Custom, Excise & Service Tax Tribunal
Nitesh Shekatkar vs Commissioner, Customs-Indore on 13 March, 2026
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. - IV
Customs Appeal No. 50271 of 2021
[Arising out of Order-in-Original No. 04-05/COMMR/CUS/IND/2019-20 dated
30.07.2019 passed by the Commissioner of Customs, Indore]
Nitesh Shekatkar ...Appellant
Proprietor, M/s. Aashavi Enterprises,
02, Sakshi Apartments,
Plot No. 1121, Scheme No.14,
Part-1, A.B.Road, Indore-452001
VERSUS
Commissioner of Customs - Indore ...Respondent
Post Box No. 10, Manik Bagh Road, Manik Bagh Palace, Indore, Madhya Pradesh - 452001 APPEARANCE:
Shri S.K. Mathur, Advocate for the Appellant Shri Rajesh Singh, Authorized Representative for the Respondent CORAM:
HON'BLE DR. RACHNA GUPTA, MEMBER (JUDICIAL) HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) DATE OF HEARING: 22.01.2026 DATE OF DECISION: 13.03.2026 FINAL ORDER NO. 50357/2026 DR. RACHNA GUPTA Present appeal is filed against the Order-in-Original dated 30.07.2019 passed by the Commissioner of Customs, Manik Bagh Palace, Indore in which the appellant has been penalized for sum of Rs.25 lacs under the provisions of Section 112(a) and Section 114AA of the Customs Act, 1962 on the charges of having allowed his Import Export Code (IEC) to be used for fraudulent imports of various consignments by Shri Kirit Shrimankar (as per details given in the said Order-in-Original).
2. The facts, succinctly, for the present adjudication are that on the basis of intelligence inputs, a container destined for ICD, 2 Customs Appeal No. 50271 of 2021 Dhannad, Madhya Pradesh in the name of M/s. Topper Milk (India) Ltd., Shop No. 12, Ellora Plaza, 3rd Floor, Near Railway Station, Indore-452001 with the manifest mentioning the goods as "Footwear & Fabric" was intercepted by Hongkong Customs and on examination it was found to contain "Electroshock batons, knuckle dusters and suspected counterfeit personal care products. The goods were therefore seized by Hongkong Customs, investigations were taken up by the Directorate of Revenue Intelligence, Mumbai Zonal Unt, Mumbai. The investigations made by DRI revealed that during the period from December 2011 to May 2013, Kirit Shrimankar had caused import of as many as 179 consignments in the names of various IEC holders (16 in number).
3. During the investigations statements of four IEC holders, who were found existing, including the present appellant were recorded under section 108 of the Customs Act, 1962. Appellant stated that he was a man of meager means, but had floated firm and obtained IEC in the name of the firm at behest of others. He stated that he had merely lent the name and IEC of his firm for monetary consideration and that he had got nothing to do with the goods imported in the name of his firm. He had neither placed orders for these goods nor had he negotiated those goods, nor even had sent any remittances abroad from his bank account towards purchase price of the impugned goods. Appellant did not claim ownership of the goods imported in the name of his firm and asked for those goods to be dealt with as per law. Further enquiries revealed that Shri Kirit Shrimankar had used the names of firms/companies and Import Export Codes to cause import of consignments in question. 3
Customs Appeal No. 50271 of 2021 Further investigations revealed that either these addresses were non-existent or the firms at the given address did not exist. However, bankers of each of the said 16 firms informed that not a single outward remittance had been made from the bank account of these firms.
4. The whole investigation culminated into issuance of the Show Cause Notice No. 01/2013-14 dated 30.09.2014 demanding sum of differential duty of Rs.64,44,69,300/- relating to redetermined assessable value of goods Rs.167,90,71,403/- from the importer Shri Kirit Shrimankar with imposition of penalties upon 14 co- noticees including the appellant. The said proposal has been confirmed vide the impugned order under challenge. Penalty of Rs.25 lakhs has been imposed upon the appellant (Shri Nitesh Shekatkar). Being aggrieved, the present appeal has been filed.
5. We have heard Shri S.K. Mathur, learned Advocate for the appellant and Shri Rajesh Singh, learned Authorized Representative for the department.
6. Learned counsel for the appellant submitted that the appellant has been working as a Direct selling agent for Axis Bank, ICICI Bank, Kotak Mahindra Bank & India Bulls Housing of Finance Banks for hire, leasing, mortgage, working capital projects etc. Thus had no knowledge of imports and exports nor of law and procedures governing those procedures. The appellant had a meager source of income and wanted to have extra legal income and as such discussed with his friend Sanjay Kundra, freight forwarder and proprietor of M/s. Shreya International and M/s. 4
Customs Appeal No. 50271 of 2021 Anjana International. He got him introduced to Mr. Kirit Shrimankar some time in November 2012 and on his advise appellant applied for IEC in the name of M/s. Aashavi Enterprises.
