Custom, Excise & Service Tax Tribunal
Yamal Manojbhai Jagada vs Commissioner Of Customs Airport & ... on 15 May, 2026
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. III
Customs Appeal No. 50352 of 2026
(Arising out of Order-in-Appeal No. CC(A)/CUS/D-I/Airport/41-42/2026-27 dated
17.04.2026 passed by the Ld. Commissioner of Customs (Appeal), New Custom
House, New Delhi)
Yamal Manojbhai Jagada : Appellant
Block No. B-54, Balaji park,
Sadhu vaswani Road,
Rajkot, Gujarat-360005
VERSUS
Commissioner of Customs : Respondent
Airport, IGI Terminal,
New Delhi
APPEARANCE:
Shri Prakash Shah, Senior Advocate, Shri Mihir Mehta and Shri Ashish Batra,
Advocates for the Appellant
Shri Nikhil Mohan Goyal and Shri Ranjan Prakash, Authorized Representative
CORAM:
HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NO.50902/2026
DATE OF HEARING: 05.05.2026
DATE OF DECISION: 15.05.2026
ASHOK JINDAL:
The present appeal is filed by the passenger Mr. Yamal Manojbhai
Jagada (hereinafter referred to as the "appellant"), against the impugned
Order-in-Appeal dated 17.04.2026, passed by the Ld. Commissioner of
Customs (Appeals). The Ld. Commissioner of Customs (Appeals) had
allowed the appeal of the Appellant by way of remand for fresh
2
adjudication, while setting aside the impugned Order-in-Original dated
13.09.2024 passed by the Adjudicating Authority.
2. Aggrieved against the Order-in-Original passed by the Ld.
Adjudicating authority, the appellant filed his appeal before the Ld.
Commissioner of Customs (Appeals), wherein he has raised the following
grounds:
(i) denial of cross-examination of witnesses,
(ii) valuation of one seized Jacob & Co. watch by ignoring the value
of the subject watch shown in the invoice sent by Ms Natela
Lolaev, Chief Legal Officer of the manufacturer M/s Jacon & Co.
vide her email sent on 11.11.2022 to the officers of Customs,
by preferring to rely on alleged copy of uncorroborated invoice
submitted by Sh. Pranav Shankar Sahoo, CEO of M/s Ethos
Limited having masked discount and total amount,
(iii) imposition of redemption fine in case of re-export relying upon
Union of India v. Sankar Pandi - 2018 (360) E.L.T. A214 (S.C.),
(iv) imposition of composite penalty u/s 112(a) and 112(b) of the
Act, and
(v) the quantum of penalty.
3. The Appeal contained the prayers to:-
―I. Set aside Order-in-Original No. 901HK/ADC/Yamal &
Hiren/ICD-PPG/2024-25 dated 13.09.2024 so far it relates to the
Appellant;
2. Allow appeal filed by the Appellant with consequential relief;
3. Pass such order(s) or direction(s) in favour of the Appellant as
the Hon'ble Commissioner may deem fit in the facts and
circumstances of the case and in the interest of justice.‖
3
4. The Department had also filed cross-appeal for setting aside the
same Order-in-Original dated 13.09.2024 with prayers to decide the
following points:
(i) To examine the correctness of Order-in-Original giving the
option of redemption of goods to the appellant contrary to the
provisions of the Customs Act, 1962, establish practice &
judicial pronouncements, and
(ii) To examine the role of co-noticee Mr.Hiren Vithaldas Dhakan for
not imposing any penalty on him in the instant case.
4.1. Vide the impugned common Order, the Ld. Commissioner of
Customs (Appeals) has remanded the matter back to Adjudicating
Authority for fresh adjudication mainly on the grounds of violation of
principles of natural justice by not affording opportunity to the Appellant
to cross-examine one Mr. Pranav Sahoo, and Mr. Ovais Merchant, after
considering manufacturer‟s invoice supported by email confirmation from
the manufacturer. Department‟s appeal was also allowed by directing
fresh adjudication.
5. Learned Counsel appearing for the appellant had invited our
attention to the records and the written submissions filed by the
Appellant in support of the appeal.
6. In response to the instant Appeal, the Department has filed its
written response in two parts. The first part of their written response to
the Appeal read as under-
―Subject- Proceedings before CESTAT in the matter of Mr.
Yamal Manojbhai Jagada Diary No 5133/2026 and Shri
Hiren Vithaibdas Dhakan Diary No. 51134/2026-- reg
4
Please refer to hearing dated 28.04.2026 on the subject mentioned
above.
In this regard, the brief and the prayer of the department in the
above said matter are as under:
Mr. Yamal Manojbhai Jagada (hereinafter referred as `Pax'),
an Indian national holding Passport No. U0806985, arrived at
Terminal-3, IGI Airport, New Delhi from Dubai on 04.10.2022 via
Flight No. EK-516. On the basis of profiling, he was intercepted
by Customs officers after crossing the Green Channel. Upon
being questioned, he denied carrying any dutiable or contraband
goods. However, a detailed personal and baggage search led to
the recovery of seven high-end luxury wrist watches,
including brands such as Jacob & Co., Rolex, and Piaget, along
with one diamond-studded gold bracelet weighing 4 grams
(purity 750) and one iPhone 14 Pro (256 GB). The total
appraised value of the recovered goods was assessed at
Rs. 23,21,74,140/-, involving an applicable customs duty
of Rs.8,93,87,044/-. The goods were initially detained and
subsequently seized under Section 110 of the Customs Act, 1962
on the reasonable belief that they were liable for confiscation.
During the course of investigation, the Pax failed to produce any
valid documents establishing ownership of the seized goods. In
his initial statements recorded under Section 108 of the Customs
Act, he claimed that the watches belonged to his uncle, Mr.
Hiren Vithaldas Dhakan, a Dubai-based jeweller, and that
he was merely carrying them on his behalf. In support of
ownership, certain invoices purportedly issued by M/s Noman
Iqbal Watches Trading LLC, Dubai were submitted through
WhatsApp. However, upon verification, these invoices were found
to be fabricated and not genuine. Further, inquiry revealed that
neither M/s Noman Iqbal Watches Trading LLC nor New Mashoom
Jewellers was an authorized dealer of such high-end luxury
watches.
The investigation further focused on the high-value Jacob & Co.
Billionaire watch, where it was established through verification
front M/s Ethos Ltd., the authorized representative of Jacob & Co.
in India, and from M/s Time in Style Jewellery & Watches, Dubai,
that the watch had originally been sold at a price of
approximately USD 28,00,000 and was procured on behalf
of Mr. Hiren Dhakan through intermediaries. This clearly
indicated that the invoice produced by the Pax was fake
and that there was deliberate undervaluation and
misdeclaration. Statements of concerned persons and
documentary evidence confirmed that the watch was routed
through intermediaries and that payments were made through
banking channels, while the Pax attempted to present a false
ownership trail.
Further investigation, including forensic examination of the Pax's
mobile phone, revealed incriminating WhatsApp chats and
documents indicating coordination with foreign entities and
5
involvement in routing such luxury watches through jurisdictions
like Hong Kong, where no import duty is applicable. The
evidence suggested a structured modus operandi involving
routing of goods, use of intermediaries, and creation of
fake or undervalued invoices to evade customs duty. When
confronted with these evidences, the Pax provided evasive
responses and failed to offer any satisfactory explanation.
Although initially he attributed ownership to his uncle, during the
adjudication stage he changed his stand and claimed ownership
of the goods himself, thereby giving contradictory statements at
different stages of investigation.
The Pax was arrested under Section 104 of the Customs Act on
05.10.2022 and was subsequently granted bail by the competent
court. During the bail proceedings, he deposited an amount
of Rs. 2 crore through TR-6 challan.
A detailed Show Cause Notice dated 31.03.2023 was thereafter
issued proposing as under:-
i. denial of free allowance to the pax;
ii. confiscation of the seized goods valued at Rs.
23,21,74,140/- under Sections 111(d), (j), (l), and (m) of
the Customs Act, 1962;
iii. demand of applicable customs duty amounting to Rs.
8,93,87,044/- along with interest;
iv. imposition of penalties on the pax under Sections 112 and
114AA of the Customs Act, 1962;
v. The notice also proposed appropriation of the amount
deposited and
vi. imposition of penalty under Sections 112 and 114AA of
the Customs Act, 1962 on Mr. Hiren Dhakan for his
alleged involvement in the smuggling activity.
Both the Pax and the co-noticee approached the
Settlement Commission; however, their applications were
rejected vide order dated 24.03.2024 as non-maintainable
under Section 127B of the Customs Act, 1962, with liberty
granted to approach again subject to fulfillment of legal
requirements.
During the Adjudication process in personal hearing (illegible)
sought cross-examination of certain witnesses, which was denied.
Subsequently, during cross-examination proceedings, he
admitted that he had carried the goods into India, was aware of
the applicability of customs duty, and had crossed the Green
Channel without declaration. However, he attempted to retract
his earlier statements implicating his uncle and claimed full
ownership and responsibility for the goods.
