Rajendra Jain vs COMMISSIONER OF CUSTOMS-ADJUDICATION - MUMBAI
- Court
- Customs, Excise and Service Tax Appellate Tribunal
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH: KOLKATA
REGIONAL BENCH – COURT NO. 1
Customs Appeal No. 75535 of 2026
(Arising out of Order-in-Original No. 57/DSR(57)CC(ADJN.)/Mumbai/2025-26 dated
nd
09.03.2026 passed by the Commissioner of Customs (Adjudication) Mumbai, 2
Floor, Old Building, New Custom House, Ballard Estate, Mumbai-400001)
Shri Rajendra Jain,
Flat No. 704, Mangalajoti, 227/2,
A J C Road, Kolkata-700020
: Appellant
VERSUS
Commissioner of Customs(Adjudication)
nd
Mumbai, 2 Floor, Old Building,
New Custom House, Ballard Estate, Mumbai-400001
: Respondent
APPEARANCE:
Shri Sudhir Mehta, Sr. Advocate
Shri Riya Debnath, Advocate
for the Appellant
Shri Mihir Ranjan, Special Counsel
for the Respondent
CORAM:
HON’BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON’BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NO.76568/ 2026
DATE OF HEARING: 28.10.2026
DATE OF PRONOUNCEMENT: 30.10.2026
ORDER: [PER SHRI K. ANPAZHAKAN]
The subject appeal relates to import of 13
consignments of import of silk yarn /polyester fabric
imported by an importer, namely M/s Kamla exports
under the Advanced Licenses, at Kolkata Port. The
advance licenses were issued in the year 2002 and
export obligations were discharged by the DGFT
Authorities by deemed export through a company
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Appeal No.: C/75535/2026-DB
M/s SAI International in the year 2005. One Mr.
Shammi Chanana was one of the partners of M/s Sai
International.
2. The facts of the case are that M/s Kamla
Exports are engaged in the business of import and
export, and it was a merchant exporter of silk fabric
and garments for a long time. An investigation was
initiated by officers of DRI against M/s Kamala
Exports on the allegation that they have got the
Export Obligation Discharge Certificate issued by
DGFT by filing bogus documents of deemed exports
to M/s. Sai International and that it has failed to
fulfill its export obligation and therefore Custom Duty
was evaded by it. DRI Mumbai investigated the
imports made by M/s Kamala Exports at Tuticorin
Port and Nhava Sheva Ports also.
2.1. During the course of investigation, it was
found that 13 consignments were imported by M/s
Kamala exports at Kolkata Port during the period
2004-2005 and out of 13 consignments, 9
consignments were procured by it from the foreign
supplier by itself and 4 consignments were imported
by it after purchasing the title documents on high
seas. Out of the 4 consignments which M/s Kamla
Exports imported at Kolkata Port on high seas, three
consignments were purchased by it from two
companies namely Topsia Estate Private Limited and
RK Impex Private Limited. Rajendra Jain (herein
after referred as the appellant) was a Director of
both the companies namely Topsia Estate Private
Limited and RK Impex Private Limited.
2.2. During the course of investigation, the
Appellant was summoned by DRI and he was asked
about his relationship with M/s Kamla Exports and
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Appeal No.: C/75535/2026-DB
the nature of the transaction with M/s Kamla
Exports. The appellant deposed on 15.02.2008 that
he did not enter into any transaction with M/s Kamla
Exports ever and the two companies namely RK
Impex Private Limited and Topsia Estate Private
Limited had sold on high seas three consignments of
polyester fabric on the basis of two high seas
contracts in course of the usual business and realised
their payment dues through banking channel. High
Sea sale were made by the companies not by the
appellant. In course of the interrogation, the
Appellant was confronted with a statement made by
one Mr Shammi Channa who allegedly stated that he
had sold a license of 50,000 sq. meter to one Raju
Bhai. The Appellant denied the statement made by
Mr. Shammi Channa and stated that he could not be
the one Raju Bhai which has been referred by Mr.
Shammi Chananan and that he had not purchased
any license since he had never imported any goods
and that both the company M/s Topsia Estate Private
Limited and R.K. Impex PVt. Ltd. never bought any
license, therefore, these charges are irrelevant and
hence liable to be rejected as untrue.
