Custom, Excise & Service Tax Tribunal
Shri Arnab Sinha vs -Kolkata(Admn Airport) on 19 September, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH: KOLKATA
REGIONAL BENCH - COURT NO. 2
Customs Appeal No. 75555 of 2022
(Arising out of Order-in-Original No. KOL/CUS/Pr.COMMISSIONER/AP/ADMN/09/2022
dated 31.03.2022 passed by the Principal Commissioner of Customs (Airport & ACC),
15/1, Strand Road, Kolkata - 700 001)
Arnab Sinha : Appellant
20, Netaji Subhas Road,
1st Floor, Block-A,
Kolkata - 700 001
VERSUS
Principal Commissioner of Customs (Airport & ACC) : Respondent
Custom House, 15/1, Strand Road,
Kolkata - 700 001
APPEARANCE:
Shri Arvind Baheti, Chartered Accountant, for the Appellant
Shri Tariq Sulaiman, Authorized Representative, for the Respondent
CORAM:
HON'BLE SHRI R. MURALIDHAR, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NO. 77443 / 2025
DATE OF HEARING: 17.09.2025
DATE OF DECISION: 19.09.2025
ORDER:[PER SHRI K. ANPAZHAKAN] The present appeal has been filed against the imposition of penalties of Rs.50,00,000/- each under Sections 112(a)(i), 112(b)(i) and 114AA of the Customs Act, 1962, totally amounting to Rs.1,50,00,000/- vide the Order-in-Original No. KOL/CUS/Pr.COMMISSIONER/AP/ADMN/09/2022 dated 31.03.2022 passed by the Ld. Principal Commissioner of Customs (Airport & ACC), 15/1, Strand Road, Kolkata - 700 001.
Page 2 of 26Appeal No.: C/75555/2022-DB
2. The facts of the case are that intelligence was developed that certain courier firms were engaged in the unscrupulous activity of importing high value counterfeit items/contraband items in the guise of household goods by resorting to mis-declaration in connivance with customs officers. Based on such intelligence, investigations were initiated by DRI against the importer, the Customs House Agent ("CHA"), Customs Officers and some other parties (hereinafter referred to as the "co-noticees") who were believed to be assisting the illegal import. During the course of investigation, summons were issued and statements were recorded from various persons.
3. Mr. Arnab Sinha (hereinafter referred to as the "appellant"), one of the Co-Noticee, is the Director of M/s. NAF Logistics Private Limited ("NLPL" for short). During the relevant period, NLPL was engaged as the freight forwarder for certain consignments imported by one Mr. Sushil Kumar Singh, Proprietor of Sri Ram Traders (hereinafter referred to as the "importer"). Mr. Arnab Sinha and his mother, namely, Smt. Mohua Sinha were also the Directors of M/s. Zhenda Foreign Trade HK Limited ("ZFTL/overseas supplier").
4. During the course of investigations conducted, the premises of the appellant was searched on 23rd October, 2017 and statements of the appellant were also recorded.
5. Upon completion of the investigation, a Show Cause Notice dated 04.12.2017 was issued, proposing confiscation of the goods imported under Bill of Entry No. 9948788 dated 03.06.2017, Bill of Entry No. 9948804 dated 03.06.2017 and Air Way Bill No. 21715543404 dated 05.06.2017 and also proposing penalties, inter alia, on the appellant herein.
Page 3 of 26Appeal No.: C/75555/2022-DB
6. Upon adjudication, penalties of Rs.50,00,000/- each under Sections 112(a)(i), 112(b)(i) and 114AA of the Act, totally amounting to Rs.1,50,00,000/-, has been imposed on the appellant vide the impugned order dated 31.03.2022.