6
After considering the records, submissions, and evidences on file,
the adjudicating authority passed Order-in-Original dated
13.09.2024 and ordered as:-
i. denied the free allowance to the pax;
ii. confiscated of the seized goods valued at Rs.
23,21,74,140/- under Sections 111(d), (j), (l), and (m) of
the Customs Act, 1962;
iii. an option was given to redeem the goods for the limited
purpose of re-export to Dubai on payment of a
redemption fine of Rs. 50 lakh under Section 125 of the
Customs Act, 1962;
iv. imposed the penalty of Rs. 50 lakh under Sections 112
and Rs.2 crore under section 114AA of the Customs Act,
1962 on the pax;
v. appropriation of the amount deposited of Rs. 2 crore in
lieu of application filed before the Hon'ble Settlement
Commission, Delhi and
vi. not imposed penalty under Sections 112 and 114AA of the
Customs Act, 1962 due to lack of substantial and
corroborative evidence against Mr. Hiren Dhakan.
The department has reviewed the above case and filed an appeal
before the Commissioner (Appeals) on the following grounds:-
a. the Pax failed to prove ownership of goods with licit
documents/evidences, as he admitted that his employer
and uncle was the owner of goods in his voluntary
statement recorded under section 108 of the Customs Act,
1962 and he can be considered as a `carrier' to whom
redemption of goods could not have been offered in the
case;
b. the Adjudicating Authority should not have given clean
chit to Shri Dhakan and rather fastened him with suitable
penal liability in view of evidences discussed;
c. the quantum of Redemption fine and Penalty under
section 112 of the Customs Act, 1962, imposed by the
Adjudicating Authority is excessively lower then a
quantum suggested by establish practice and judicial
pronouncements.
Further, the pax also preferred appeal before the Commissioner
(Appeals) on the following grounds:-
a. violation of principle of Natural Justice by not allowing
cross examination;
b. error in adopting value of Jacob Bilionaire watch from
evidences mentioned thereof
7
c. error imposition of Redemption fine and penalties
After considering the records, submissions, and evidences on file,
the Commissioner (Appeals) passed Order-in-Appeal dated
17.04.2026 and ordered the matter remand back to-the
Adjudicating Authority for fresh adjudication.
Now the appeals have been filed before CESTAT by Mr. Yamal
Manojbhai Jagada vide Diary No 5133/2026 and Shri Hiren
Vithalbdas Dhakan vide Diary No 51134/2026 and the matters
was listed on 28.04.2026 at 10.30 for removal of defect in
application of the appellant.
The above hearing before the Hon'ble CESTAT was attended by
the learned AR on behalf of the department and raised the issue
of maintainability of appeal before the Hon'ble CESTAT, as
the matter pertains to baggage. After hearing both sides, the
Hon'ble Bench directed the appellants' counsels to remove the
defects in the application by 03.05.2026 and to share the
same with the respondent Department. The matter has been
listed for next hearing on 05.05.2026.
In this matter, it is submitted that the instant matter is pertain to
baggage as the impugned goods were recovered from the
baggage of a passenger travelling from abroad.
The definition of baggage and passenger baggage are as follows:
The term "baggage" is defined in Section, 2(3) of the Act
to include unaccompanied baggage. "2 (3) "baggage"
includes unaccompanied baggage but does not include
motor vehicles";
Section 2(22) of the Act defines the term goods to include
baggage. (22) --goods includes--
(a) vessels, aircrafis and vehicles;
(b) stores;
(c) baggage;
(d) currency and negotiable instruments; and
(e) any other kind of movable property;
77. Declaration by owner of baggage.--The owner of
any baggage shall, for the purpose of clearing it, make a
declaration of its contents to the proper officer.
78. Determination of rate of duty and tariff
valuation in respect of baggage. - The rate of duty and
tariff valuation, if any, applicable to baggage shall be the
rate and valuation in force on the date on which a
8
declaration is made in respect of such baggage under
section 77.
79. Bona fide baggage exempted from duty.--(1) The
proper officer may, subject to any rules made under sub-
section (2), pass free of duty-- (a) any article in the
baggage of a passenger or a member of the crew in
respect of which the said officer is satisfied that it has
been in his use for such minimum period as may be
specified in the rules; (b) any article in the baggage of a
passenger in respect of which the said officer is satisfied
that it is for the use of the passenger or his family or is a
bona fide gift or souvenir; provided that the value of each
such article and the total value of all such articles does
not exceed such limits as may be specified in the rules.
(2) the Central Government may make rules for the
purpose of carrying out the provisions of this section and,
in (a) the minimum period for which any article has
particular, such rules may specify--(a) the minimum
period for which any article has been used by a passenger
or a member of the crew for the purpose of clause (a) of
sub-section (1); (b) the maximum value of any individual
article and the maximum total value of all the articles
which may be passed free of duty under clause (b) of sub-
section (1); (c) the conditions (to be fulfilled before or
after clearance) subject to which any
baggage may be passed free of duty. (3) Different rules
may be made under sub-section (2) for different classes
of persons,
80. Temporary detention of baggage.---Where the
baggage of a passenger contains any article which is
dutiable or the import of which is prohibited and in respect
of which a true declaration has been made under section
77, the proper officer may, at the request of the
passenger, detain such article for the purpose of being
returned to him on his leaving India 1 [and if for any
reason, the passenger is not able to collect the article at
the time of his leaving India, the article may be returned
to him through any 'other passenger authorised by him
.
and leaving India or as cargo consigned in his name].
81. Regulations in respect of baggage. -The Board may make regulations, - (a) providing for the manner of declaring the contents of any baggage; (b) providing for the custody, examination, assessment to duty and clearance of baggage; (c) providing for the transit or transhipment of baggage from one customs station to another or to a place outside India.
Rule 3 of the Baggage Rules, 2016 duty free allowance and Bonafide baggage along with the monetary limits prescribed.
9In the instant case, the impugned goods are accompanied by the pax which is squarely covered under definition of Baggage. He violated the provisions of section 77 of the Act by not declaring the goods on red channel having intention to clear goods without payment of applicable customs duty.
Further the appellate forums against the order of Commissioner (Appeals) in the Customs Act for the purpose of matters pertains to baggage are defined as per the following provisions: -
Sections 129A (1) (appeal by any person aggrieved by such decision or order) any person may file appeal to CESTA if aggrieved by:
(a) any decision or order passed by a Commissioner of Customs as an adjudicating authority; or
(b) an order passed by the Commissioner (Appeals).
3.3 Appeal cannot be filed before CESTAT if the matter relates to:
(i) import or export of goods as baggage;
(ii) import goods not landed or short landed. And
(iii) Drawback.
Sections 129A, 129B and 129C of the Customs Act, 1962 read with the Customs (Appeals) Rules, 1982 and the CESTAT (Procedure) Rules, 1982, In view of the above, the matter of baggage are excluded from the jurisdiction in appeals lies before the CESTAT against the order of Commissioner (Appeals). However, the section 129 DD has specifically covers the appropriate appellate forum i.e. the Revisionary Authority.
129DD. Revision by Central government --
(1) The Central Government may, on the application of any person aggrieved by any order passed under section 1284, where the order is of the nature referred to in the first proviso to sub-section (1) of section 129A, annul or modify such order. 3 [Provided that the Central Government may in its discretion, refuse to admit an application in respect of an order where the amount of duty or fine or penalty, determined by such order does not exceed five thousand rupees.] Explanation,--For the purposes of this sub-section, --order passed under section 128A1 includes an order passed under that section before the commencement of section 40 of the Finance Act, 1984 (21 of 1984), against which an appeal has not been preferred before such commencement and could have been, if the said section had not come into force, preferred after such commencement, to the Appellate 10 Tribunal. 1 [(1A) The 2 [Principal Commissioner of Customs or Commissioner of Customs] may, if he is of the opinion that an order passed by the Commissioner (Appeals) under section I28A is not legal or proper direct the proper officer to make an application on his behalf to the Central Government for revision of such order] (2) An application under sub-section (1) shall be made within three months from the date of the communication to the applicant of the order against which the application is being made: Provided that the Central Government may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the aforesaid period of three months, allow it to he presented within a further period of three months.
(3) An application under sub-section (1) shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf and shall be accompanied by a fee of--
(a) two hundred rupees, where the amount of duty and interest demanded, fine or penalty levied by an officer of customs in the case to which the application relates is one lakh rupees or less;
(b) one thousand rupees, where the amount of duty and interest demanded, fine or penalty levied by an officer of customs in the case to which the application relates is more than one lakh rupees: Provided that no such fee shall be payable in the case of an application referred to in sub-section (1A)] (4) The Central Government may, of its own motion, annul or modify any order referred to in sub-section (1). (5) No order enhancing any penalty or fine in lieu of confiscation or confiscating goods of greater value shall be passed under this section, -
(a) in any case in which an order passed under section 128A has enhanced any penalty or fine in lieu of confiscation or has confiscated goods of greater value, and
(b) in any other case, unless the person affected by the proposed order has been given notice to show cause against it within one year from the date of the order sought to be annulled or modified.
