Shri Amar Chandra Roy vs Kolkata(port)
- Court
- Customs, Excise and Service Tax Appellate Tribunal
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO.1
Customs Appeal No.78682 of 2018
Customs Appeal No.78683 of 2018
(Arising out of Order-in-Original No.KOL/CUS/Copmmissioner/Port/54/2018 dated
29.06.2018 passed by Commissioner of Customs (Port), Kolkata)
(1) M/s Panel Pin Manufacturing Company Private Limited
(2) Shri Rakesh Doshi, Director of M M/s Panel Pin
Manufacturing Company Private Limited,
(6,Raghav Koley Lane, Salkia, Howrah-711106, West Bengal)
…Appellant
VERSUS
Commissioner of Customs(Port), Kolkata
(15/1, Strand Road, Kolkata-700001)
…..Respondent
APPEARANCE
Shri Abhijit Biswas, Advocate for the Appellant
Shri R.Chakraborty, Authorized Representative for the Respondent
WITH
Customs Appeal No.78715 of 2018
Customs Appeal No.78716 of 2018
(Arising out of Order-in-Original No.KOL/CUS/Copmmissioner/Port/54/2018 dated
29.06.2018 passed by Commissioner of Customs (Port), Kolkata)
(3) Shri Amar Chandra Roy
(80/5,Sastri Narendra Nath Ganguly Road, Howrah-711104
(4) Shri Pradip Deb
(4/196, S.B.Road, Kolkata-700030)
…Appellant
VERSUS
Commissioner of Customs(Port), Kolkata
(15/1, Strand Road, Kolkata-700001)
…..Respondent
APPEARANCE
Shri Arijit Chakraborty, Advocate for the Appellant
Shri R.Chakraborty, Authorized Representative for the Respondent
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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CORAM:
HON’BLE SHRI ASHOK JINDAL, MEMBER(JUDICIAL)
HON’BLE SHRI K.ANPAZHAKAN, MEMBER(TECHNICAL)
FINAL ORDER NO.76564-76567/2026
DATE OF HEARING :21.08.2026
DATE OF PRONOUNCEMENT : 30 OCTOBER 2026
Per Ashok Jindal :
All the appeals are arising out of a common impugned order,
accordingly, the same are taken up together for disposal.
2.1 In respect of Appeal Nos.C/78682,78683/2018, the facts of
these cases are that the Appellant No.(1) is engaged in manufacture
of steel wires drawn from steel rods, which the appellant procures
from Tata Steel Limited and Electrosteel Limited. For the said purpose,
the appellant has a factory at 6, Raghav Koley Lane, Salkia, Howrah,
West Bengal. The appellant is duly registered under the relevant
provisions of the Central Excise Act, 1944 and the Central Excise
Rules, 2002 for the purpose of carrying on manufacturing activity at
the said factory. The Appellant No.(2) is the Director of the said
Company.
2.2 The steel wires manufactured by the appellant are supplied by it
to, inter alia, Larsen & Toubro Ltd., Gammons India Ltd., Emami Ltd.,
Bajaj Electrical Ltd. and to Government Departments, like BSF, CPWD,
etc. The goods manufactured and cleared to all its customers by the
appellant are duly central excise duty paid, as applicable. The
appellant duly files its returns under the provisions of the Central
Excise Rules, 2002 in respect of manufacture and clearances of
excisable goods from the said factory.
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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2.3 Sometimes in the month of December 2016/January 2017 a man
representing himself as one Sri Bipul Saha of 123, Andul Road,
Sankrial, Howrah, visited the company’s city office at 147, N.S. Road,
rd
3 Floor, Room No. 66, Kolkata and introduced himself as a renowned
clearing and forwarding agent and an agent of import and export
business. He made an offer to the Appellant No.(2), the Director of the
Company to export wires manufactured by the appellant. Since the
offer made and explained by him was found to be profitable in nature,
the Company’s said Director agreed to accept his proposal to export
the company’s manufactured wires to the foreign company, as would
be advised by the said Bipul Saha. The commission payable by the
company to the said Bipul Saha for rendering the services was also
finalised.