6. Aggrieved by the imposition of penalties on him, the appellant has filed the instant appeal.
7. It has been submitted by the appellant that he had been appointed as the freight forwarded in respect of the following three consignments: -
Airway Bill Bill of Entry Declared Goods Name of Sl. Number and Date Number and the No. Date Supplier 16083695684 9948788 dated Mobile ZFTL 1 dated 03 June 2017 03 June 2017 accessories/Hand s free tampered glass/Housing/LC D 17654035881 9948804 dated Shoes ZFTL 2 dated 01 June 2017 03 June 2017 21715543404 No BOE has Electronic Parts ZFTL 3 dated 05 June 2017 been filed against the said Airway Bill
8. The primary allegations against the appellant are that he has acted both as the overseas supplier and the freight forwarder for the imports and thus has provided active assistance in the alleged mis- declaration. It is the case of Revenue that the overseas supplier had no FOREX Account and as such the remittances towards the alleged imports were being received by the appellant through channels other than banking channels.
Page 4 of 26Appeal No.: C/75555/2022-DB
9. During the course of hearing, the Ld. Counsel appearing on behalf of the appellant has made various submissions in support of his contentions, which can be broadly summarized as under: -
A. The entire case against the appellant has been framed solely on the basis of the statements of appellant and other co-noticees, which holds no evidentiary value, as the procedure prescribed under Section 138B of the Customs Act have not been complied with and even the opportunity of cross-examination has been denied to the appellant.
(i) At the outset, the appellant submits that it is an admitted position in the notice that nothing incriminating was found from the premises of the appellant during the investigation .Thus, the entire case of the Revenue against the appellant is based solely upon statements of the appellant and co-noticees, without any corroborative cogent evidence. It is a settled law that such statements, in absence of any corroborative evidence, cannot form the sole basis for convicting the appellant as held by this Tribunal in the case of Suresh Maruti Patil Vs. Commissioner of Customs (Preventive), Kolkata [2025 (5) TMI 663]. Moreover, the retracted statements of the Appellant having been obtained by the Department under duress and coercion do not hold any evidentiary value and as such cannot be relied. Reliance in this regard is placed on the judgement of Hon'ble Delhi High Court in the case of Directorate of Revenue Intelligence Vs. Moni [2010 (252) E.L.T. 57]and the decision of the Tribunal in Page 5 of 26 Appeal No.: C/75555/2022-DB the case of Jeen Bhavani International Vs. Commissioner [(2023) 6 Centax 11 (Tri. - Mum)] [Affirmed in SC - (2023) 6 Centax 14].
(ii) Even otherwise, the statements relied upon by the Ld. adjudicating authority holds no evidentiary value as the procedure prescribed under Section 138B of the Customs Act have not been complied with. It is a settled law that statement of witness recorded under Section 108 of Customs Act, 1962 cannot be admitted as evidence unless the person making the statement is first examined as a witness before the adjudicating authority and thereafter subjected to cross-examination. The use of the word "shall" in Section 138B(1), makes it clear that the procedural requirements under Section 138B are not merely directory but mandatory in nature. In the absence of compliance of procedure required under Section 138B of the Customs Act, such statements does not constitute relevant or admissible evidence and hence cannot be relied upon to demand penalty from the appellant. Reliance in this regard is placed on the judgement of the Principal Bench of the Tribunal in the case of M/s. Surya Wires Private Limited Vs. Principal Commissioner, CGST, Raipur [2025 (4) TMI 441]and the decision of the Tribunal, Chandigarh in the case ofM/s. Ad Adhesive Industries Vs. Commissioner of Customs, Delhi - IV [2025 (7) TMI 1554].Page 6 of 26
Appeal No.: C/75555/2022-DB
(iii) Moreover, the opportunity of cross-examination of the other co-noticees has also been denied to the appellant by the Ld. adjudicating authority on the purported ground that allowing cross examination is not mandatory under the Customs Law. The appellant submits that it is a settled position in law that when the statements recorded from the co-accused are the only evidence to implicate another person in an offence, then the said statements cannot be relied upon against such person (appellant) without giving an opportunity for cross- examining the persons who have given the statements implicating the appellant. Reliance in this regard is placed on the judgement of the CESTAT, Kolkata in the case of Shri Gagan Karel Vs. Commissioner of Customs (Preventive), Kolkata [2025 (1) TMI 1104].