(6) Where the Central Government is of opinion that any duty of customs. has not been levied or has been short-levied, no order levying or enhancing the duty shall be made under this section unless the person affected by the proposed order is given notice to show cause against it within the time limit specified in section 28.] In view of the above the captioned appeal filed by the applicant in the instant case are not maintainable before the Hon'ble CESTAT due to limitations of jurisdiction. Further, if the appeal filed will be heard on the 11 merits of the case, the department may be allowed to give sufficient time to provide the inputs to the appeals as per the following provisions of the existing law: -
The procedure for filing of appeal before CESTAT and disposal thereof is as follows.
I. The appeal is required to be filed in a Form No. CA 3 [Section 129A (1) of the said Act] and Form CA-5 [Section 129 D (4) of the said Act], prescribed under rule 6(1) and rule 7, respectively, of the Customs (Appeals) Rules, 1962.
II. On receipt of notice of appeal, the respondent may file a memorandum of cross objection within 45 days of receipt of notice [Section 129A (4) of the said Act]. The memorandum of cross examination is required to be filed in Form CA 4, prescribed under rule 6 (2) of the Customs (Appeals) Rules, 1982. In the memorandum of cross objections, the respondent can agitate against any part of the order appealed against and such cross objections are disposed of by the Tribunal as if it were an appeal. Rules 15 and 15A of the CESTAT (Procedure) Rules, 1982 allow filing of reply to such appeal within a month by the respondent, and rejoinder to the reply within a month by the appellant.
This issues with approval of the Commissioner of Customs.‖
7. The final part of the Department‟s written response, containing appeal numbers after removal of defects, read as under: -
―APPEAL NO. C/50352 & 50353 of 2026 SYNOPSIS BY DEPARTMENT ―1. In this case, aggrieved by the OIO, both the appellant and department had filed appeal before Commissioner (Appeal) who after considering submissions of both the appellant and the department has remanded back the matter to adjudicating authority.
1.1 Reason for Remand:
The CC(Appeal) found that the AA had denied the appellant the opportunity to cross-examine Sh. Pranav Saboo (CEO, Ethos) and Mr. Ovais Mohammad Iqbal Merchant (owner, Time In Style, Dubai) - whose statements formed the primary basis for the valuation. This denial was held to be a violation of principles of natural justice, necessitating fresh adjudication.
1.2 On Department's Cross-Appeal The CC(Appeal) disposed of the department's cross-appeal (seeking enhancement of penalty and fine) also by way of remand, observing at Paras 6.5 & 6.6 (@ Pgs. 48-49) that 'the points raised in the department's appeal can also be taken care 12 of by the Adjudicating Authority while deciding the case afresh.' No substantive finding was given on the department's grounds.
1.3 Net Effect of the OIA OIO set aside in its entirety - no finding on merits either way. Matter remanded to AA for fresh adjudication including cross- examination opportunity.
Both appellant's and department's cross-appeals disposed of by way of remand.
2. ANALYSIS OF APPELLANT'S WRITTEN SUBMISSION A. On Maintainability (Para 1 of Written Submissions) Yamal's Argument: The appeal is maintainable because (i) the goods are "smuggled goods" and not "bonafide baggage," hence the Section 129A bar doesn't apply; (ii) no Form-I/ICDF was referred to in the SCN; (iii) the Preamble of the impugned Order- in-Appeal itself offers appeal before CESTAT; (iv) citing M. Ambalal (2011) 2 SCC 74.
Department's Counter submissions- Point by Point:
(i) The "smuggled goods # baggage" argument is directly demolished by Ravinder Kumar, final order dated 08.01.2026 of Principal Bench, CESTAT Delhi:
The Tribunal in Ravinder Kumar (paras 17 to 19) dealt with exactly this sleight of hand. It held that the question of whether goods are treated as bonafide personal effects or as smuggled/dutiable goods is a merits argument, not a jurisdiction argument:
"17. The submission of the learned counsel that the gold chain was a personal effect of the appellant and hence was allowed duty free clearance under section 79 and Rule
3 of the Baggage Rules and for that reason, the appellant had no obligation to file a baggage declaration under section 77 will not make any difference. Both sections 77 and 79 pertain to baggage. Personal effects are also baggage. The submissions of the learned counsel that personal effects are allowed duty free clearance under section 79 (as bonafide baggage) and under the Baggage Rules would also show that all personal effects are baggage. The finding of the Commissioner (Appeals) in the impugned order is that the appellant should have filed a baggage declaration under section 77 of the Act and the submission of the appellant is that there was no obligation to file such as declaration because it was part of his bonafide baggage.
18. At any rate, the gold chain in question was part of the baggage- whether it is treated as a bonafide personal effect or as a gold chain imported by the appellant as a passenger and whether it is held that a declaration should have been filed under section 77 or that there was no such obligation. The impugned order, without doubt, pertains to goods imported as baggage."
13"19. Therefore, no appeal would lie against the impugned order before this Tribunal as per the proviso to section 129A(1) of the Act. "
Similarly, appellant cannot escape the baggage bar by calling the watches ―smuggled goods.‖ They were found in his hand baggage upon arrival as a passenger at IGI Airport. The entire proceedings
- SCN, OIO, and OIA - treat and adjudicate them as goods found in the baggage of a passenger. The characterization on merits is irrelevant to the jurisdictional inquiry.
(ii) The M. Ambalal Citation:
Appellant cites M. Ambalal (2011) 2 SCC 74 (CC (Preventive), Mumbai Versus M/s M. Ambalal & Co. No.- 8235 OF 2003 Dated:
- December 9, 2010) to argue that since goods are ―smuggled‖ they are not ―imported goods‖ and hence not covered as baggage. This completely misreads the ratio. The Supreme Court in M. Ambalal held that smuggled goods are not ―imported goods‖ for the purpose of exemption notifications - i.e., the respondent there could not claim duty exemption because the goods were smuggled (Para 13 of the Judgment).
The said judgment was delivered in the appeal filed by the Revenue against the Order passed by the Customs, Excise and Gold (Control) Appellate Tribunal, West Zonal Branch at Mumbai [hereinafter referred to as ‗Tribunal'] in Appeal No.C/138/03 Mum dated 23.06.2003. Para 1 of the said judgment is reproduced below:
―1) This appeal is by the Revenue against the Order passed by the Customs, Excise and Gold (Control) Appellate Tribunal, West Zonal Branch at Mumbai [hereinafter referred to as ‗Tribunal7 in Appeal No.C/138/03 Mum dated 23.06.2003. By the impugned order, the Tribunal has allowed the appeal filed by the respondent and has set aside the original order passed by the adjudicating authority, wherein it had directed the respondent to pay a sum of 2,20,50,125/- (Rupees Two Crores Twenty Lakhs Fifty Thousand One Hundred & Twenty Five only) by way of duty under the provisions of The Customs Act, 1962 (hereinafter referred to as, ―the Act') for release of the goods seized from the possession of the respondent.‖ Kind attention is drawn to Order passed by the Customs, Excise and Gold (Control) Appellate Tribunal, West Zonal Branch at Mumbai in Appeal No.C/138/03 Mum dated 23.06.2003 (M AMBALAL & CO. Versus COMMISSIONER OF CUSTOMS, MUMBAI No.- C/138/03-Mum Dated: - June 23, 2003 Order No. 1536/2003-WZB/C-II) Para 1 of the said order of the Tribunal is reproduced below:14
"In March 1991, the officers of the Collector of Customs (Preventive), Bombay seized from the premises of M. Ambalal & Company and from its employees rough diamonds of the value of Rs. 3.32 lakhs approx and cut and polished diamonds valued at Rs. 84.47 lakhs. In the course of the investigation, statements were recorded of Maganbhai Dayabhai Patel, a partner of the firm and other persons to the effect that the rough and polished diamonds had been smuggled into India by passengers and that the cut and polished diamonds have been obtained by polishing such rough and unpolished diamonds. On the basis of these statements and other documents, notice was issued to M Ambalal & Company and the other persons concerned proposing confiscation of the diamonds under clause (d) of Section 111 of the Act and imposing penalties on various persons concerned.‖ On plain reading of the above Para, it is abundantly clear that rough diamonds were seized from the premises of M. Ambalal & Company and from its employees whereas in present appeal, watches were seized from passenger at International Airport when the said passenger crossed the green channel. In view of above, the judgment relied by the appellant is not applicable in present facts of appeal.
The Hon'ble Supreme Court's ratio is actually against appellant: Para 21: ―'smuggled goods' will not come within the definition of 'imported goods' for the purpose of the exemption notification"
Para 22: "in the light of the objects of the Act and the basic skeletal framework that has been enumerated above, it is clear that one of the principal functions of the Act is to curb the ills of smuggling on the economy. In the light of these findings, it would be antithetic to consider that 'smuggled goods' could be read within the definition of 'imported goods' for the purpose of the Act."