2.4 Accordingly, the appellants, proceeded with the offer made by
the said Bipul Saha, agreed to export 16 MT of manufactured steel
wire to Chinalight Tri-Union International Co. Ltd., Beijing, China, in
terms of an order placed by the said Chinese company, received by
the Appellant company through an email sent by Bipul Saha. The said
consignment was thereafter manufactured and loaded in an empty
container, brought by a representative of Sri Bipul Saha to the said
factory, in the presence of the jurisdictional Central Excise Officers and
under their supervision whereupon, after full inspection, the concerned
Central Excise Officers sealed the container. Upon completion of
documentation thereafter, the said loaded container was permitted to
leave the said factory premises by the said jurisdictional Central Excise
Officer. The transporter, the driver and the truck in which the said
container was loaded, were removed from the factory and all
arrangements were made by the said Bipul Saha and freight thereof
was also to be paid by him.
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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2.5 The said loaded container containing the said goods left the said
factory premises on May 07, 2017 for Khidirpur port. Bipul Saha
assured the Company’s Director, Rakesh Doshi, the appellant no. 2
that the said goods would be shipped within 2 to 3 days and payment
from China would be realised within 30 days from the date of arrival of
the goods at the destination through bank.
2.6 The appellants were under the impression that the said goods
had been duly shipped and was awaiting confirmation of shipment
from the said Bipul Saha or the Customs House Agent (“CHA”)
engaged by him. However, on May 08, 2017, the Appellant No.(2)
received a telephone call from the office of the Directorate of Revenue
Intelligence whereby he was called upon to immediately meet the
named officer of DRI at his office at 8, Ho Chi-Minh Sarani, Kolkata.
The Appellant No.(2) duly visited the office of DRI at 2 pm on the
same day and met the said named officer, who informed him that the
container which had left the said factory under the seal of Central
Excise authority contained, along with a part of the said goods, red
sanders wood logs, a prohibited item which could not be exported. The
Appellant No.(2) was further informed that out of the total loaded
quantity of 16 MT of the said goods, only approximately 7 MT were
found in the said container and the rest of the materials were not
traceable and, in place thereof, 218 nos. of red sanders wood logs
were found. The Appellant No.(2), being extremely surprised, narrated
the entire facts of the case as above stated to the said DRI officer. He
also immediately tried to contact the said Bipul Saha over his mobile
phone but was unsuccessful.
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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2.7. The DRI officer thereafter informed the appellant no. 2 that the
said container containing, inter alia, part of the said goods and red
sanders wood contained therein were seized by the DRI authorities on
May 9, 2017 under Section 110 of the Act.
2.8. Thereafter, investigation was initiated by the DRI authorities and
summons were issued to, inter alia, the Appellant No.(2) and the
Manager of the Company, Santanu Sarkar and their respective
statements (4 and 1 respectively) were recorded under Section 108 of
the Act by DRI authorities.
2.9 Thereafter on November 2, 2017 a show cause notice was issued
by the Additional Director General, DRI, Kolkata Zonal Unit, under
Section 124 of the Act alleging smuggling of red sanders wood. In the
said show cause notice, along with the appellants, Bipul Saha alias
Sandip Ghosh, the CHA, (Mallick Clearing Agency, Howrah) and four
other persons were made Noticees. By the said show cause notice,
inter alia, the appellants were called upon to show cause to the
Commissioner as to why:
(i) the seized 8940 kgs. of red sanders wood should not be
confiscated under Section 113(d) and (h) of the Act;
(ii) 7260 kgs of H.C. wire rods valued at Rs. 3,15,000/- and 254
nos. of torn gunny bags having no commercial value allegedly used for
concealing the red sanders wood should not be confiscated under
Section 119 of the Act;
(iii) penalty under Section 114(i) of the Act should not be imposed
on the Company and the appellant no. 2 for their alleged role in the
attempted smuggling of the seized red sanders wood, a prohibited
item liable to confiscation under Section 113 of the Act;
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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(iv) penalty under Section 114AA of the Act should not be imposed
upon them for alleged use of false, fake and incorrect documents in
the attempting of smuggling of the seized red sanders woods, a
prohibited item.