B. Appellant is neither the importer nor the mastermind to whom the importer had allegedly lent its IEC. The appellant only acted as freight forwarders and had no role in the alleged mis- declaration of the imported consignments.
(i) The appellant and his mother were the directors of the overseas supplier till 01 March 2017 after which they resigned from the said directorship. The alleged exports, on the other hand, were made during the period 05 June 2017 to 01 August 2017. The Appellant was neither the supplier, nor the carrier, nor the importer, nor the CHA in respect of the impugned import Page 7 of 26 Appeal No.: C/75555/2022-DB consignments. The actual entities involved in the said transactions are as under:
i. Supplier - M/s. Zhenda Foreign Trade HK Limited ii. Carrier on export side - Ship Air Express (HK Limited) iii. Importer - Mr. Sushil Kumar Singh and Badshah (alleged actual importer) iv. Customs House Agent (CHA) - M/s.
Sadguru Forwarders Pvt. Ltd represented by Shri Aloke Ghosh
(ii) The role of the appellant was limited solely to acting as the Indian counterpart of the overseas carrier and nothing beyond. The Appellant had no connection whatsoever with the procurement, shipment, importation, or clearance of the goods in question. Therefore, during the relevant period, the appellant was neither responsible nor associated with the state of affairs of the overseas supplier and hence no malafide can be attributed to the Appellant for the impugned consignments.
(iii) In so far as the allegation of receipt of remittances by the overseas supplier through channels other than banking is concerned, the appellant submits that being completely unaware of the affairs of the company for the said period, non-receipt of proceeds through formal banking channels cannot be attributed to the appellant in absence of any corroborative evidence. Further, during the period the appellant was the Director of the overseas supplier, there was an active bank account in Page 8 of 26 Appeal No.: C/75555/2022-DB the name of ZFTL. Therefore, the allegation of receipt of remittance through other than banking channels under the directorship of the Appellant is totally based on assumptions and presumptions.
(iv) The appellant, for the services rendered in the capacity of a freight forwarder, has raised valid invoices upon the importer for the freight forwarding services and has received payments for the same. The same can be cross verified from the corresponding entries in the bank statements of the importer. Similarly,invoices raised upon the appellant were only for freight charges. The Airway Bill corresponding to such invoices conspicuously showed that the Appellant was not the consignee of the said goods and as such there could be no question of the appellant using someone else's IEC.
(v) Further, the appellant did not stand to gain anything from the alleged mis-declaration. The Department has failed to establish the receipt of any amount received by the appellant which was received by the appellant except for the freight forwarding charges. The contention of the department that the amount was received by the appellant through other than banking channels is entirely based upon assumptions and presumptions without any cogent evidence and as such the same is not sustainable in the eyes of law. Reliance in this regard is placed on the judgement of the Tribunal in the case of Commissioner of C. Ex. & ST Vs. Mahavir Page 9 of 26 Appeal No.: C/75555/2022-DB Enterprises [2017 (355) E.L.T. 297 (Tri. -
Hyd.)].
C. Penalties imposed under the various provisions of the Customs Act are wholly unwarranted in so far as the provisions of Section 112(a), 112(b) and 114AA are mutually exclusive. In any event, penalty u/s 114AA can only be imposed in cases of exportation and not in cases of importation.
(i) The appellant's job was merely to collect the delivery order from the airline and pass it on to the Consignee/Importer. He was not and could not be expected to be aware about the contents of the packages. Further, the appellant did not have any direct communication with the customs officers or the other alleged perpetrators of the modus operandi as evident from the call records produced in the impugned notice. In these circumstances, the appellant cannot be said to have abetted any act or omission rendering the goods liable to confiscation [Section 112(a)], nor can it be alleged that he knew or had reasons to believe that the imported goods were liable for confiscation [Section 112(b)]. Consequently, the imposition of penalty under Section 112 of the Customs Act, 1962 is wholly unwarranted and bad in law. Reliance in this regard is being placed on the judgement of the Tribunal in the case of Vaz Forwarding Limited Vs. Commissioner of Customs, Calcutta [2000 (118) E.L.T. 724 (Tri. Cal.)].
