Act, 1962 as proposed in the show cause notice.
65. As regards the other appellants i.e. Yashpal Goyal (C/60261 /2022), Love Sharma (C/60263/2022), Rajan Arora (C/ 60262 / 2022), Sunil Kumar(C/60264/2022) we find that the charge against all the appellants is that they have abetted the fraud allegedly committed M/s Secon Logistics/Shri Jatinder Kumar as follows. Shri Yashpal Goyal had knowingly given his IEC details to Shri Love Sharma for the purpose of import and had authorized Shri 70 C/60251/2022 & 07 others Love Sharma for import of two consignments "Light Melting Scrap" from Dubai (UAE) by way of Authority letter dated 22.10.2020 Shri Rajan Arora paid customs duty, Shipping Line charges and port handling charges upon instruction from Sunil Kumar, proprietor of M/s KVR Enterprises.
Shri Love Sharma made available the IEC documents of M/ Goyal Steel Industries Shri Sunil Kumar was that he instructed Rajan Arora to pay Shipping Line charges and port handling charges despite the fact that he is not the importer.
65.1. The defence of the appellants is as follows lending of IEC by M/s Yashpal Goyal, is not a violation under Customs Act, 1962, as held in Proprietor, Carmel Exports and Imports v. CC, Cochin 2012 (26) ELT 505 and in Hamid Fahim Ansari v. CC Imports, Nava Sheva: 2009 (241) ELT 168; show cause has not been issued within the period of six months as per section 110(2) and section 124 of the Act; ADG DRI is not competent to order extension;
the word "abetment" is used for an activity done with intent to participate in misdeeds with pre-knowledge and presupposition of undue benefit likely to arise by the alleged activity; in order to constitute abetment, the abetter must be shown to have intentionally aided the commission of crime; the show cause notice merely makes allegation of abetment without even discussing as to how the Appellants abetted the contravention; there is no evidence adduced in the show cause notice showing 71 C/60251/2022 & 07 others that the Appellants acted intentionally with pre-knowledge and with presupposed benefit to be obtained from Jatinder Kumar; there is no allegation in the Show cause Notice that the appellants either had previous knowledge that dry dates were being imported in the name of Light Melting Scrap or that they had mens rea;
dry dates are not prohibited goods and are freely importable; thus the appellant is entitled to redeem the goods in terms of Section 125 of the Customs Act; dry dates were dispatched instead of light metal scrap only due to the mistake on the part of the foreign supplier;
impugned order erred in determination of value the impugned goods; department has not given any justification and have contravened provisions of law and have adopted Rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 straight, without exhausting the Rules 3-9 of CVR as specified;
copy of the Bill of Entry No. 9966498 Dated 15.12.2020, relied upon for re-determination of value along with its import documents are not supplied to the Appellant and hence can not be relied upon.
65.2. We find that the main defence of the appellants is that they had no knowledge of the fact that dry dates were to be imported in the guise of Light Melting scrap; the investigation does not prove the presence of mens rea and it was not shown that the appellants had received any financial benefit out of their actions. We find that it is 72 C/60251/2022 & 07 others not the case of the appellants that they had no role to play in the fraud that has been committed; they submit that they had no mens rea. The appellants mainly rely on decisions where in it was held that mens rea is required for imposing penalty under Sections 112, 114A, 114AA of the Customs Act, 1962. We find that the cases are not comparable as the facts are not comparable. The appellants themselves rely on the case of Sri Kumar Agency 2008 (232) ELT 577 (SC) wherein it was held that each case is different and a single point can separate them. Relying on the same case, we find that the issue in the instant case is about the imposition of penalty under Section 117 of the Customs, Act 1962, which provides for penalty in cases where express penalty is not provided. In view of the discussion above, we have already discussed as to how Shri Yashpal Goyal abetted the fraud that has occurred in importing dry dates in the guise of Light Melting Scrap, by knowingly allowing their IEC to be used; in giving authorisation to Shri Love Sharma; in misleading the investigation by inconsistent statements etc. We also find that other appellants Love Sharma, Rajan Arora and Sunil Kumar have also rendered themselves liable to pay penalty. However, we need to keep in mind that the penalty must be commensurate with the role played.
66. Coming to the other appellants Shri Suraj Salaria (Appeal No. C/60213/2022) and Shri Saurabh Kumar (Appeal No. C/60232/2022), the Inspector and the Superintendent, respectively, we find that the allegation is that they have shown dereliction of duty in examining the goods without breaking open the seals and giving out of charge. We find that while the Inspector blames the same on Rush of work 73 C/60251/2022 & 07 others the Superintendent says he acted on good faith in not verifying the report given by the Inspector in the EDI system. In their defence both the officers submit that the Adjudicating Authority admitted that there was no abetment on the part of appellant; there was no mala fide intension; no mens rea and no allegation of any unlawful consideration. They submit that even if it is accepted for the sake of argument that there is dereliction of duty, it doesn't constitute an offence under customs Act, 1962. They further submit that as there is no contravention of Section 47(1), penalty under Section 117 is legally unsustainable; without prejudice to above, even if a contravention of Section 47(1) were assumed, the Appellant is fully protected under Section 155(1) of the Act; the OCC order was issued in good faith; as there were no alerts issued either in respect of the importer or the cargo, they had no reason to doubt the declaration and acted on good faith; they are eligible for immunity under Section 155(1); under Section 155(2), prior written notice must be given to a customs official at least one month before initiating proceedings, and no proceedings can be initiated beyond three months from the cause of action; in the present case, the mandatory notice was issued nine months after the cause of action, rendering the proceedings null and void.