2.3. DRI also investigated the Customs Broker,
Mr. Bansi Badan Mandal and asked him about the
clearance of the goods and as to how he was paid
and how he got the documents and filed the Bills of
Entry. Mr. Bansi Bedan Mandal, the Customs Broker
deposed in his statement that he was introduced to
M/s Kamla Export through one common friend,
namely Raju Mohta, and thereafter he cleared the 13
consignment imported after obtaining documents
from proprietor of the company, namely Mr. Krishna
Khote who was owner of the company . He got the
payment from Mr. krishna Khot and thereafter
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Appeal No.: C/75535/2026-DB
despatched the goods to Mumbai and Delhi as per
direction given to him. In course of investigation, it
was found that the goods were transported by two
transporting companies, namely M/s Karni Transport
and M/s Inland Road Transport Corporation and it
was found that they dispatched the goods on the
instructions by Mr. Bansi Badan Mandal to M/s
Kamla exports and submitted transit documents for
movement of goods from Port to the place of
destination, which were duly issued by sales tax
authorities, both at the state as well as at the central
level.
2.4. On completion of the investigation, a show
th
cause notice dated 9 February 2009, was issued
wherein it was alleged that the imports made by M/s.
Kamla Exports at Kolkata Port were done by the
Appellant jointly and severally with others. The
Notice mainly relied on the retracted statement
made by one Mr. Shammi Chanana, wherein he
alleged that he has sold one advance license of
50,000 sq. meter to one Mr Rajubhai. The
investigaton officers presumed that Mr. Rajubhai
mentioned by Mr. Shammi Channa was infact
Rajendra Jain, the Appellant and interalia proposed
to demand of customs duty jointly and severally
from the Appellant and many others. The Notice also
proposed imposition of penalty on the Appellant
among many others.
2.5. On adjudication, the Ld. Commissioner has
adjudicated the Notice and confirmed the customs
duty of Rs.21760744.72 jointly and severally from
the Appellant as well as from many others. He also
imposed interalia a penalty of Rs.21760744 under
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Appeal No.: C/75535/2026-DB
section 112 (a) and Rs.2 Crore under section 114AA
of the Customs Act on the Appellant.
2.6. Aggrieved against the demand of customs
duty jointly and severally from him and against the
imposition of penalties on him, the Appellant has
filed this appeal.
3. The submissions made by the Appellant are
summarized as under:
(i) In the impugned order it has been alleged that
the imports made by M/s. Kamla Exports at Kolkata
Port were actually done by the Appellant jointly and
severally with others. To arrive at this conclusion,
the Ld. adjudicating authority has relied upon on the
retracted of statement made by one co accused Mr.
Shammi Chanana, wherein he alleged that he sold
one advance license of 50,000 sq. meter to one Mr
Rajubhai. The said license has been used by two
companies namely Topsia Estate Pvt. Ltd. or R.K.
Impex (P) Ltd. However, no charge has been made
in the Show Cause Notice on the two companies who
sold the documents. The Show Cause Notice was
issued to the appellant and the company was not
charged in the Show Cause Notice.
(ii) In any event, the sale of license has no bearing
with the import made at Kolkata Port unless it is
proved that goods were released on the basis of such
license. So much so, no license number alleged to
have been sold has been given in the show cause
notice. The appellant had denied and disputed the
statement of Mr. Shammi Chanana with material
evidence for which no exception was taken in course
of investigation which also amounted to admission
by the Department.
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Appeal No.: C/75535/2026-DB
(iii) The show cause notice was issued to the
appellant without there being any material that any
import is connected with the license and that the
appellant has participated in clearance of the goods
in any manner what so ever.
(iv) The appellant was not related in any manner
with filing of the Bill of Entry and the goods which
would render the goods imported liable for
confiscation. There was no mention of any license
number sold to the appellant in respect of which
import were made by M/s Kamla Exports. The
statement of Mr. Shammi Chanana was vague that it
had no probative value. The statement if read as a
whole it would appear that he stated that he did not
know about import of the goods.
(v) There is no evidence brought on record which
could the Appellant as importer of the goods. There
is no such charge or material either in the show
cause notice or in the impugned order which would
constitute any cause of action for treating the
appellant as importer of the goods or for penalty.