Page 10 of 26Appeal No.: C/75555/2022-DB
(ii) In any event, the provisions of Section 112(a) and Section 112(b) are mutually exclusive and cannot be applied simultaneously as held by the Tribunal in the case of Ashok T. Sadrangani Vs. Commissioner of Customs (Preventive), Mumbai [2018 (363) E.L.T. 889].Similarly, the provisions of Section 114AA and Section 112(a) are also mutually exclusive and cannot be applied simultaneously. Reliance in this regard is placed on the judgement of the Tribunal in the case of S.M. Taufeek Vs. Commissioner of Customs, Chennai - IV [2017 (358) E.L.T. 326 (Tri. - Chennai)].
(iii) Further, the appellant submits that penalty under Section 114AA is imposable only in those situations where export benefits are claimed without exporting the goods and by presenting forged documents and not in cases of importation. The same has been echoed in the judgment of this Tribunal in case of M/s. GainwellCommosales Private Limited Versus Commissioner of Customs (Import- I), Mumbai [2025 (8) TMI 1483 - CESTAT KOLKATA]and in the case ofAccess World Wide Cargo Vs. Commissioner of Customs, Bangalore [2022 (379) E.L.T. 120].
(iv) In any event, penalty under Section 114AA can be imposed only upon a 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 for the purpose of the Customs Act. In this regard, the Page 11 of 26 Appeal No.: C/75555/2022-DB appellant submits that his role was limited to filing the Airway Bill and to issue the delivery order received from the airline to the importer. Such an airway bill is not a document filed under the Customs Act. As such penalty under Section 114AA cannot be imposed on the appellant. Reliance in this regard is being placed on the judgement of the Tribunal, Delhi in the case of Mayank Gupta Vs. Commissioner of Customs (Export), New Delhi [(2024) 25 Centax 383].
(v) The Ld. adjudicating authority has observed that the appellant introduced Sahanshah Mallick (alleged actual importer of one of the consignments) to Mr. Sushil Kumar Singh and thus provided active assistance in the mis- declaration. However, it is contended by the appellant that merely because of the aforesaid, it cannot automatically lead to the allegation that the appellant has connived to mis-declare the goods imported. Reliance in this regard is placed on the judgement of the Tribunal, Kolkata in the case of Sajal Das Vs. Commissioner of Customs, Airport & Air Cargo Complex Commissionerate [Final Order No. 76182 of 2025].
(vi) Further, it is an admitted position in the impugned order itself that the invoices and packing lists were signed by Mr. Hertman Kong on behalf of the overseas supplier who was not authorized by the Appellant. Therefore, the appellant had no nexus with such alleged imports whatsoever. Even otherwise, it is an Page 12 of 26 Appeal No.: C/75555/2022-DB admitted position in the impugned order that the overseas supplier was unaware about the goods and issued invoices based on the terms dictated by the importer. As such no mens rea can be attributed to the appellant. It has been settled by a number of judgements of the Tribunal that penalty under Sections 112 and 114AA cannot be imposed in absence of malafide on the part of the appellant, such as in:
• P.N. Shipping Agency Vs. Commissioner of Customs, Nhava Sheva - I [2019 (369) E.L.T. 1560 (Tri. - Mum.) ] • Commissioner of Customs Vs. Trinetra Impex Private Limited [2020 (372) E.L.T. 332 (Del.)] D. The appellant cannot be assumed to be the Beneficial Owner of the consignment imported vide AWB No. 21715543404 dated 05 June 2017
(i) It is submitted that the impugned notice itself states that the consignee/buyer for the said consignments was Sri Ram Traders. Therefore, the observation of the Ld. adjudicating authority that the appellant was the beneficial owner of the said imports is wholly arbitrary and unsustainable. Such an observation has been rendered against the appellant merely on the basis of assumptions and presumptions.