(iii) The Preamble of OIA offering CESTAT appeal:
The fact that the impugned OIA contains a standard form mention of CESTAT cannot vest jurisdiction that the statute takes away. Jurisdiction is conferred by statute, not by a lower authority's clerical recitation. The Tribunal in Ravinder Kumar para 10 makes this abundantly clear - the statutory bar in the proviso to Section 129A(l) is absolute and cannot be waived by consent or by what the OIA says.
"10. What is evident from section 129A is that if an Order is passed by the Commissioner (Appeals) and it relates to any goods imported or exported as baggage, no appeal would lie before this Tribunal against such an order. An alternative remedy in the form of Revision by the Central Government under section 129DD of the Act is provided in those cases where the jurisdiction of this Tribunal is restricted. This section reads as follows.15
Section 129DD. Revision by Central Government.- (1) The Central Government may, on the application of any person aggrieved by any order passed under section 128A, where the order is of the nature referred to in the first proviso to sub-
section (1) of section 129A, annul or modify such order."
It is also submitted that Preamble of OIA states that any person aggrieved by the order may appeal to CESTAT under Section 129A of the Customs Act, 1962 or under the provisions of Section 129DD of the Customs Act, 1962 to the Joint Secretary, Revision Authority.
The CESTAT has consistently held that baggage under the Baggage Rules 2016 includes jewellery and goods on a person arriving from abroad, and the Tribunal lacks jurisdiction to entertain such appeals under the proviso to Section 129A(1).
B. On the Order in Original (Para 2-3 of Written Submissions) Yamal's Argument: The AA rightly found him the owner; rightly imposed penalties under Section 112(a)/(b) and Section 114AA; and rightly directed re-export.
Department's Counter submissions:
This is an admission that the entire case flows from his character as a passenger carrying goods in hand baggage. The OM is itself titled as a baggage adjudication.
C. On the Department's Appeal Before CC(Appeal) (Paras 4-5 of Written Submissions) Yamal's Argument: The CC(Appeal) remanded without giving any substantive finding on the department's grounds, which was erroneous. Department's Counter submissions:
This is actually the department's own ground for cross-appeal - the remand is under challenge by Yamal because he wants the CC(Appeal) to decide on merits. However, from the department's standpoint, CESTAT has no jurisdiction. The Tribunal should not enter into whether the remand was right or wrong. The Commissioner (Appeal) exercised a lawful discretion to remand.‖
8. The Department also relied upon the following judgments which are part of a compilation filed by the learned Departmental Representative : -
(i) 2026 (1) TMI 439 - CESTAT New Delhi - Shri Ravinder Kumar Versus Commissioner of Customs (Airport & General), New Delhi, 16
(ii) 2026 (3) TMI 214 - Madras High Court - Noorul Ayin Versus The commissioner of Customs (Appeals-I), The Joint Commissioner of Customs, Chennai,
(iii) 2025 (4) TMI 463 - CESTAT Chennai - Noorul Ayin, Mohamed Ebrahim Amsath Hanifa, Yusaf Hussain Shahul Hameed, Abdul Salam, Versus Commissioner of Customs Chennai VII Commissionerate,
(iv) 2025 (6) TMI 1190 - CESTAT Mumbai - Mohamed Mansoor Versus Commissioner Of Customs, (Air Port) - Mumbai and Mahabubunissa Versus Commissioner Of Customs, (Air Port) - Mumbai,
(v) 2024 (12) TMI 176 - CESTAT Hyderabad - Sri Abdul Raheem Kaulani Versus Commissioner of Customs, Hyderabad,
(vi) 2022 (10) TMI 100 - Madras High Court - The Principal Commissioner of Customs (Air Port) Versus Ahamed Gani Natchiar And Ahamed Gani Natchiar Versus Principal Commissioner of Customs, Customs Commissionerate-I (Airport), Assistant Commissioner of Customs (AIU), Assistant Commissioner of Customs (Disposal), The Chief Manager
(vii) 2003 (6) TMI 350 - CESTAT, Mumbai - M. Ambalal & Co. Versus Commissioner of Customs, Mumbai
(viii) 2010 (12) TMI 16 - Supreme Court - CC (Preventive), Mumbai Versus M/s M. Ambalal & Co.
9. WHETHER THE APPELLANT SHALL BE RELEGATED TO REVISION U/S 129DD BY HOLDING THE INSTANT APPEAL AS NOT MAINTAINABLE U/S 129A:
9.1. The Show Cause Notice dated 31.03.2023 is issued u/s 124 of the Customs Act, 1962, and records that-
―1. On the basis of APIS profiling, one passenger namely Mr. Yamal Manojbhai Jagada .......... was intercepted by the Customs Officers after he had walked through the Green Channel and was walking towards the Exit Gate of the International Arrival Hall....‖ 9.2. SCN records that-
―4. Consequent upon admission of his role in attempted smuggling of seven (7) high end branded wrist watches, one diamond studded gold bracelet and one new I phone 14, the Pax, 17 Mr.Yamal Manojbhai Jagada was placed under arrest under Section 104 of the Customs Act, 1962 vide Arrest Memo dated 05.10.2022 (RUD-7).‖ 9.3. The SCN not only invoked Section 123 (in Para 33) by alleging reasonable belief of goods seized under Section 110 being smuggled goods, but also proposed, inter alia, confiscation u/s Section 111(d), (j),
(l) and (m) and penalty for omission and commission in ‗smuggling' u/s 112(a) along with (b)(ii), (iii) & (v) and 114AA.
9.4. SCN in Paragraph 39 proposed valuation and duty calculation for watches - ―seized / smuggled‖ [seized u/s 110].
9.5. SCN also proposes demand of duty amounting to Rs.
8,93,87,044/- by proposing valuation of Rs. 23,21,74,140/- for the seized goods.
9.6. The SCN alleges ―smuggling racket‖.
9.7. SCN in Paragraph 31 relies inter alia on the following definition of „smuggling‟ under the Customs Act, 1962 -
―2. Definitions.--In this Act, unless the context otherwise requires,--
―(39) ―‖smuggling‖, in relation to any goods, means any act or omission which will render such goods liable to confiscation under section 111 or section 113;‖ 9.8. The relevant extract of Section 123 of the Act relied in Paragraph 33 of SCN reads as under-
―123. Burden of proof in certain cases.--(1) Where any goods to which this section applies are seized under this Act in 18 the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be........‖ 9.9. In Paragraph 41, one of the proposal to show cause issued to the Appellant is why-
―4) Penalty should not be imposed him under section 112 (a) alongwith 112(b) (ii), (iii) & (v) and 114AA of the Custom Act, 1962 for smuggling of seized goods;‖ 9.10. No ―Indian Customs Declaration Form‖ in Form-1 under Regulation 3 of the Customs Baggage Declaration Regulations, 2013 has been relied upon in the Show Cause Notice.
9.11. The subject Order-in-Original held as under-
―Eligibility of the Noticee No.1 to claim free allowance 7.8 In this case, the Noticee No. l attempted to import trade goods through Baggage mode in commercial quantity, therefore, the same cannot be taken as his bona fide baggage in terms of Section 79 of Customs /\ct. 1962. None of the seized items is meant for the personal use of the Noticee No. 1.‖ 9.12. The impugned Order-in-Appeal issued u/s 128A, in the brief facts also records that-
―2.3 On the basis of APIS profiling, the appellant-1 i.e. Sh. Yamal Manojbhai Jagada was intercepted by the Customs Officers after he had crossed the Green Channel and was approaching towards the Exit Gate of the International Arrival Hall of the Airport....‖ 19 9.13. In the above context, it cannot be denied that the Department has indisputably treated the subject goods as ‗smuggled goods', and not bona fide baggage. Accordingly, the Department proposed confiscatory and penal provisions by issuing SCN u/s 124 of the Act, and invoking Section 123 of the Act. The consistent case of the Department has thus been that the Mr. Yamal Jagada attempted smuggling, and that the goods recovered from his possession near exit gate of arrival hall, were smuggled by him.
9.14. SCN seeks to proceed even qua other co-noticee, who not being passenger, crew or person transferring his residence, is beyond those covered by Baggage Rules.
9.15. The impugned Order-in-Appeal u/s 128A is therefore passed in respect of alleged ‗smuggled goods'.
9.16. Clause (b) of Section 129A(1) permits appeal by aggrieved person to the Appellate Tribunal against - ―(b) an order passed by the Commissioner (Appeals) under section 128A‖. However, the said main Sub-Section (1) is subject to two provisos.
9.17. The controversy is whether the main statutory provision of Section 129A(1) conferring such right to appeal, can be so read in light of the two provisos thereto, so as to extinguish the right and refuse the admissibility of the statutory remedy of appeal by the Appellant for fact finding exercise.