There is no material in the show cause notice or in
the impugned order that the appellant represented
as importer or owner of the goods at any point of
time. There is no link of the appellant with the
goods. Merely on the basis of a retracted statement
made of Mr. Chanana that he sold a license of
50,000 sq. meter to one Raju Bhai, no inference can
be drawn that the appellant imported the goods. It is
logically erroneous /fallacy.
(v) Mr. Bansi Badan Mandal, the Custom Broker who
filed the Bills of Entry has stated that he was
introduced with M/s Kamla Export through one Mr.
Rajubhai, who was identified to be one Mr. Raju
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Appeal No.: C/75535/2026-DB
Mohta and not the appellant. Mr. Bansi Badan
Mandal submitted statutory documents showing
receipt of the goods in the statutory portal of M/s
Kamla Exports which attracts statutory presumption
of existence of situation which has neither been
rebutted nor challenged in the show cause notice or
in the impugned order.
(vi) The Custom’s Broker Mr. Bansi Badan Mandal
made the statement that he dealt with the import in
respect of advance licenses given to him by M/s.
Kamala Export. He got the documents from M/s
Kamla Exports. He stated that he has delivered the
goods to M/s Kamla Exports. He obtained transit
permissions on the basis of statutory documents sent
by M/s Kamla Exports.
(vii) There is no material to ascertain advance
license allegedly sold and reciprocal imports using
the license. Suspension of license came after
clearance of the goods in the year 2005- 2006 after
the expiry of the license when export obligation was
discharged. Such suspension and cancellation of the
license in the year 2009 was futile after expiry of the
licence. At the time of import licenses were valid.
(viii) Transporters namely M/s Inland Transport
Company and M/s Karni Transport Company in
course of this respective statements stated that they
delivered the goods to M/s Kamla Exports after
taking necessary acknowledgment.
(ix) The adjudication order does not show any where
that the appellant could be treated as owner of the
goods or held as owner of the goods or as importer
within the meaning of Section 2(26) of the Custom
Act, 1962. The duties were paid by Kamla exports.
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Appeal No.: C/75535/2026-DB
In that case, any short levy could be demanded
from it only. The adjudicating authority without any
logical reasoning passed the order holding that
Appellant as joint and several importer of the goods
with M/s Kamla exports, C Mohammed Sajid Khan,
Mr. Sammi Channa , Mr. Satish Ganatra, Mr. krishna
Khot which is not permissible under the Act. Such
finding is not only perverse but not permissible in
law in as much as provisions of Custom Act does not
permit such deemed fiction of joint and several
importer and liability of penalty and duty.
(x) This Tribunal has held in case of Mohan Kumar
More versus Commissioner of Customs Kolkata
reported in 137 ELT 225 that if duty is paid by a
buyer or importer, short duty can be levied only from
the same importer not from the person who sold the
goods on high sea sales basis.
(xi) In the case of Baba Baidya Nath Trading
Company versus Commissioner of Customs reported
in 23 CENTEX 320 this Tribunal has held that there
is no provision under the Act for joint and several
demand of duty , imposition of penalty or fine under
the act,
(xii) In the case of Commissioner of Customs versus
Virendra Hans Raj Gandhi reported in 155 ELT128, it
has been held that only the person chargeable with
duty can be proceeded for realisation of demand of
duty not high sea seller and it cannot be treated as
importer of the goods.
(xiii) There is no material that the appellant dealt
with the goods or filed the bill of entry or made over
any document in relation to the bill of entry to the
Customs Broker, or he dealt with the goods in any
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Appeal No.: C/75535/2026-DB
manner whatsoever, and therefore, there could not
have been a charge of penalty under section 112 (a)
or (b) 114AA the Custom Act 1962. The show notice
did not disclose any cause of action against the
appellant on the basis of which demand of duty could
be made against the appellant or any penalty could
be imposed on the appellant.
(xiv) On the basis of the above submissions, the
Appellant prayed for setting aside the demands of
customs duty demanded jointly and severally from
him and set aside the penalties imposed on him.