Reliance in this regard is placed on the judgement of the Hon'ble Madras High Court in the case of C. Solomon Selvaraj Vs. Principal Commissioner of Customs [(2023) 13 Centax 118].
Page 13 of 26Appeal No.: C/75555/2022-DB
(ii) Even assuming, though without admitting that the appellant is the beneficial owner of the said goods, mis-declaration cannot be alleged upon the appellant as no Bill of Entry has been filed with respect to the said consignments. Further, there has been no violation of the provisions of Section 46 of the Customs Act, as it requires the importer to file a Bill of Entry for the purpose of importation.
(iii) In any event, it is his case that the impugned notice did not even allege that the appellant was the beneficial owner of the impugned consignments. The impugned notice primarily proceeded on the premise that the appellant provided active assistance in the alleged mis- declaration. Therefore, the Ld. adjudicating authority has travelled beyond the scope of show cause notice. It is a settled principle in law that an adjudication order cannot travel beyond the scope of Show Cause Notice. Reliance in this regard is placed on the judgement of the Tribunal in the case of Manjit Singh vs. Commissioner of Customs (Import), Nhava Sena [2015 (323) E.L.T. 377 (Tri - Mum)].
E. Quantum of penalty imposed upon the appellant is excessive and disproportionate vis-à-vis the offence alleged. Moreso, when the importer and the alleged mastermind Mr. Sushil Kumar Singh have been imposed with a lesser penalty than the appellant Page 14 of 26 Appeal No.: C/75555/2022-DB
(i) The appellant submits that the alleged principal offender, Shri Sushil Kumar Singh, proprietor of the IEC lending firm Sri Ram Traders who is alleged to have been the mastermind of the entire transaction has been imposed with a penalty of only Rs. 1,00,00,000/- [Rs. 60,00,000/- on Shri Sushil Kr. Singh u/s 112(a) and 112(b) and Rs. 40,00,000/- on Sri Ram Traders under Section 114AA]. Whereas, the Appellant, who is merely a freight forwarder engaged to facilitate the import consignments, has been saddled with an exorbitant penalty of Rs.1,50,00,000/-, i.e., Rs.50,00,000/- each under Sections 112(a), 112(b), and 114AA of the Customs Act, 1962. This arbitrary distinction between the treatment of the alleged mastermind and a peripheral service provider highlights the disproportionate nature of the penalty imposed upon the appellant.
(ii) It is a settled principle that penalty should be proportionate to both the nature of the offence and the role of the person in its commission. The Hon'ble Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa [1978 (2) E.L.T. (J 159)]held that penalty is not to be imposed merely because it is lawful to do so, but only when the conduct of the person is deliberate, contumacious, or with knowledge of violation. Applying this principle, the appellant, who had no role in planning or executing the alleged modus operandi and acted only as a freight forwarder, cannot justifiably be subjected to a penalty that is fifteen times higher than that imposed on the alleged Page 15 of 26 Appeal No.: C/75555/2022-DB mastermind. Such imposition is not only excessive but also contrary to the doctrine of proportionality. Reliance in this regard is placed on the judgement of Hon'ble Delhi High Court in the case of M/s. ECG Easy Connect Logistics Pvt. Ltd. Versus Commissioner of Customs [2025 (8) TMI 1573 - DELHI HIGH COURT].
(iii) Thus, even if it assumed but not admitted that the appellant had the knowledge of the goods and abetted in mis-declaration of the same, the penalty imposed cannot be more than the penalty upon the alleged principal offender. Hence, the penalty upon the appellant deserves to be set aside, or at the very least, reduced substantially.
9.1. In view of the above submissions, the Ld. Counsel for the appellant prays for dropping the penalties imposed on the appellant vide the impugned order.
10. On the other hand, the Ld. Authorized Representative of the Revenue has reiterated the findings in the impugned order. He submitted that the appellant and his mother have actually submitted their resignation only on 23rd October, 2017. Thus, it is his submission that the appellant was in charge of the affairs of the overseas supplier during the period when the imports took place. Accordingly, he prays for upholding the order of imposition of penalties on the appellant.