9.18. Sub-Clause (a) of the first proviso excludes an appeal in respect of an order passed by the Commissioner (Appeals) under section 128A, if 20 such order relates to -―(a) any goods importedor exported as baggage‖.Whereas the Respondent seeks to invoke this exclusion Clause of the first proviso, the Appellant contends that exclusion has no application if the appeal relates to any ‗smuggled goods'.
9.19. The Department‟s argument when scrutinized with reference to the law settled by the Hon‟ble Apex Court in in Commissioner of Customs (Preventive), Mumbai Vs. M/s. M. Ambalal & Co. - (2011) 2 SCC 74reveals that the objection to maintainability is outside the context and limited application of exclusion.
9.20. The Baggage Rules, 2016 were issued by the Central Government under Section 79 of the Act. It is not in dispute that these Rules have application only qua ‗bona fide baggage', and not qua ―smuggled goods‖, and hence baggage allowance is also denied.
9.21. It is apt to refer to the following extracts of M.F. (D.R.) Instruction No. 7/2023-Cus., dated 28-2-2023 in regard to ‗Completion of Data Entry in DIGIT -- Issuance of Show Cause Notices and Order-in-Original through DIGIT -- Further Instruction‖ -
―4. Types of Cases to be entered in DIGIT : Only those ―offence cases‖ covered under the following categories need to be entered in DIGIT :
(A) Cases of Outright smuggling (imports as well as exports) covered under the provisions of the Customs Act, 1962;
.......
4.1It is clarified that the cases booked by the Customs formation during the course of normal executive work need not be entered in DIGIT. For illustration, routine cases booked by the Customs officers on international airports involving minor violations of Baggage Rules; or the cases booked by Assessment Groups in Sea Ports, Inland Container 21 Depots (ICDs) and the Air Cargo Complexes (which require spot adjudication)and similar cases booked in courier terminal foreign post offices need not be entered in DIGIT........‖ 9.22. It is thus clear that the cases relating to goods imported as baggage are distinguished even by the Board from the cases relating to goods which are smuggled. Therefore, cases booked by the Customs Officers on international airports involving minor violations of Baggage Rules, which require spot adjudication, need not even be entered in DIGIT, unlike ‗smuggling cases'.
9.23. There is no dispute that an appeal to the Tribunal arising from an order of Commissioner of Customs (Appeals) is excluded in such cases booked by the Customs Officers on international airports involving minor violations of Baggage Rules, which require spot adjudication.
9.24. The Hon‟ble Supreme Court in M. Ambalal & Co. (supra)was pleased to draw statutory distinction carved out in the Customs Act, 1962 in „imported goods' and ‗smuggled goods'and held that -
―21. In short, question before us is: whether goods that are smuggled into the country can be read within the meaning of the expression ―imported goods‖ for the purpose of benefit of the exemption notification? We are of the view that ―smuggled goods‖ will not come within the definition of ―imported goods‖ for the purpose of the exemption notification, for the reason, the Act defines both the expressions looking at the different definitions given to the two classes of goods: imported and smuggled, and we are of the view that if the two were to be treated as the same, then there would be no need to have two different definitions.
22―22........In the light of these findings, it would be antithetic to consider that `smuggled goods' could be read within the definition of ‗imported goods' for the purpose of the Act.....‖ ....(emphasis supplied).
9.25. Significantly, the issue recorded by the Hon‟ble Supreme Court in Para 9 of the said judgment i.e. "(c) Whether the Baggage Rules were correctly applied by the Commissioner of Customs, while deciding the duty payable by the respondent-firm‖ was left to be considered by the Tribunal.
9.26. The Tribunal, thereafter, in M. Ambalal & Co. vs Commissioner of Customs (Preventive) - 2012 (281) ELT 432, considered the issue whether or not to treat the confiscated goods as „Baggage‟ by applying the said judgment of Hon‟ble Supreme Court as follows-
―5.5 The next issue for consideration is whether the duty is liable to be paid on the confiscated goods by treating them as baggage under Chapter Heading No. 98.03 of the Customs Tariff Schedule. While the revenue's contention is that since the goods have been brought by way of passenger baggage, the baggage rate of duty is applicable. The learned counsel for the appellant contests this point and submits that the rate of duty prescribed under Chapter 98 in respect of baggage can be applied only if the conditions therein are satisfied.The condition to be satisfied are that the goods must be imported by the passenger in his baggage and in respect of baggage, as per Section 78 of the Customs Act, the rate of duty applicable will be the rate in force on the date on which a declaration is made in respect of such baggage under Section 77.In the instant case since the goods are smuggled and the Apex Court has held that smuggled goods cannot be treated as imported goods, the question 23 of classifying them as baggage under Chapter 98 does not arise at all.......‖ 9.27. Thereafter, in Lark Chemicals Pvt Ltd vs. Commissioner of Cus. -
2014 (301) ELT 138, the Tribunal held that-
―6.9 An argument has been advanced by the counsel for the appellant that duty cannot be demanded at the highest (baggage) rate in view of the law laid down by the Hon'ble Apex Court in the case of M. Ambalal & Co. cited supra and the decision of this Tribunal in the said case subsequent to the Apex Court judgment. There is merit in this argument. In the instant case for the purpose of calculation of duty, a rate of 60% adv. has been adopted which is the rate applicable for passenger's baggage under CTH 9803. The said heading applies to ―All dutiable articles imported by a passenger or a member of a crew in his baggage‖. In the Ambalal case cited supra, the Hon'ble Apex Court held that smuggled goods cannot be considered as imported goods.Therefore, even if the goods have been brought into India by concealing the same in the baggage, the goods cannot be classified as baggage.‖ 9.28. Since, as demonstrated hereinabove, the case of the department had all along been that the subject goods are ―smuggled goods‖, the department cannot press into service the exclusion clause applicable only to ―imported goods‖. The first proviso excludes an appeal to Tribunal, only if the order of Commissioner of Customs (Appeals) is in respect of -
―any goods imported or exported as baggage;‖ and cannot be invoked by the Respondent having itself invoked Section 110, 123 and 124 of the Act and alleging the subject goods as ―smuggled goods‖.
The subject confiscated goods are not ―goods imported as baggage‖.
The strict interpretation of the exclusion clause warrants maintaining the 24 distinction held by the Hon‟ble Supreme Court in "smuggled goods‖and "imported goods‖.
9.29. Department could not show any judgment of the Hon‟ble Apex Court overruling the law laid down in the M. Ambalal‟s case, drawing a distinction between ‗imported goods' and ‗smuggled goods' for the purpose of the Customs Act, 1962. Other judgments of any High Court and / or Tribunal, which have not considered the ratio of M. Ambalal‟s case for this statutory distinction between ‗imported goods' and ‗smuggled goods' for the purpose of the Customs Act, 1962 also cannot come to the aid of the Department to support its objection to maintainability.
9.30. Such conclusion on maintainability of appeal is also in consonance with the statutory intent and scheme of the Act, apart from being in consonance of the law laid down by the Hon‟ble Supreme Court.
9.31. Even in view of the second proviso to sub-section (1) of the Section 129A, the Tribunal cannot refuse to admit the present appeal against an Order u/s 128A. It is cardinal rule of statutory interpretation that a latter proviso can restrict the application of the main section and the former proviso. This second proviso to sub-section (1) of the Section 129A restricts discretion of the Tribunal including in respect of an order passed by the Commissioner (Appeals) under section 128A, to refuse to admit an appeal only to those cases, where the value of goods absolutely confiscated or in any disputed case involving duty / differential duty, other than a case where the determination of any question having a relation to therate of duty of customs or to the value of goods for 25 purposes of assessment is in issue, or the amount of fine or penalty by such order, does not exceed two lakh rupees. Consequently, the Tribunal cannot refuse to admit the present appeal in respect of an order passed by the Commissioner (Appeals) under section 128A, as the case does not fall under those specified in second proviso. It is also not the case of the Respondent that present appeal can be refused under the second proviso. The second proviso clearly maintains the statutory intent of not ousting a statutory right of appeal before the Tribunal, which is often construed as the final fact-finding authority. Significantly, further appeals against an Order of Tribunal before High Court or the Supreme Court, is only on any substantial question of law.
9.32. Further, the distinction between an "appeal" and a "revision" is a foundational concept in procedural law. While both are corrective mechanisms, they operate on entirely different planes of jurisdiction, scope, and statutory entitlement. A statutory right of appeal cannot be lightly ousted or relegated to a mere revisional remedy. The procedural prerogative of revisionary authority is only a discretionary, supervisory jurisdiction exercised to keep subordinate authorities within the bounds of their legal authority, neither involving re-appreciation of evidence on questions of facts, nor amounting to a deemed continuation of the proceedings, as in an appeal. The Hon‟ble Supreme Court has repeatedly cautioned against blurring the lines between appellate and revisional jurisdictions. The Hon‟ble Supreme Court in Hari Shankar v. Rao Gari Chowdhury(AIR 1963 SC 698 - 4 Judges)which is the bedrock for distinguishing the two remedies, explicitly held:
26"7. The distinction between an appeal and a revision is a real one. A right of appeal carries with it a right of rehearing on law as well as fact, unless the statute conferring the right of appeal limits the rehearing in some way... The power to hear a revision is generally given to a superior Court so that it may satisfy itself that a particular case has been decided according to law......The right there is confined to jurisdiction and jurisdiction alone...."