4. The Ld. Special counsel made the following
submissions:
(i) Duty-free imports of polyester fabrics were
effected in the name of M/s. Kamla Exports at
Kolkata Port under 13 Bills of Entry. Verification
conducted by the officers of DRI revealed that the
declared premises of M/s. Kamla Exports at Arthur
Road Naka, Mumbai was a residential. Thus, the
importing firm M/s. Kamla Exports was found to be
fictitious.
(ii) Statement of Shri Shammi R. Chanana recorded,
disclosing sale of the Advance Licence to the
appellant (Shri Rajubhai @ Rajendra Jain) against
premium.
(iii) JD DGFT intimated that vide OIO all 20 Advance
licences including 3 advance licences pertaining to
Kolkata was cancelled void ab-initio and IEC no
0396025749 allotted to M/s Kamala Exports was
made inoperative. Further a fiscal penalty of
Rs1,00,00,000/- was imposed on M/s Kamla Exports
and its proprietor
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Appeal No.: C/75535/2026-DB
(iv) The three Advance Licences used for imports by
the Appellant were non-transferable, and the duty-
free benefit flowed from Notification No. 43/2002-
Cus dated 19.04.2002, under condition (iii), which
required fulfilment of the export obligation and
prohibited the transfer or sale of the licences and the
imported materials. In breach of this, the licences
were fraudulently obtained and subsequently sold in
the market, and duty-free goods were imported in
the name of M/s. Kamla Exports at Kolkata, Tuticorin
and Nhava Sheva Ports and diverted to the domestic
markets of Delhi, Bhiwandi and Mumbai.
(v) The statement of Shri Shammi R. Chanana dated
26.11.2008, states that in January 2004 he sold the
Advance Licence issued to M/s. Kamla Exports
(covering imports at Kolkata Port) to Shri Rajubhai
@ Rajendra Jain for a premium; that payments were
received from the appellant by courier/angadia for
the release of import documents from the bank and
for clearance charges. The documents were
forwarded to the appellant after they were retrieved
from the bank; and that, after clearance, the goods
were sent to Delhi at the appellant’s instance, with
freight arranged by him.
(vi) In the statement recorded under Section 108 on
15.12.2008, the Appellant himself admitted that he
is dealing in polyester fabrics, having known Shri
Shammi Chanana for over 20 years, and disclosed
high-sea-sale transactions in respect of three
consignments (two by M/s. R.K. Impex (P) Ltd. and
one by M/s. Topsia Estates (P) Ltd.)
(vii) The investigation found that the Appellant was
the actual person behind the imports of all the 13
consignments imported through Kolkata port. The
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Appeal No.: C/75535/2026-DB
Appellant used the IEC of the fictitious firm M/s.
Kamla Exports for importing the impugned goods
4.1. Regarding the demand made jointly and
severally from various persons, it is submitted that
the proposal to recover the duty pertains to the
imports made at Kolkata port jointly and severally
from six persons, including Shri Rajendra Jain
originated from the SCN. The notice must first be
examined as a whole to ascertain whether it already
pleads the facts necessary to make Shri Rajendra
Jain the statutory importer and duty debtor for the
identified consignments. He admitted that the
decisions cited by the Appellant disfavour recovery of
duty on a joint and several basis from persons not
shown to be importers. However, in the present case
the appellant is not such a stranger but the very
person who procured the imports. Where more than
one person answers the importer description in
respect of the same goods, recovery from such
persons has been upheld in the case of Sundaram
Finance Ltd. v. Commissioner of Customs, CESTAT,
order dated 02.03.2012).
4.2. In Danavarshini Exports (P) Ltd. v.
Commissioner of Customs, Chennai-VII, Final Order
Nos. 41502–41527/2025 dated 18.12.2025, the
show-cause notice proposed recovering duty jointly
and severally from the noticees, and the order-in-
original confirmed that demand. The Tribunal
considered the objection to a joint and several
demand and set aside the OIO, remanding the
matter to determine the actual person liable for the
duty. This indicates that each noticee’s proper duty
liability must be determined; the demand cannot be
upheld against all noticees solely on a joint and
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Appeal No.: C/75535/2026-DB
several basis. The Tribunal left all contentions open.
It did not hold that every such SCN is valid,
guarantee a remand in every case, or expressly
prohibit a fresh notice.