Page 16 of 26Appeal No.: C/75555/2022-DB
11. Heard both sides and perused the appeal records.
12. We observe that the appellant was the Director of the Freight Forwarding company, M/s. NAF Logistics Private Limited (NLPL). During the relevant period, NLPL was engaged as the freight forwarder for certain consignments imported by one Mr. Sushil Kumar Singh, Proprietor of Sri Ram Traders. The primary allegations against the appellant are that he has acted both as the overseas supplier and the freight forwarder for the imports and thus has provided active assistance in the alleged mis-declaration of the goods imported vide three consignments as mentioned in paragraph 7 (supra). On the basis of the above, penalties of Rs.50,00,000/- each have been imposed on the appellant, under Sections 112(a)(i), 112(b)(i) and 114AA of the Customs Act, 1962. The appellant is contesting these penalties imposed on him.
12.1. It is seen that the issue of mis-declaration alleged in the impugned order is related to three consignments in respect of which the appellant has acted as the freight forwarders. We find that in respect of these three consignments, the appellant was neither the supplier, nor the carrier, nor the importer, nor the CHA. The actual entities involved in the said transactions are as under:
i. Supplier - M/s. Zhenda Foreign Trade HK Limited ii. Carrier on export side - Ship Air Express (HK Limited) iii. Importer - Mr. Sushil Kumar Singh and Badshah (alleged actual importer) iv. Customs House Agent (CHA) - M/s. Sadguru Forwarders Pvt. Ltd represented by Shri Aloke Ghosh Page 17 of 26 Appeal No.: C/75555/2022-DB 12.2. As per the voluntary statements of Mr. Sushil Kumar Singh, Proprietor of M/s. Sri Ram Traders, recorded on 28.06.2017, 25.07.2017 and 11.09.2017, the consignment under the Bill of Entry No. 9948788 dated 03.06.2017 was imported using his IEC and that these goods were actually imported by Badshah. He also inter alia stated that the goods imported under Bill of Entry No. 9948804 dated 03.06.2017 were actually brought by Navneet Kumar, DC; if there is any duty liability on these consignments, the duty is to be paid by the actual importers. We observe that it has also been admitted by Mr. Sunil Kumar Singh in his statements that he had lent his IEC to Badshah and Navneet Kumar for easy money. Thus, the statements of Mr. Sushil Kumar Singh clearly indicate that the goods mentioned in the said two Bills of Entry were not imported by the appellant, Mr. Arnab Sinha.
12.2.1. Further, in respect of the third consignment under Airway Bill No. 21715543404, Shri Sunil Kumar Singh has stated that the same were "in the name of his firm Sri Ram Traders".
12.3. Thus, from the above, it is evident that the appellant herein had nothing to do with the goods imported in the above said consignments.
12.4. We find that the role of the appellant as a Freight Forwarder was limited solely to acting as the Indian counterpart of the overseas carrier and nothing beyond. The appellant had no connection whatsoever with the procurement, shipment, importation, or clearance of the goods in question. In the impugned order, it has been alleged that the appellant and his mother were the directors of the overseas supplier till 23rd October 2017 and hence they assisted the Page 18 of 26 Appeal No.: C/75555/2022-DB alleged mis-declaration of the goods imported in the said three consignments. In this regard, we take note of the submission made by the appellant that he and his mother had resigned from the said directorship w.e.f. 01st March 2017 while the alleged exports were made during the period 05th June 2017 to 01st August 2017. Thus, it is the submission of the appellant that during the relevant period, he was neither responsible nor associated with the state of affairs of the overseas supplier and hence no mala fide can be attributed to the appellant for the impugned consignments.