7. Shri Sanjay Kundra promised appellant to give Rs.20,000/- per import consignment in lieu of using his name and his IEC Code. Looking to the lucrative offer and to have legal income that the appellant gave consent. For the same reason of arrangement being lucrative appellant through Shri Ankit Mehta (CHA) got another Import Export Code in the name of his employee Shri Ram Mehra as proprietor of M/s. Dhruv Enterprise. This was also done as per suggestion of Shri Sanjay Kundra. Appellant did receive a sum of Rs.40,000/- from Shri Kirit Shivmankar (from Shri Sanjay Kundra's office, out of which a sum of Rs.7,500/- was given to the said employee, Shri Ram Mehra. It is further submitted that the, appellant never signed any document, nor placed any order to import any goods. He was absolutely ignorant about the consignments imported under his IEC. There are no allegations that this appellant was involved directly or indirectly in the fraudulent imports mad by Shri Kirit Shrimankar. The penalty of Rs.25 lakhs is imposed upon the appellant only for having allowed use of Import Export Code for consideration and thus is highly disproportionate. It is rather liable to be set aside for the above mentioned reasons. Learned counsel for the appellant has relied upon the following decisions:
(i) Carmel Exports and Imports Vs. Commissioner of Customs, Cochin reported as 2012 (276) ELT 505 (Ker.) 5 Customs Appeal No. 50271 of 2021
(ii) Customs, Kolkata Vs. Mahendra Patni reported as 2004 (164) ELT 259 (Tri.-Kolkata)
(iii) Commissioner of Customs Vizag Vs. Shiping and Trading Associates (P) Ltd. reported as 2011 (12) ELT 250 (Tri.-Chennai).
(iv) Laser Sight (India) P. Ltd. Vs. Commissioner of Central Excise, Delhi reported as 1999 (110) ELT 935 (Tri.) With these submissions, the order under challenge is prayed to be set aside and the appeal is prayed to be allowed.
8. While rebutting these submissions, learned Departmental Representative at the outset has reiterated the findings arrived at by adjudicating authority below in the impugned order. It is submitted that the appellant in the instant case is proprietor of M/s. Aashvi Enterprises one of importing firm of syndicate and co- noticee of the said show cause notice. The examination of live import consignment of the appellant revealed mis-declaration of description and value. The appellant also floated another firm M/s. Dhruv Enterprises in the name of one of his employee Shri Ram Mehra and also procured Import Export Code. The appellants knowingly and intentionally were letting the Import Export Code to be used by the other person/s for monetary benefits.
9. It is further submitted that the actual/benfitial Shri Nitesh Shekatkar, the co-noticee, in relation to the aforesaid import consignments, has intentionally and knowingly indulged the appellant and other IEC holders in making, signing, using, causing 6 Customs Appeal No. 50271 of 2021 to be made, signed or use, various declarations and documents which he knew or was having reason to believe were false or incorrect in any material particular. The appellant and other IEC holders were well aware that such declaration and documents would be used for Customs clearance of goods to be imported by fraudulent means of misdeclaration of description, quantity and value with the intent to get monetary benefit. Thus it is clear that appellant was acting with guilty mind and have rendered themselves liable to penalty under section 114AA of the Customs Act, 1962. Earlier decision of this tribunal in the case of M/s. Subhrabrata Chattaraj Vs. Commissioner of Customs, Indore in Customs Appeal No. 52684 of 2019 decided on 15.02.2024 has been relied upon. With these submissions, the order under challenge is prayed to be upheld and appeal is prayed to be dismissed.
10. Having heard both the sides at length and after perusing the records and the decisions relied upon by both the parties, it is observed and held as follows:
11. Present is a case of proxy import of goods in the name of dummy IEC by resorting to mis-declaration of description and value leading to evasion of customs duty to the tune of Rs.64.44 crores during the period from December 2011 to May 2013. It has been alleged in the show cause notice that a syndicate with Shri Kirit Shrimankar as the master mind involving various others namely Shri Manjit Singh Sandhu, Shri Raju Dubey (Transporter), Ankit Mehta (CHA), Shri Sandeep Sharma, Sanjay Kundra (freight 7 Customs Appeal No. 50271 of 2021 forwarder) and even the customs officer Shri S.Chattaraj had been active behind such evasions. It is also the fact on record that the said syndicate has used 16 Import Export Codes for committing the alleged act of misdeclaration out of which 12 IEC holders were found non-existent. The appellant is one among 4 who could be traced by the officers of Department of Revenue Intelligence while investigating the alleged misdeclaration. The decision relied upon by the department is with respect to an appeal filed by said Shri S. Chattaraj against the imposition of penalty upon him. The departmental order has been upheld observing that Shri Kirit Shrimankar with his various associates has been in practice of importing goods by mis-declaring the quantity as well as the value thereby causing exchequer loss. The customs officers/the appellant in the said decision has been held to have abetted the said syndicate in the said alleged act.