4.3. In the case of R. Dewakar v. Commissioner of
Customs (Seaport, Imports), Chennai, Final Order
No. 41067/2026 dated 06.10.2026, paragraphs 36–
41, sets aside a joint-and-several recovery direction
but fixes duty on the actual importer from the
existing record, without remand. This supports
modification where the pleaded case and evidence
permit identification of the chargeable person.
4.4. In view of the above submissions, the Ld.
Special Counsel prayed for rejecting the appeal filed
by the Appellant.
5. Heard both sides and perused the documents
placed before us.
6. Before going into the merits of the case, we
would first address the issue of sustainability of the
demand raised and confirmed in the impugned order
jointly and severally from the Appellant and six
others. We find that there is no provision available in
the Custom Act to demand duty jointly and severally
from many persons. It is a fact on record that the
Appellant Shri Rajendra Jain was not the statutory
importer. We observe that Section 28 of the Customs
Act, does not envisage recovery of customs duty on
a joint and several basis from persons who are not
the importers. Section 28 of the Customs Act does
not provide for collective recovery. We find that the
impugned order failed to specifically identify the
person who is liable to pay the customs duty and
demanded it from many persons which is not
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Appeal No.: C/75535/2026-DB
permissible under the Customs Act. In the case of
Baba Baidya Nath Trading Company versus
Commissioner of Customs reported in 23 CENTEX
320 this Tribunal has held that there is no provision
under the Customs Act for joint and several demand
of duty, imposition of penalty or fine. The relevant
part of the said order is reproduced below for ready
reference:
30. The Appellants states that the show cause
notice was not issued under Section 28 of the
Customs Act. Out of the 20 bills of entry 5
number of bill of entry imported by Appellant 1
and 3 bills of entry filed by Appellant 2 were
provisionally assessed and on provisionally
assessed bills of entry Section 28 was not
applicable. Accordingly, they contended that
the demand of duty under Section 28(4) of the
Customs Act is erroneous. The adjudicating
authority erred by holding that the declaration
given in the bill of entry wrong and the goods
could not held liable for confiscation under
Section 111 (m) of the Customs Act. Section
111(o) of the Customs Act was also not
applicable.The adjudicating authority
demanded duty from the Appellants jointly and
severally and imposed redemption fine and
penalty jointly and severally which is contrary
to law. We find merit in the arguments of the
Appellants. There is no provision of demanding
duty and imposing penalty jointly and severally
from the Appellants. Accordingly, we hold that
the demands are not sustainable on this count
also.
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Appeal No.: C/75535/2026-DB
6.1. In the case of Commissioner of Customs
versus Virendra Hans Raj Gandhi reported in 155 ELT
128, it has been held that only the person
chargeable with duty can be proceeded for
realisation of demand of duty not high sea seller. In
this case, we find that the bills of entry were filed by
M/s Kamala exports. Duty liability was discharged by
M/s. Kamla exports. Thus, short levy of customs
duty, if any, has to be demanded only from the
importer. The duty cannot be demanded from the
person who sold the goods on High Sea Sales basis.
This view has been held by the Tribunal in the case
of Mohan Kumar More versus Commissioner of
Customs Kolkata reported in 137 ELT 225, wherein it
has been held as under:
4. After considering the submissions made
from both the sides, we agree with the
submissions made by the ld. Advocate. The
appellant was only high-sea seller. It is
admitted on record that the duty leviable on
the goods was paid by M/s. A.N. Ash (P) Ltd.
when the Customs duty leviable on the goods
has been paid by the persons who have bought
the goods from the appellant, the differential
duty, if any, is also liable to be paid by him.
The appellant who has sold the goods to the
other importer cannot be held to be the
importers so as to pay the differential duty. We
also take note of the fact that the
Commissioner himself has come to a
conclusion that no deliberate offence under the
Customs Act, had been committed by the
appellant and consequently he has not
imposed any penalty on him. As such, in view
of our foregoing discussions, we set aside the
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Appeal No.: C/75535/2026-DB
impugned order in so for as the same relates
to the appellants and allow his appeal with
consquential relief, if any.