12.5. We have perused the documentary evidences submitted by the appellant in support of the above claim. For ready reference, copies of the said documents are extracted below:
▪ Resignation of Mr. Arnab Sinha w.e.f. 01.03.2017:Page 19 of 26
Appeal No.: C/75555/2022-DB ▪ Resignation of Smt. Mohua Sinha w.e.f. 01.03.2017:Page 20 of 26
Appeal No.: C/75555/2022-DB ▪ Appointment of Tso Siu Ho as Director w.e.f. 01.03.2017:Page 21 of 26
Appeal No.: C/75555/2022-DB 12.6. From the above, we find that the documentary evidence categorically indicates that the appellant and his mother had resigned from the said directorship w.e.f. 01st March 2017, even though the said application was submitted on 23rd October. The appointment of another person by name "Tso Siu Ho", as Director w.e.f. 01st March 2017, clearly indicates that during the relevant period when the imports took place, the appellant was neither responsible nor associated with the state of affairs of the overseas supplier. In this context, we also note that it is an admitted position in the impugned order itself that the invoices and packing lists were signed by Mr. Hertman Kong on behalf of the overseas supplier, who was not authorized by the appellant. Thus, in view of the above, we find that the appellant had no nexus with such alleged imports whatsoever. Accordingly, we hold that no mala fide can be attributed to the appellant for the alleged mis-declaration in the impugned consignments.
13. The next allegation of the Revenue is that the overseas supplier had no FOREX Account and as such the remittances towards the alleged imports were being received by the appellant through channels other than banking channels. In this regard, we observe that the appellant and his mother were not Directors of the overseas supplier when the alleged import took place. Thus, we find merit in the submission of the appellant that he was completely unaware of the affairs of the company for the said period. Hence, we are of the opinion that non-receipt of proceeds through formal banking channels cannot be attributed to the appellant in absence of any corroborative evidence. Further, the appellant has submitted that during the period when he was the Page 22 of 26 Appeal No.: C/75555/2022-DB Director of the overseas supplier, there was an active bank account in the name of ZFTL. In this regard, we have found that the ld. adjudicating authority has not given any finding contrary to this claim made by the appellant. It is also observed that the Revenue has failed to establish the receipt of any amount by the appellant other than the freight forwarding charges.
Thus, we hold that the allegation of receipt of remittance through other than banking channels under the directorship of the appellant is totally based on assumptions and presumptions and the said claim of the Revenue is not supported by any evidence.
13.1. Thus, we hold that the appellant cannot be implicated in the offence on the above ground.
14. Regarding the penalties imposed on the appellant, we find that such penalties have been imposed under Sections 112 (a), 112(b) and 114AA of the Customs Act, 1962. These penalties have been imposed on the allegations that the appellant has acted both as the overseas supplier and the freight forwarder and provided active assistance in the alleged mis- declaration of the goods imported vide three consignments.
14.1. It is a fact on record that Mr. Sushil Kumar Singh, Proprietor of M/s. Sri Ram Traders, recorded on 28.06.2017, 25.07.2017 and 11.09.2017, the consignment under the Bill of Entry No. 9948788 dated 03.06.2017 was imported using his IEC and that these goods were actually imported by Badshah. He also inter alia stated that the goods imported under Bill of Entry No. 9948804 dated 03.06.2017 were actually brought by Navneet Kumar, DC; if there is any duty liability on these consignments, the duty is to be paid by the actual importers. Admittedly, it has Page 23 of 26 Appeal No.: C/75555/2022-DB also been stated by Mr. Sunil Kumar Singh in his statements that he had lent his IEC to Badshah and Navneet Kumar for easy money. Further, in respect of the third consignment under Airway Bill No. 21715543404, Shri Sunil Kumar Singh has stated that the same were "in the name of his firm Sri Ram Traders". Thus, the statements of Mr. Sushil Kumar Singh clearly indicate that appellant herein had nothing to do with the goods imported in the above said consignments. Consequently, we do not find any justification for imposition of penalties on the appellant on the ground that the goods imported under the above said consignments were mis-declared.
14.2. In this regard, we also take note of the fact that the alleged act of mis-declaration has happened in a foreign territory for which the appellant, who acted as a freight forwarder in India, has been penalised. It is pertinent to observe that the penal provisions of Sections 112(a), 112(b) and 114AA of the Customs Act, 1962 cannot be made applicable for an activity said to have happened in a foreign territory. Thus, prima facie, we are of the view that the penalties imposed on the appellant are liable to be set aside on this ground itself.