9.33. In Hindustan Petroleum Corporation Ltd. v. Dilbahar Singh(2014) 9 SCC 78,a Constitution Bench emphatically ruled to the same effect [Para 43]. Even a revisional court cannot act as a second appellate court. The Court clarified that a revisional authority cannot overturn a finding of fact simply because another view is possible, and cannot reappreciate or reassess the evidence for coming to a different findings of fact. As against this, an appellate remedy is a robust, statutory shield guaranteeing a comprehensive review of both fact and law. If an appeal is erroneously relegated to revision, the aggrieved person is deprived of factual scrutiny to have evidence re-appreciated.
Therefore, to treat an appealable order as merely revisable, would act contrary to the legislative mandate that prioritizes the exhaustive remedy (appeal) over the limited one (revision). The right of appeal being a vested statutory right, by a judicial interpretation as sought by the Respondent, one cannot diminish a substantive right into a discretionary privilege. An appellate forum cannot artificially narrow its own scope of review to relegate a party for revision to quickly dispose of a matter. Doing so would amount to an abdication of its statutory duty to entertain the appeal.
2710. Accordingly, the Appellant cannot be relegated to revision u/s 129DD by holding the instant appeal as not maintainable u/s 129A. The objection on maintainability is thus liable for rejection.
11. It would be apt here to also refer to a recent order dated 21.01.2026 of the Tribunal in Customs Appeal No. 51745 of 2025 - Salt Experiences & Management Pvt Ltd vs Commissioner of Customs (NS-V) arising from an Order-in-Appeal dated 26.08.2025 passed by Commissioner of Customs (Appeals), New Delhi, in a case where similar objections of maintainability in view of the first proviso in a case of foreign currency, as well as seeking deferment till period of cross-
objection is over, were raised by the Department. The Tribunal rejected the second objection, inter alia, with the following observations: -
―7. Learned Authorized Representative set the ball rolling with preliminary objections, some unarguably frivolous and others seemingly legal. It was contented that impugned foreign currency was handled by travelling outbound passengers as ‗baggage' and, therefore, excluding purview of appellate jurisdiction under section 129A of Customs Act, 1962 by operation of first proviso therein. It was further contended that the prerogative of the respondent-Commissioner to file ‗memorandum of cross- objections', as set out in section 129A (4) of Customs Act, 1962, would be jeopardized unless disposal of these appeals was deferred.....‖ ―11. The plea for deferment of the proceedings till the deadline for filing ‗memorandum of cross-objections' has passed appears to be hedge on a possibility that may not even be probable. Learned Authorized Representative was unable to furnish any correspondence on such contingency being under contemplation for the claim to have any credibility. The impugned order of 26th August 2025 had held two of the components of the detriments against the appellants to be indefensible with consequent manumission from fine under section 125 of Customs Act, 1962 besides reducing penalties; the competent Committee of Commissioners has not exercised its prerogative empowerment under section 129D of Customs Act, 1962 to direct challenge to this outcome as not being legal and proper. Doubtlessly, ‗memorandum of cross-objections' offers ‗kiss of life' but, without 28 expanding the scope for cavil, merely lengthens the period of limitation. However, from ‗(4) On receipt of notice that an appeal has been preferred under this section, the party against whom the appeal has been preferred may, notwithstanding that he may not have appealed against such order or any part thereof, file, within forty-five days of the receipt of the notice, a memorandum of cross-objections verified in such manner as may be specified by rules made in this behalf against any part of the order appealed against and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3).' (emphasis supplied) in section 129A of Customs Act, 1962, it is unarguably clear that, should such response occur, the two are not to be bound to disposed off together. Be that as it may, such memorandum is limited to the extent that the impugned order allowed the plea of the appellant herein and, should that ever be filed, takes on the hue of an appeal which is amenable to disposal without referencing the decision emanating from this proceeding. Furthermore, there is no contest on the facts in the present proceedings; only that the acts of commission were within the ambit of law and that contravention of the law is beyond attendance by customs law. We are of the considered view that, in the context and the circumstances, plea for deferment has not been made in good faith.‖ .....(emphasis supplied)
12. The above observations also apply in regard to objection in the first part of the response filed by the Revenue to indirectly seek deferment till the period for filing cross-objections, particularly in view of the following concluding submission filed by the Department in writing: -
―......The Tribunal should not enter into whether the remand was right or wrong. The Commissioner (Appeal) exercised a lawful discretion to remand.‖ 12.1. Accordingly, we hold that the said objection for deferment has no merits.29
13. Written response by Department and written submissions by the Appellant having been filed before the commencement of hearing granted to the parties sufficiently satisfies the principles of natural justice in the instant Appeal.
14. On merits of the Appeal, the Appellant contends that the Ld. Commissioner of Customs (Appeal) has erroneously remanded the matter. As per Section 138B of the Act, the issue of cross-examination would arise only if the concerned person was first examined by the Department before the Adjudicating Authority. It is settled law in view of Section 138B of the Act that if the Department chooses not to examine any witness, it amounts to giving up the statement of such witness and that such statement is not relevant. Therefore, there was no question of remanding the matter for cross examination of Pranav Saboo and Owais Merchant. The Ld. Commissioner of Customs (Appeal)ought to have computed the value for the purpose of duty based on the manufacturers invoice which has been confirmed by Ms. Natelal Lolaev, Chief legal Officer of the manufacturer Jacob Watches. Further, invoice produced by Sh. Pranav Saboo and confirmed by Sh. Owais Merchant was a photocopy, and cannot be relied upon, as the said invoice was an incomplete manipulated invoice, only mentioning Retail price while having blanks /masked at various places, including on the Discount, Price, Subtotal and Grand total. In fact, the Ld. Commissioner of Customs (Appeal)has itself in the impugned Order disbelieved the statement of Sh. Pranav and Sh. Owais, while giving credence to the invoice furnished and confirmed by Ms. Natelal Lolaev. Written 30 submissions were filed and relied upon to give synopsis of the case of the Appellant.
14.1. Vide the aforestated written responses, in two parts, the Department has demonstrated the allegations and the manner in which the appeal came to be filed. It is categorical concluding contention of the Department that - "The Tribunal should not enter into whether the remand was right or wrong. The Commissioner (Appeal) exercised a lawful discretion to remand.‖ With this concluding stand taken by the Department in written responses to the Appeal, it is clear that according to the Department the Order-in-Appeal is correct exercise of discretion by the Commissioner of Customs (Appeals), and since the Department stand is that the Tribunal shall not enter into whether the remand was right or wrong, there is no question of any appeal by the Department by way of cross-objection. Since, written response to the Appeal has been filed with compilation of judgments before commencement of final arguments on the appeal, the requirements of natural justice are satisfied.
15. The Show Cause Notice in the instant case mainly referred and relied upon, inter alia, upon seizure Panchanama dated 04.10.2022, various statements of the Appellant, Mr. Pranav Shankar Saboo, and Ovais Mohammad Iqbal Merchant to prove smuggling and for confiscation of seized smuggled goods, and liability for penalties proposed. It also relied upon online retail sale price of Jacob & Co., various Invoices and communications for the purpose of ascertaining valuation of seized watches, forensic - whatsapp chats and other details.31
15.1. Regarding the role of the Appellant the SCN alleged that-
―35.2 Role played by Mr. Yamal Manojbhai Jagada:- Mr. Yamal Manojbhai Jagada alias Mr. Yamal has come up as a key person who himself deliberately put himself in the show of smuggling precious watches. He has equally been connived with his uncle Mr. Hiren Dhakan in the syndicate of smuggling of the high end watches / iphone / Golf Bracelet from overseas. There are specific evidences in the form of exchange of whatsapp chat between Mr. Yamal and the foreign nationals viz. Mr. Timothy Lai, Ms. Maggie, Mr. Thong Phan, Mr. Thong Philipino HK, Mr. Talib and Mr. Abu Baker wherein Mr. Yamal has discussed the business negotiations of precious watches (including those attempted to be smuggled). Even after being apprehended while attempting to smuggle precious watches and other goods, as discussed in para supra, he alongwith his uncle Mr. Hiren Dhakan further went to the extent that they submitted completely fake invoices, in claim of legal ownership of goods, to the department and even before the Principal District and Session Judge (through appeal against the Judicial Custody Order) thus making mockery of the department and even utter disregard to the Judicial system of India . Moreso, Mr. Yamal has specifically stated in his statement tendered under section 108 of the Customs Act, 1962 that he was quite well aware about applicability of customs duty upon high end watches however, he attempted to get clear the goods in order to evade the applicable duty. Thus it has been proved that Mr. Yamal Manojbhai Jagada equally connived and responsible in import of watches/other goods without payment of applicable duty and in contravention of the various provisions of the Customs Act, 1962 for which Mr. Yamal is also liable for imposition of penalty upon him for his role in omission and commission of the offences as discussed in para supra.‖ 15.2. Regarding the valuation and applicable duty on the seized smuggled goods, the Show Cause Notice proposed valuation in two Tables in Paragraphs 38.1 and 38.2 as follows-
3216. In the reply to the Show Cause Notice, the first contention was referring to Section 138B of the Customs Act suggesting necessity of examination-in-chief for considering any statement relevant in adjudication proceedings. It was specifically stated that-
33―a...........If, after examination of any person, his statement is considered relevant for the purpose of adjudication, an opportunity may please be provided to me for cross-examination of only such person.....‖ 16.1. The Appellant did not dispute the liability to confiscation of seized smuggled goods, but sought an option to redeem the seized goods. For valuation he specifically relied on Paragraph 37.5 of the Show Cause Notice, which shows confirmation by:
"37.5. Further, via email date 11.11.2022 Ms NatelaLolalev, Chief Legel Officer, Jacob Watches, provided a copy of the Invoice no. 622 dated 22.12.2020. The invoice was in the name of M/s Timeln Style Jeweller& Watch, Jewel Plaze, Deira Gold Souq, Dubai, UAE at the retail price of $2,800,000/- and in that invoice the final discounted price of $8,30,000/- was mentioned, after giving a discount of 70.36% and it was shipped to M/s Bueono Jeweller Co. Ltd, Unit A2, 8/F Chian Insurance Building, Kowloon, TST, Hong Kong, through MALCA AMIT Courier (Tracking No. 22554 285).‖ 16.2. The Appellant accordingly in his reply admitted the valuation and applicable duties (at Pages 115-116) as follows: -34
16.3. The Appellant also informed that the aforesaid customs duty amount was already deposited by him alongwith interest for the purpose of settlement.