6.2. Thus, we find that there is no provision under
the Customs Act, to demand duty jointly and
severally. Also, the duty cannot be demanded from
the person who sold the goods on High Sea Sales
basis. In this regard we have perused the
submissions made by the Ld. Special Counsel. He
has cited the decision in the case of Sundaram
Finance Ltd. v. Commissioner of Customs, CESTAT,
order dated 02.03.2012 and contended that where
more than one person answers the importer
description in respect of the same goods, recovery
from such persons has been upheld. We find that the
facts in the case of Sundaram Finance Ltd are not
comparable with the present case. In that case, the
Bills of Entry were jointly filed and hence the
proposal of joint demand was considered, which is
not the case here.
6.3. The Ld. Special counsel also cited the decision
in the case of Danavarshini Exports (P) Ltd. v.
Commissioner of Customs, Chennai-VII*, Final Order
Nos. 41502–41527/2025 dated 18.12.2025, wherein
the Tribunal has set aside a joint and several
demand and remanded the matter to determine the
actual person liable for the duty. He also cited the
decision of R. Dewakar v. Commissioner of Customs
(Seaport, Imports), Chennai, Final Order No.
41067/2026 dated 06.10.2026, wherein the Tribunal
has set aside a joint-and-several recovery direction
but fixes duty on the actual importer from the
existing record, without remand. We find that the
decisions cited by the Ld. Special Counsel are not
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applicable to the facts and circumstances of this
case. In the present case, it is on record that the
Appellant has not filed the Bills of Entry and paid the
duty at the time of clearance. Hence, demand on
account of short levy, if any, can be made only from
the actual importer and not from the Appellant.
Thus, the decision cited supra is not applicable to the
facts and circumstances of this case.
6.4. Thus, we hold that the demand raised and
confirmed in the impugned order jointly and
severally from the Appellant is legally not
sustainable. Hence, we hold that the demands of
duty confirmed jointly and severally qua the
Appellant and the penalties imposed on him are
liable to be set aside on this ground itself.
7. Regarding the merits of the case, we find that
M/s Kamala exports have imported polyester fabrics
under 13 Bills of Entry through Kolkata port during
the period 2004-2005. Out of the 13 consignments,
9 consignments were procured by it from the foreign
supplier directly and 4 consignments were imported
by it after purchasing the title documents on high
sea sales basis. Out of the 4 consignments which
M/s Kamla Exports imported at Kolkata Port on high
seas, three consignments were purchased by it
from two companies namely Topsia Estate Private
Limited and RK Impex Private Limited. Rajendra Jain,
the appellant herein was a Director of both the above
companies. Thus, we find that M/s. Kamla Exports
were the actual importers in respect of the goods
covered under all the 13 Bills of Entry. The Appellant
was no way concerned with the imported goods
except that he was a Director in two of the
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companies which sold the goods on high sea sales
basis to the importer M/s. Kamla Exports.
7.1. The allegation of the department is that the
imports made by M/s. Kamla Exports at Kolkata Port
were actually done by the Appellant jointly and
severally with others. To arrive at this conclusion,
the Ld. adjudicating authority has relied upon on the
retracted statement made by one co accused Mr.
Shammi Chanana, wherein he has stated that he
sold one advance license of 50,000 sq. meter to one
Mr Rajubhai. The said license has been used by two
companies namely Topsia Estate Pvt. Ltd. or R.K.
Impex (P) Ltd. The Appellant contended that he was
not the person mentioned as Raju Bhai, in the
statement of Shammi Channa. The appellant was
never called Raju Bhai. There was one Mr. Raju
Mohta who was dealer of transferable advance
licences, who could be the person mentioned in the
statement of Mr. Shammi Chanana. We find merit in
the submission of the Appellant. In his statement
Shammi Chaanna mentions a person by name Raju
Bhai, which cannot be presumed by the Revenue as
Rajendra Jain, the Appellant herein. We find that
there is no evidence brought on record to establish
that Raju Bhai mentioned in the statement of
Shammi Channa and the Appellant Rajendra Jain are
one and the same.
7.2. We find that the Appellant was no way
concerned with the imported goods except that he
was a Director in two of the companies which sold
the goods on high sea sales basis to the importer
M/s. Kamla Exports. In this regard, we find that no
charge has been made in the Show Cause Notice on
the two companies who were said to have sold the
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goods on high sea sales basis to M/s. Kamla Exports.