14.3. Further, regarding the merits of the penalty imposed on the appellant, it is seen that the appellant's job was merely to collect the delivery order from the airline and pass it on to the Consignee/Importer. He was not expected to be aware about the contents of the packages. Further, the appellant did not have any direct communication with the customs officers or the other alleged perpetrators of the modus operandi as evident from Page 24 of 26 Appeal No.: C/75555/2022-DB the call records produced in the impugned notice. In these circumstances, we are of the view that the appellant cannot be said to have abetted any act or omission rendering the goods liable to confiscation. Thus, the penalty imposed on the appellant under Section 112(a) of the Act is found to be legally unsustainable and hence, the same is set aside.
14.4. As regards the penalty imposed under Section 112(b) of the Customs Act, 1962, it is worthwhile to note that the penalty under this section is imposable only when it is established that the appellant has abetted the mis-declaration of the imported goods knowingly well that the said imported goods were liable for confiscation. However, we find that the appellant was only a freight forwarder. He was neither the supplier, nor the carrier, nor the importer, nor the CHA. The investigation has not brought in any evidence against the appellant regarding his involvement in the alleged mis-declaration. Accordingly, we hold that the penalty imposed on them under Section 112(b) of the Customs Act, 1962 is not sustainable and hence we set aside the same.
14.5. Regarding the penalty imposed on the appellant under Section 114AA ibid., we observe that the penalty under this section is imposable only in those situations where export benefits are claimed without exporting the goods and by presenting forged documents and not in cases of importation. The same view has been taken in the judgment of this Tribunal in case of M/s. Gainwell Commosales Private Limited Versus Commissioner of Customs (Import-I), Mumbai [2025 (8) TMI 1483 - CESTAT, KOLKATA] and in the case of Access World Wide Cargo Vs. Commissioner of Customs, Bangalore [2022 (379) E.L.T. 120].
Page 25 of 26Appeal No.: C/75555/2022-DB 14.5.1. In any event, penalty under Section 114AA can be imposed only upon a 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 for the purpose of the Customs Act. We find that the role of the appellant in this case was limited to freight forwarding work only. It is also observed that while doing freight forwarding work, there was no violation of any of the provisions of Customs Act has been established against the appellant. As such, we hold that penalty under Section 114AA cannot be imposed on the appellant. Reliance in this regard is being placed on the judgement of the Tribunal, Delhi in the case of Mayank Gupta Vs. Commissioner of Customs (Export), New Delhi [(2024) 25 Centax 383]. Accordingly, we set aside the penalty imposed on the appellant under Section 114AA of the Act.
14.6. From the impugned order, we find that the Ld. adjudicating authority has contended that the appellant has introduced Mr. Sahanshah Mallick (alleged actual importer of one of the consignments) to Mr. Sushil Kumar Singh and thus provided active assistance in the mis-declaration. In this regard, we are of the view that merely because the appellant has introduced Mr. Sahanshah Mallick to Mr. Sushil Kumar Singh, it cannot automatically lead to the allegation that the appellant has connived to mis-declare the goods imported. Reliance in this regard is placed on the decision of the Tribunal, Kolkata in the case of Sajal Das Vs. Commissioner of Customs, Airport & Air Cargo Complex Commissionerate [Final Order No. 76182 of 2025].
Page 26 of 26Appeal No.: C/75555/2022-DB
15. In view of the above findings, we hold that of penalties of Rs.50,00,000/- each imposed on the appellant under Sections 112(a)(i), 112(b)(i) and 114AA of the Customs Act, 1962, are not sustainable and hence we set aside the same. Thus, we allow the appeal filed by the appellant, with consequential relief, if any, as per law.
(Order pronounced in the open court on 19.09.2025) Sd/-
(R. MURALIDHAR) MEMBER (JUDICIAL) Sd/-
(K. ANPAZHAKAN) MEMBER (TECHNICAL) Sdd