16.4. However, his settlement application was already rejected for want of Baggage Declaration and application of Section 123 qua seized smuggled goods.35
16.5. The Appellant in his further detailed reply stated that in order to earn some money, the Appellant procured high end luxury watches from M/s Noman Iqbal Watches Trading LLC, Dubai of his own on sale approval basis. Under this arrangement no payment is required to be made at the time of procurement of the goods and the same shall be made as and when the goods are sold. He intended to show these watches to the High Net Worth Individuals in Delhi with the help of various established watch dealers of Delhi. After showing these watches to the prospective customers, he intended to take them back to Dubai.
In case of finalisation of deal for sale of any watch in India, further process was to be carried out by Mis Noman Iqbal Watches from Dubai.
He submitted that it was a common practice among shopkeepers in Dubai.
16.6. Only the Appellant claimed ownership of all the seized goods having procured them on sale approval basis and submitted e-mail communications dated 07.10.2022 and 03.03.2024 received from Noman Iqbal watches and denied allegations of involvement in any smuggling racket as alleged.
17. In the adjudication proceedings, the Department chose not to examine any person as mandated by Section 138B for considering the statements as relevant.
18. Vide Order-in-Original dated 13.09.2024, the adjudicating authority confiscated the seized smuggled goods under Section 111(d), 111(j), 111(l) & 111(m) of the Act.
3618.1. The adjudicating authority on the aspect of valuation concluded that: -
―7.3.14 However, I do not agree with the price of Jacob Billionaire Watch stated by the Noticee No. l in his reply due to the following reasons:-
(a)Mr. Pranav Shekhar Sahoo, CEO of Ethos Limited Delhi and Mr. Owais Merchant, Proprietor of M/s Time In Style Jeweelery & Watch, Dubai in their respective voluntary statements recorded under Section 108 of the Customs Act, 1962 have accepted that the value of the impugned Jacob Billionaire Watch is US$ 2.8 Million;
(b) Mr. Ovais Merchant, Proprietor of M/ s Time ln Style Jewellery & Watch, Dubai in his statement submitted that he had sold the said Jacob Billionainaire Watch for US$, 2.8 Million and earned a profit of 2% which comes to US$ 56,000/-. He also submitted his bank statement showing payment of approximately US$ 2.8.
Million during the period 20.06.2020 to 12.0l.2021.
(c) Mr. Pranav Shekhar Sahoo, CEO of Ethos Limited Delhi in his statement submitted that even in exclusive distributor contract, Jacob & Co. does not offer more than 60% discount on any of their models.
(d) On line price of Jacob Billionaire Watch on the w'ebsite of Chrono24.com, Piaget.com and authenticwatches.com and website of Jacob & Co. was US$33,69,727 /- which comes to Rs. 27,09,26,051/-
(e)Copy of Invoice No. 622 dated 22. i2.2020 on 11.11.2022 sent by Ms Natela Lolale appears to be an after thought and calculated action.
(f) The Nolicee No. I has not submitted any genuine invoice/documentary evidence which would have been issued in his name.
Therefore, in view, of these facts, I hold that the original value of the Jacob Biliionaire Watch seized by the officers of customs vide Seizure Memo dated 04.10.2022 is US$ 2.8 Million only.‖ 37 18.2. The Appellant‟s request to re-export was accepted, by giving him an option to redeem the goods on payment of redemption fine of Rs.
50,00,000/- under Section 125 of the Act for re-export to Dubai only, within 120 days. He was held liable to pay applicable duty computed at Rs. 8,93,87,044/- with interest, being importer of the seized goods. It was observed that-
―7.6 In this case, the Noticee No. I is the importer of the seized goods and is therefore, liable to pay applicable custom duty along with interest. The applicable custom duty in this case comes to Rs. 8,93,87,044/-. The Noticee No. 1 has already deposited an amount of Rs. 2,84,07,664/-.‖ 18.3. He was held liable for penalties under provisions proposed in the Show Cause Notice and a composite penalty of Rs. 50,00,000/- u/s 112(a) and 112(b), and of Rs. 2,00,00,000/- u/s 114AA of the Act was imposed on him.
19. It is seen that the Ld. Commissioner of Customs (Appeal), on the aspect of valuation had, inter alia, observed that: -
―6.1.2 Thereafter, during the adjudication proceedings and instant appeal proceedings appellant-1 has presented another invoice No.622 dated 22.12.2020 claimed to have been issued by Jacob & Co to M/s Time In Style Jewellery & Watch, Dubai showing value as 8,30,000 USD claiming to have been received by them through Mr. Ovais Merchant of M/s Time In Style, Dubai. The appellant-1 also claimed that this invoice was also sent by the Jacob & Co to the Customs department on 11.11.2022. I find that para 37.5 of the show cause notice reads as under:
37.5. Further, vide email dt.11.11.2022, Ms Natela Lolaev, Chief Legal Officer, Jacob Watches, provided a copy of the 38 Invoice No. 622 dt.22.12.2020. The invoice was in the name of M/S Time In Style Jewellery & Watch, Jewel Plaza, Deira Gold Souq, Dubai, UAE at the retail price of $2,800,000/-and in that invoice the final discounted price of $8,30,000/- was mentioned, after giving a discount of 70.36% and it was shipped to M/S. Bueono Jewellery Co. Ltd., Unit A2, 8/F China Insurance Building, Kowloon TST, Hong Kong, through MALCA AMIT Couriers (Tracking No. 22554285).‖ I find that the above fact of receipt of copy of said invoice by the department vide aforementioned email stands acknowledged by the department as this fact finds mention in para 37.5. of the show cause notice. The image of the said invoice is as under:39
As regards the discounts being offered by M/s Jacob and Co., it is also on record that Sh. Pranav Shekhar Saboo, Chief Executive Officer of M/s Ethios Limited, Delhi, has averred vide his statement dt.18.10.2022, in answer to Questions No.13, as under: ―..............As per my knowledge, a discount of more than 90% is not possible after getting real price of the watches from Jacob website HTTPS://JACOBANDCO.COM/TIMEPIECE-PRICES. Even in our exclusive distributor contract, Jacob & Co. is not offering more than 60% discount on any model. I have never heard of a discount of 90% in the watch industry all over the world.......‖ From the above, it is evident that the watch manufacturer [or main supplier] is offering hefty discounts, though quantum of discount can be a point of dispute.
6.1.3 In this regard, I find that the department has disregarded the discounted invoice on the grounds that the department does not take cognizance of unsolicited emails as their genuineness and truthfulness cannot be relied upon. The department has relied upon invoice showing value 28,00,000 USD considering it to be a reliable evidence having legal validity being submitted under legal obligation to submit evidence and making true statement after summon issued by the department to produce evidence and through a statement tendered under Section 108 of the Customs Act, 1962.