The Show Cause Notice was issued to the appellant,
but the companies were not charged in the Show
Cause Notice. The use or misuse of the license, if
any, should have been done only by the Company
and not by the Appellant. Thus, we find that the
allegation of misuse of the License by the Appellant
is not sustainable without establishing any charge
against the companies. In any event, we find that
the sale of license has no bearing with the import
made at Kolkata Port unless it is proved that goods
were released on the basis of such license.
7.3. We find that there is no evidence brought on
record to establish that the Appellant was the actual
importer of the goods. For treating a person
“importer” of the goods it must be established that
the said person has filed bills of entry for clearing the
goods and he was the actual owner of the goods
after it’s clearance. In the present case, we find that
there is no such charge or material brought on
record either in the show cause notice or in the
impugned order, which would constitute any cause of
action for treating the appellant as importer of the
goods. There is no material in the show cause notice
or in the impugned order that the appellant
represented as importer or owner of the goods at
any point of time. We find that there is no link of the
appellant with the goods. Merely on the basis of a
retracted statement of Mr. Shammi Chanana that he
sold a license of 50,000 sq. meter to one Raju Bhai,
no inference can be drawn that the appellant
imported the goods. It is logically erroneous.
7.4. From the available records, we find that the
13 Bills of Entry were filed in Kolkata Port in the
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Appeal No.: C/75535/2026-DB
name of M/s. Kamla Exports. Mr. Bansi Badan
Mandal, the Customs Broker who filed the Bills of
Entry submitted that he has received the documents
from M/s Kamla Exports; he dealt with the import in
respect of advance licenses given to him by M/s.
Kamala Exports; he has delivered the goods to M/s
Kamla Exports; he obtained transit permissions on
the basis of statutory documents sent by M/s Kamla
Exports; Kamla Exports have obtained the Certificate
for fulfilment of the export obligations from DGFT.
Thus, we find that all the evidences available on
record indicates that the Appellant was not the
importer of the goods. Accordingly, we hold that the
Appellant was not the importer in this case and
hence customs duty cannot be demanded from him
directly or jointly and severally.
8. Regarding the penalties imposed on the
Appellant, we find that penalties have been imposed
on him under the Sections 112 (a) and 114AA of the
Customs Act, 1962. In the preceding paras, it has
been established that the Appellant was neither the
importer nor the owner of the goods. The only
allegation against him for imposing the penalties is
that he has purchased a License which was said to
have been used by M/s. Kamla Exports for clearance
of the impugned goods without payment of duty.
However, we find that there is no material evidence
available on record to ascertain that advance license
allegedly sold to the Appellant have been used for
clearance of imports. It is also a fact on record that
the suspension of license came after clearance of the
goods in the year 2005- 2006 after the expiry of the
license when export obligation was discharged. It is
an admitted fact that the licenses were valid at the
time of import. There is no material evidence
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Appeal No.: C/75535/2026-DB
available on record that the appellant dealt with the
goods or filed the bill of entry or dealt with any
document in relation to the bills of entry to the
Customs Broker, or he dealt with the goods in any
manner whatsoever. Thus, we hold that the
ingredients required for imposition of penalties under
the sections 112 (a) and 114AA of the Custom Act
1962 are not available in this case. Accordingly, we
hold that the penalties imposed under the sections
112 (a) and 114AA of the Custom Act 1962 are
sustainable and hence we set aside the same.
9. In view of the above findings, we pass the
following order:
(i) The Appellant was not the importer in respect of
the goods covered under all the 13 Bills of Entry in
question.
(ii) The demand of customs duty confirmed jointly
and severally qua the Appellant in the impugned
order is legally not sustainable and hence the same
are set aside.
(iii) The penalties imposed on the Appellant under
section 112 (a) and 114AA of the Custom Act 1962
are not sustainable and hence the same are set
aside.
(iv) The appeal filed by the Appellant is disposed of
on the above terms.
(Order Pronounced in Open court on 30.10.2026)
(ASHOK JINDAL)
MEMBER (JUDICIAL)
(K. ANPAZHAKAN)
MEMBER (TECHNICAL)
RKP