12. Vis-à-vis the present appellant, the adjudicating authority has observed that the appellant has obtained IEC in the name of his firm M/s. Arshi Enterprises for no other purpose than getting a commission for letting the same to be used by the importer. The another firm M/s. Dhruv Enterprises in the proprietary name of his employee Shri Ram mehra was also involved with an intent to increase his income out of lending of Import Export Codes to the beneficial importers. These are otherwise admitted facts. The impugned order has also observed that even in show cause notice there is no allegation about appellant to be instrumental in misdeclaration, misstatements, suppression, collusion with anybody in the matter of import of consignments mentioned in the show 8 Customs Appeal No. 50271 of 2021 cause notice. Accordingly, he is held not responsible for the act of omission and commission done by Shri Kirit Shrimankar or his syndicate. However, the penalty on the appellant has been imposed for violation of provisions of Foreign Trade (Development and Regulation) Act, 1992 and Foreign Trade (Regulation) Rules, 1993. The penalties under Section 112(a) and 114AA of the Customs Act, 1962 have also been imposed.
13. To adjudicate the correctness of these findings, I have foremost perused the provisions. Section 112(a) is about penalty, for improper importation of goods upon any person who in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111 or abates the doing or omission of such an act. Section 114AA of the Act penalizes the use of false and incorrect material by the person who knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular in the transaction of any business for the purposes of this act.
14. I observe from the facts of the present case that the appellant has made an admission to have voluntarily let its Import Export Code to Shri Kirit Shrimankar. The said IEC has been used by said Shri Kirit Shrimankar and his syndicate for committing such acts/omissions which have rendered the imported goods liable to be confiscation under Section 111 of the Customs Act, 1962. Admissions are the best evidences which need no further proof. I draw my support from the decision of Hon'ble Apex Court in the 9 Customs Appeal No. 50271 of 2021 case reported as AIR 1952 SC 214, wherein it was held that the conventional statement of the accused if found to be voluntary, can form the sole basis for conviction. The Hon'ble Court elaborated that even if such statement is retracted, the court is required to examine whether it was obtained by threat, duress or coercion and whether the confession is truthful. If found to be voluntary and truthful, inculpatury portion of retracted confession could be relied upon to base the conviction. In the present case apparently and admittedly there is no retraction of his statement by the appellant. The statement is clear admission for lending the Import Export Code of the appellant and of the firm in the name of his employees by him to Shri Kirit Shrimankar. This was admittedly at the instance of freight forwarder Shri Sanjay Kundra, the friend of the appellant, to gain lucrative incentives. Irrespective the appellant is held to have no knowledge of imports made by Shri Kirit Shrimankar and his syndicate by resorting the misdeclaration and suppression (as observed by the original adjudicating authority below), the appellant has admitted to obtain the Import Export Code wrongly declaring him to be a proposed importer/exporter knowingly that he shall not be indulging in the said business rather he shall be lending the code in his name to be used by others.
15. At this stage provisions of Foreign Trade (Development and Regulation) Act, 1992 and the respective rules are perused. It is observed that Section 7 of the said Act read with Rule 12 require that import/export can be made only by the person who is allotted a specific Import Export Code (IEC). As per para 2.12(a) of Foreign Trade Policy 2009-2014 no import shall be made by any person 10 Customs Appeal No. 50271 of 2021 without an IEC Number, unless is specifically exempted. Further Para 2.9.2 of the Handbook of Procedures Volume I 2009-2014 clarifies that IEC Number is alloted to an applicant is valid for its branches/divisions/units/factories. Thus it is clear that the Act and the Rules require that the IEC Number cannot be allowed to be used by anyone else than the IEC holder himself. Since the appellant admittedly has allowed his IEC code to be used by someone else, the appellant has committed violation of provisions of Foreign Trade (Development and Regulation) Act as well as the respective rules.
16. In terms of Section 2(33) the goods imported against prohibition under Customs Act or under any other law for the time being in force became prohibited goods which are liable for confiscation under Section 111 of the Customs Act. Since the act of appellant is in violation of prevalent law of foreign trade, his act has rendered the impugned goods liable for confiscation. Hence it is held that the penalty under Section 112(a) of the Customs Act has rightly been imposed on the appellant. Further it stands established from the above discussion that appellant has knowingly allowed Shri Kirit Shrimankar to make false declarations before customs authority hence he is rightly been penalized under Section 114AA of the Customs Act. Hence the findings of original adjudicating authority about no involvement of the appellant in the alleged act of wrong declaration and under valuation are held to be wrong on the face of appellant's own admission. 11
Customs Appeal No. 50271 of 2021
17. As a result of entire above discussion, the penalty of Rs.25 lakhs imposed on the appellant is hereby upheld. Consequent thereto the appeal is dismissed.
[Order pronounced in the open court on 13.03.2026] (DR. RACHNA GUPTA) MEMBER (JUDICIAL) (P.V. SUBBA RAO) MEMBER (TECHNICAL) HK