2.10 Both the Appellants filed their respective replies by letters, both
dated June 25, 2018, denying the allegations contained against them
and drawing the attention of the Commissioner to the correct facts of
the case, which conclusively established the bona fide of the appellants
and the manner in which they were duped by the said Bipul Saha and
the other co-noticees. The attention of the Commissioner was also
drawn to the fact that, in the meanwhile, on June 3, 2017 the
company had filed an FIR against the said Bipul Saha, the transporter
and his driver before the West Port Police Station, Khidirpur, Kolkata
for investigation of the case against the said persons and their
associates in order to get back the 9 MT of missing wire rods stolen
from the container removed from the said factory.
2.11 In respect of Appeal No.C/78715/2018, Shri Amar Chandra Roy
was working as Manager of M/s. Mallick Clearing Agency, a Customs
Broker when he was introduced with one Shri Raj Kumar Mandal by
one of his acquaintance Shri Pradip Deb for the purpose of job of CB in
the export consignment of M/s. Panel Pin Manufacturing Company Ltd.
Appellant duly accepted such job and received the export documents
along with authorisation of the exporter through said Raj Kumar
Mondal. The Container No. YMLU3576647 sealed with Central Excise
Seal reached Kolkata Port from exporter when the appellant on the
basis of export documents filed Shipping Bill No. 5820910 dated
03.05.2017. Such consignment was intercepted by DRI, Kolkata on
06.05.2017 and on examination of container, after breaking the seal,
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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Red Sanders weighing 8940 kgs. along with declared H.C. Binding Wire
weighing 7260 kgs. were recovered and seized.
2.12 On completion of investigation, Show-cause notice dated
02.11.2017 was issued alleging that the appellant and others had
acted as "middlemen" in collusion with Shri Sandip Ghosh alias Bipul
Saha alias Bapan to facilitate the attempted smuggling of Red Sanders
and accordingly, penalty was proposed to be imposed upon the
appellant, amongst others, under Section 114(i) and 114AA both of
the Customs Act, 19622.
2.13 That appellant under letter dated 20.12.2017 submitted his
reply to the SCN and contended, inter alia, that his job was limited to
the job of CB when he filed Shipping Bill in accordance to the export
documents and received sealed container at Kolkata Port, which is
undisputed fact. Appellant also pointed out that there is no evidence to
suggest that he had any prior knowledge about the presence of Red
Sanders in the said sealed container meant for export. Accordingly,
appellant prayed for exoneration from penal consequence.
2.15 In Appeal No.C/78716/2018, the Appellant, Shri Pradip Deb, was
working as Business Developer at M/s Swastik Clearing & Forwarding
Agency when he was approached by one Raj Kumar Mondal for
clearance job of one export consignment of M/s. Panel Pin
Manufacturing Company Ltd. Initially, appellant, being partner in M/s.
P.S. Shipping & Logistic, wanted to do the clearing job through his firm
but later decided not to do the job through his said firm and
accordingly, introduced Shri Raj Kumar Mondal to Shri Amar Chandra
Roy, Manager of M/s Mallick Clearing Agency who ultimately acted as
Customs Broker in the said export consignment.
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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2.16 The consignment of H.C. Binding Wire loaded in container and
sealed with Central Excise Seal reached Kolkata Port from M/s. Panel
Pin Manufacturing Company Ltd. for export under Shipping Bill
No.5839010 dated 03.05.2017 when DRI, Kolkata intercepted the
same and on examination, after breaking the seal, found the container
to be stuffed with declared goods along with Red Sanders and
accordingly, the same were seized.