However, it is observed that the sequence of events regarding receipt of Invoice No.622 dt.22.10.2020 by the department, are as under:
- On 19.10.2022, Ms. Natela Lolaev, Chief Legal Officer, of Jacob & Co., replied vide email dt.19.10.2022, in response to the department query, regarding the genuineness of the invoices allegedly issued by Jacob & Co to Noman Iqbal watches and submitted by appellant 1 that the invoice submitted by the appellants is not genuine and that they did not generate the said invoice.40
- Sh. Pranav Shekhar Saboo, Chief Executive Officer of M/s Ethos Limited, Delhi, vide his statement dt. 02.11.2022, in reply to question 6 stated that he is submitting a copy of real invoice received on the email id of Managing Director of their company Sh. Yashovardhan Saboo on 02.11.2022, from Vadim Lampert, sales manager of Jacob & Co.; that in this real invoice, the said watch was sold to TIME INSTYLE JEWELLERY, DUBAI, at a price of $2,800,000/-. He also informed that Ms. Natale Lolaev is Chief Legal Officer of Jacob & Co.
Thus, I do not find any substance in the contentions of the department that email dt.11.11.2022, of Ms Natela Lolaev, Chief Legal Officer, Jacob Watches, forwarding a copy of the Invoice No. 622 dt.22.12.2020 was not considered on the grounds of it being unsolicited. Earlier also during the investigations, email dt.19.10.2022 from the same source has been taken on record by the department and the same has been heavily relied upon by the department. When the same source has sent another email furnishing any document/information in connection with the ongoing inquiry, I find that the same cannot be simply discarded by stating that the same is unsolicited‖
20. Significantly, Mr Owais merchant in email dated 12.12.2024 [at pages 320 to322] has referred to his earlier email dated 12.11.2022, copy of actual invoice no. 622 dated 22.10.2022 enclosed therewith for US$ 830,000/-, resiled from his statement explaining the circumstances in which the statement was trusted upon him contrary to the true records, and had also shown his willingness to appear through video conferencing to affirm the contents of the email.
41 4220.1. Mr Owais Merchant in his further email which is on record at Page 337 had again stated that: -
43―(i) The correct value of the subject Billionaire -III Watch is US$ 8,30,000/- which was finalised after negotiations with M/s Jacob & Co..
(ii) An amount of US$ 8,30,000/- was paid by my company for the said watch.
(iii) As per directions of M/s Jacob & Co., US$ 8,30,000/- was paid in installments by my company to M/s Haut de Gamma, Singapore, authorised distributor of M/s company.
(iv) My company regularly purchases watches of Jacob & Co.
from M/s Haut de Gamma, Singapore who are authorised distributors of M/s Jacob & Co. in Singapore availability of funds with us.
During the period January 2020 to December, 2020, my company purchased several different watches manufactured by M/s Jacob & Co. from M/s Haut de Gamma, directly from M/s Jacob & Co. @ US$ 8,30,000/- vide Invoice No. 622 dated 22nd December, 2020. My company made payments for three watches to M/s Haut d availability of funds with us.‖
21. With such evidence, once the Commissioner of Customs (Appeal) has himself questioned the reliability of the photocopy of the alleged invoice submitted by Sh. Sahoo, stated to be raised by the Manufacturer to Sh. Owais Mohammad Iqbal Merchant, owner of M/s Time In Style Jewellery & Watch, their statements pales into insignificance being uncorroborated and inadmissible.
4422. Hon‟ble Allahabad High Court in Commissioner of Central Excise, Meerit-1 vs Parmarth Iron Pvt Ltd - 2010 (260) ELT 514 (All.)after considering Section 9D of Central Excise Act, which is pari materia with Section 138B of Customs Act, and various precedents concerning the said provision, had observed that-
―16. We, therefore, have no hesitation in holding, that there is no requirement in the Act or Rules, nor do the principles of natural justice and fair play require that the witnesses whose statements were recorded and relied upon to issue the show cause notice, are liable to be examined at that stage.If the Revenue choose not to examine any witnesses in adjudication, their statements cannot be considered as evidence.However, if the Revenue choose to rely on the statements, then in that event, the persons whose statements are relied upon have to be made available for cross-examination for the evidence or statement to be considered.‖
23. Once their statements itself are inadmissible and unreliable as per the Ld. Commissioner of Customs (Appeal), and the Department had chosen not to examine these witnesses in adjudication, the question of Remand for cross-examination by the appellant was even otherwise wholly unwarranted. The Ld. Commissioner of Custom (Appeal) has himself considered the e-mail of Ms Natela Lolaev, Chief Legal Officer, Jacob Watches as reliable and genuine, he ought to have re-assessed the value on merits based on the said findings, instead of remanding the matter for fresh adjudication. As against the Invoice found to be genuine, the photocopy of invoice which is relied in the show cause notice and adopted for valuation in the adjudication order, has blanks so far as the columns ―discount %‖, ―price‖, ―sub-total‖ and ―Grand Total‖ 45 are concerned. No original thereof was produced. Even Mr. Ovais Merchant of M/s Time In Style, Dubai has resiled from his statement and has disowned the photocopy of invoice submitted by Mr. Sahoo, by retracting from his statement. The Ld. Commissioner of Customs (Appeal) instead of accepting the invoice containing all the particulars and confirmed by the manufacturer, which is clear from paragraph 37.5 of the show cause notice itself, erroneously remanded the matter for cross-examination for the purpose of valuation.
24. The Department‟s cross appeal against the appellant herein was disposed of, and in effect allowed by way of remand, only on the ground that „the points raised in the departments' appeal can also be taken care of by the Adjudicating Authority while deciding the case afresh'.
25. It is seen that the Department has failed to establish the genuineness of the photocopy of the Invoice furnished by Mr. Sahoo for the purpose of valuation of the Jacob & Co. watch. The Appellant consistently claimed himself as importer and owner in various judicial proceedings. No other person has claimed „ownership‟. He has also deposited substantial amounts for seeking release of goods seeking re-
export. Mere statements obtained in custody cannot denude him from the status of importer and legitimate claimant.
26. In view of the above, the valuation adopted by the Department could not be established in accordance with law. The adjudicating authority has erred in not accepting the valuation based on manufacturer‟s invoice issuance of which was confirmed by the manufacturer to the Department by email, and has mechanically adopted 46 the valuation proposed in the Show Cause Notice. The Ld. Commissioner of Customs (Appeal) ought to have accepted the value of US$ 8,30,000/
- as per the Invoice confirmed by the Chief Legal Officer of the Manufacturer, after having recorded positive observations in this regard.
The same is accepted by the Tribunal as reliable for the purpose of valuation.
27. The Show Cause Notice, although relies on various WhatsApp chats, the same is of no consequence for the subject confiscation. The allegations of smuggling racket are on surmises and conjectures and are not established from the chats. Significantly, the proposal for confiscation is also therefore limited to the seized smuggled goods.
28. The Appellant had earlier approached Settlement Commission by admitting liability on this value of US$ 8,30,000/ - and exhibited co-
operation. The same was dismissed on the ground of maintainability. The goods continued to remain in custody of the Department even after the payments made.
29. In the above circumstances, confiscation is upheld. The value of US$ 8,30,000/ - as per the Invoice confirmed by the Chief Legal Officer of the Manufacturer Jacob & Co. is accepted, and the value based on uncorroborated Invoice produced by Mr. Sahoo containing blanks in the columns ―discount %‖, ―price‖, ―sub-total‖ and ―Grand Total‖ is rejected.
Qua other seized goods there is no dispute of valuation. There is no dispute on the fact that the confiscated goods are in possession of the 47 Department from the date of seizure from the possession of the Appellant.
30. In Rational Art & Press Pvt Ltd vs Comm. Of Customs (Imports) - 2007 (215) ELT 522, the Tribunal relying upon constitution Bench judgment in Amba Lal vs Union of India - 1983 (13) ELT 1321 (SC) was pleased to observe that: -
―9. The constitution Bench of the Hon'ble Supreme Court, in the case of Amba Lal v. Union of India as reported at 1983 (13) E.L.T. 1321 (S.C.) has held that ―Redemption fine - No condition can be imposed, while giving offer for redemption of goods‖. Respectfully following the judgment, the impugned order (in this case), imposing condition of re-export on payment of redemption fine is not correct and that portion of laying the condition has to be struck down, I do so.‖ 30.1. Therefore, it shall be option of the Appellant to redeem the confiscated goods for home consumption on payment of duty, interest, fine and penalties, or to re-export the confiscated goods on payment of fine and penalties.
31. In the above peculiar facts, a case for reducing the penalties is made out. The redemption fine of Rs. 50 Lakhs is however maintained. A composite penalty of Rs. 50 Lakhs under Section 112(a) and 112(b) is reduced to Rs. 10 Lakhs. The penalty under Section 114AA is reduced from Rs. 2 Crores to Rs. 50 Lakhs. The Appellant would be entitled for set off of the amounts already deposited.48
32. The Appeal is accordingly allowed. The Department is directed to redeem the confiscated goods within two weeks, if option of redemption on payment of redemption fine and amounts as stated above is availed by the Appellant.
(Order pronounced in the open court on 15/05/2026) (ASHOK JINDAL) MEMBER (JUDICIAL) (K. ANPAZHAKAN) MEMBER (TECHNICAL) Archana