66.1. We find that the Adjudicating Authority finds that Further, as regards the abetment or involvement of the officer, there appears nothing on record in the statement of the other Noticees, as such this aspect is ruled out, however there is dereliction of duty on the part of the Officer that he has not performed the duty as per the procedure and examination report was put in EDI system even before 74 C/60251/2022 & 07 others examination or cutting the seals of the Containers and that Since, the Officer has not performed his duty in prescribed manner which has resulted in the subject case. The Adjudicating Authority however concludes that the officers are found liable for penalty under Section 117 of the Act. We find that there is a force in the submissions of the officers. On the one hand the Adjudicating Authority finds that there is no abetment on the part of the officers and on the other hand confirms penalty on the officers. We are in agreement with the submissions of the officers that even if dereliction of duty is found the same doesn't constitute offence under Customs Act though the department is free to take any other action under relevant Rules. 66.2. We further find, as submitted by the appellants that the notice under Section 155(2) of the Customs Act has been issued beyond limitation period of three months from the accrual of cause of action. The reason advanced by the Adjudicating authority that the time limit was not applicable due to the Corona Pandemic at that time. We find that the Suo moto extension of time limit by Hon'ble Supreme Court applies to appeals etc under various Acts and not to the action that is required to be taken by the Officers as per Law. We find that it was held in the cases relied upon by the appellants that protection against initiation of adjudication proceedings for imposition of penalty available to Customs Officer under Section 155 of Customs Act and that limitation under section 155 (2) of Customs Act is applicable. Therefore, we find that the impugned order is not sustainable as far as the penalty imposed on Shri Suraj Salaria (Appeal No. C/60213/2022) and Shri Saurabh Kumar (Appeal No. C/60232/2022), the Inspector and the Superintendent, is concerned.
75 C/60251/2022 & 07 others
67. Coming to the issue of confiscation of the goods, we find that containers stuffed with dry dates had been imported against IEC AKOPP3397B, by mis-declaring the imported goods to be Light Melting Scrap, supplied by M/s Sama AL Jazeera Auto Used Spare Parts TR LLC, Dubai; they were sought to be cleared vide Bills of Entry i.e. BE No. 2086929 dated 23.12.2020 and No. 2103144 dated 24.12.2020. filed through and by Customs Broker M/s Secon Logistics Pvt Ltd. As the goods are mis-declared, they are liable for confiscation. We also find that the imported dry dates had violated the provisions of Para 10(2) of CHAPTER III Plant Quarantine (Regulation of Import into India) Order, 2003 and for that reason the goods are deemed to be prohibited. Therefore, we find that the confiscation as ordered by the adjudicating authority is legally sustainable.
68. In view of the discussion as above, we uphold the confiscation of the goods sought to be cleared vide Bills of Entry No. 2086929 dated 23.12.2020 and No. 2103144 dated 24.12.2020. In respect of the different appeals, we pass the following order, modifying the impugned order to the extent indicated.
(i). Appeal No. C/60251/2022 filed by M/s Secon Logistics Pvt Ltd and Appeal No. C/60252/2022 filed by Shri Jatinder Kumar are allowed.
(ii). Appeal No. C/60213/2022 filed by Shri Suraj Salaria and Appeal No. C/60232/2022 filed by Shri Saurabh Kumar are allowed.
76 C/60251/2022 & 07 others
(iii). In respect of Appeal No. C/60261/2022, Penalty imposed on Shri Yashpal Goyal Proprietor, M/s Goyal Steel Industries, under Section 117 of the Customs Act, 1962, is reduced to Rs 25,000 (Rupees Twenty-Five Thousand Only)
(iv). In respect of Appeal No. C/60263/2022, Penalty imposed on Shri Love Sharma, under Section 117 of the Customs Act, 1962, is reduced to Rs 10, 000 (Rupees Ten Thousand Only)
(v). In respect of Appeal No. C/60262/2022, Penalty imposed on Shri Rajan Arora, Partner cum H-Card holder in M/s Sark Enterprises, under Section 117 of the Customs Act, 1962, is reduced to Rs 5,000 (Rupees Five Thousand Only)
(vi). In respect of Appeal No. C/60264/20022, Penalty imposed on Shri Sunil Kumar, proprietor, M/s KVR Enterprises, under Section 117 of the Customs Act, 1962, is reduced to Rs 5,000 (Rupees Five Thousand Only) (Order pronounced in the open court on 17/12/2025) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) PK