2.17 On completion of investigation, the Show-cause notice dated
02.11.2017 was issued alleging that the Appellant and others had
acted as "middlemen" in collusion with Shri Sandip Ghosh alias Bipul
Saha alias Bapan to facilitate the attempted smuggling of Red Sanders
and it was presumed that appellant had prior knowledge of presence of
Red Sanders in the container for which he shifted the clearing job to
M/s. Mallick Clearing Agency and accordingly, penalty was proposed to
be imposed upon the appellant, amongst others, under Section 114(i)
and 114AA both of the Customs Act, 1962.
2.18. The Appellant under letter dated 20.12.2017 submitted his reply
to the SCN and contended, inter alia, that there is no evidence on-
record to suggest that he had played any role with respect to seized
consignment apart from introducing Shri Raj Kumar Mondal to Shri
Amar Chandra Roy, which is admitted by both such noticees and
hence, he prayed exoneration from any penal consequence. Appellant
had duly pointed out that there is no allegation that the Central Excise
Seal on the container was fake or forge.
2.19 The matters were adjudicated vide Order-in-Original dated
29.06.2018 wherein the ld.Commissioner of Customs (Port) held that
the appellant and others had "acted as middlemen" and "were
knowingly assisted the smuggling of the Read Sanders and were part
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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of smuggling syndicate" and hence, he is liable for penal action u/s
114(i) of the Customs Act, 1962.
2.12 Against the said order, the appellants are before us.
3. The ld.Counsel, Shri Abhijit Biswas, for the Appellant Nos.(1) &
(2), submits that the penalty imposed on the appellant company is
patently erroneous, self contradictory, contrary to law and hence, the
same are untenable and unsustainable. From the findings of the
Commissioner in the said order itself, along with other materials on
record, it is conclusively established that the conditions precedent for
imposition of penalty upon the company under Section 114(i) of the
Act and under Section 114(i) and Section 114AA of the Act upon the
Appellant No.(2) has not been said to have been satisfied.
3.1 It is further submitted that in the said order there is no finding
against the Company by the Commissioner, except that the Company
was liable to penalty under Section 114(i) of the Act. All findings are
confined in respect of the Director of the Company, the Appellant No.
(2), and that too, in his individual capacity. Reference to the
“exporter” in the “Discussions and Findings” part of the said order is
also confined to Sri Rakesh Doshi, the Appellant No.(2) and not to the
Company. This would be ex-facie evident from the impugned order. In
the absence of any finding against the Company that it had done or
omitted to do any act in relation to the export goods involved, which
action or omission rendered the said goods liable to confiscation under
Section 113 of the Act or had abetted the doing or omission to do such
an act, no penalty can be imposed upon the Company under Section
114 of the Act, including clause (i) thereof. Thus, the condition
precedent for imposition of penalty upon the Company under Section
114(i) of the Act has not been or cannot be said to have been satisfied
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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in the instant case. The penalty of Rs.25 lakhs imposed upon the
Company under Section 114(i) of the Act is, therefore, contrary to law,
untenable and unsustainable.
3.2 Further, he submits that no basis has been disclosed in the said
order as to how and on what basis the Company has been held to be
liable to penalty under Section 114(i) of the Act. No material has also
been disclosed to justify holding the Company liable to penalty.
Significantly, it has been specifically stated in the show cause notice
and set out in the said order also that on search of the Company’s
premises by the DRI authorities, no incriminating goods or documents
were found or retrieved. The penalty imposed upon the Company by
the said order is, therefore, by a non-speaking and non-reasoned
order rendering the same illegal, invalid and bad in law.
3.3 He further submits that in such undisputed circumstances and
facts on record, no reasonable person can come to the conclusion that
the appellants had committed any act of commission or omission
rendering themselves liable to penal action under Section 114(i)
and/or Section 114AA of the Act. The Commissioner has thus erred in
holding that the Company was liable to penal action under Section
114(i) of the Act and that the Appellant No.(2) was liable to penalty
under Section 114(i) and 114AA of the Act.
3.4 Further, he submits that Section 114(i) of the Act makes a
person liable to penalty for attempting to export goods improperly, by
doing or omitting or omits to do any act in relation to the said goods,
which act or omission would render the said goods liable to
confiscation under section 113 of the Act or abets the doing or
omission of said Act(s). In the instant case on the finding of the
Commissioner in the said order itself and/or the allegations in the
show cause notice and from the materials on record also, there is no
evidence disclosed/available of any act of omission or commission on
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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the part of the Company or the Appellant No.(2) or of their abetting
the doing or omission to do such acts, which has rendered the said
goods, attempted to be exported by them, liable to confiscation under
Section 113 of the Act.
3.5 It is further submitted that there is no material evidence
available on record that the Appellant No.(2) was aware of the fact of
red sanders wood logs being loaded in the said container, upon
replacing a part of the export goods, i.e., the binding wires and
attempt was made to export the same illegally and that the Appellant
No.(2) came to know about it only on May 8, 2017 when he was so
informed about it by the concerned DRI officer. In such circumstances,
there cannot be any allegation of any act of omission or commission
on the part of the appellants in relation to the said red sanders wood
logs, which has rendered the said goods liable to confiscation under
Section 113 of the Act. In fact, it is not so alleged in the show cause
notice nor is there a finding to this effect in the said order. It also
cannot also be said or held that the appellant by its any act of
omission or commission had abetted in the act of omission or
commission by some other persons which has rendered the red
sanders logs liable to confiscation under Section 113 of the Act.
3.6 Further, he submits that in the said facts and circumstances of
the instant case on record, including as found by the Commissioner in
the said order, as per the settled principles of law as to what amounts
to abetment, there has not been and cannot be said to have been any
abetment on the part of the appellant as envisaged under Section 114
of the Act. “Irresponsible conduct and acts” as purportedly found by
the Commissioner, assuming though denying to be correct, on the part
of the appellant no. 2 does not satisfy the said settled principles of law
for being an act of abetment, for which a person is liable to penal
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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action, inter alia, under the Act. In support of his contention, he relies
on the following decisions:
(i) M/s. Katras Ceramics & Refractories Pvt. Ltd. & Ors. Vs.
Commissioner of Customs (Port), Kolkata, 2024 (7) TMI -323;
(ii) Commissioner of Customs (Port) Vs. M/s. Ashoke Enamel &
Glass Work Pvt. Ltd. 2021 (11) TMI – 963 (Calcutta High Court)
(iii) Sanyo Ceramics Vs. C.C. Mundra and C.C. Mundra Vs. Sanyo
Ceramics 2024 (2) TMI 515 (Cestat Ahmedabad)
(iv) Fast Cargo Movers Vs. Commissioner of Customs, 2018 (362)
ELT 184(T);
(v) Freightwings & Travels Ltd. Vs. Commissioner of Customs, 2017
(358) ELT 669(T);
(vi) Maheshwari Rocks (I) Pvt. Ltd. Vs. Commissioner of Customs,
2010 (262) ELT 574(T);
(vii) Md. Abdul Majed Sardar Vs. Commissioner of Customs (Prev.),
2017 (353) ELT 238(T-Kol);
(viii) Kiran S. Dixit Vs. Commissioner of Customs, 2014 (301) ELT
337(T);
3.7 He further submits that the purported reason/ground on which
the Commissioner has imposed penalties upon the Appellant No.(2) in
the instant case is that he allegedly “indirectly enabled” the
“smuggling cartel” to attempt smuggling of red sanders wood, a
restricted/prohibited item for export, obtained IEC in the name of the
company as per advice of Bipul Saha alias Sandip Ghosh and that he
was not fit to act as exporter/importer because of his callous and
irresponsible behaviour as exporter in as much as he allowed
fraudsters to take control over export consignment for, inter alia,
smuggling and that since he was not in control of the exports in the
company’s name “in any manner” of the subject consignment, it
enabled the smuggling syndicate to take over the company’s IEC and
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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the export goods for smuggling purposes. On the ground that such
alleged irresponsible conduct and acts of the appellant had rendered
the subject goods liable to confiscation, the Commissioner came to the
conclusion that the Appellant No.(2) was liable to penal action under
Section 114(i) of the Act. It is submitted that these purported findings
are patently erroneous and untenable, being based on assumptions
and presumptions unsupported by material on record and/or based on
incorrect fact, evident from record. For example, the finding that the
IEC of the company was obtained by the appellant as per advice of
Bipul Saha alias Sandip Ghosh is ex-facie incorrect. This would be
evident from the IEC itself. It would be seen that the IEC was issued
on September 29, 1999, which is 17½ years prior to the appellant
interacting with Bipul Saha, as above stated, for the first time.
3.8 It is further submitted that in imposing penalty upon the
Appellant No.(2) under Section 114AA of the Act, the Commissioner
has alleged that the appellant along with Sandip Ghosh alias Bipul
Saha made use of fake purchase order for attempting export of red
sanders, making them liable to penalty under the said provision. The
said purported finding of the Commissioner, in so far as the Appellant
No.(2) is concerned, is not only erroneous, unsupported by materials
on record, but also self contradictory. There is no material on record
disclosed that the appellant at any point of time of being made aware
of or being aware of the fact that the purchase order from the Chinese
company provided to the company by the said Sandip Ghosh alias
Bipul Saha was a fake purchase order. In fact, there is no such
allegation in the show cause notice also. The materials on record
evidences that there arose, at the time of receiving the purchase order
or thereafter, no cause or reason or basis for the Appellant No.(2) or
the company doubting the veracity of the purchase order or the
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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foreign party placing the purchase order. It is clearly recorded in the
said order by the Commissioner that the Appellant No.(2)’s role was
limited to arranging the declared export goods, i.e., binding wires and
that the appellants had not negotiated/entered into agreement with
the foreign buyer. In such circumstances the finding that the Appellant
No.(2) used fake purchase order for attempted export of red sanders
is patently erroneous and untenable. Consequently, he submits that
the imposition of penalty upon the Appellant No.(2) under Section
114AA of the Act is patently erroneous and untenable.
3.9. Further, he submits that Section 114AA of the act provides that
if a person “knowingly or intentionally” makes, signs or uses, or causes
to be made, signed or used, any declaration, statement or document
which is false or incorrect in any material particular, in the transaction
of any business for the purposes of the Act, shall be liable to a penalty
thereunder. Thus, the primary condition precedent under this provision
is that the acts of omission referred to therein has to be committed
“knowingly or intentionally” by the person concerned. In the light of
the facts recorded by the Commissioner in the said order itself it is
conclusively established that this primary condition precedent for
invocation of Section 114AA of the Act has not been and cannot be
said to have been satisfied in respect of the Appellant No.(2). The
imposition of penalty of Rs.25 lakhs upon the appellant by the said
order under Section 114AA of the Act is therefore without the condition
precedent therefor being satisfied and is illegal, invalid, untenable and
unsustainable.
3.10. He, further, submits that without prejudice to the aforesaid and
fully relying on the same, and in any event, the penalties imposed
upon the appellants under Section 114(i) and/or Section 114AA of the
Act, in the facts and circumstances of the instant case, are untenable
and unsustainable and the same are liable to be set aside.
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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3.11. It is further submitted that the ld.Commissioner has erred in
purporting to confiscate 7260 kgs of the said goods under Section 119
of the Act and/or imposing redemption for release of the said goods.
3.12. He further submits that in the facts and materials disclosed in
the show cause notice and the said order itself, the primary condition
precedent, i.e., user of the said goods for “concealing” the smuggled
goods, as required under Section 119 of the Act, has not been and
cannot be said to have been satisfied. There has been no concealment
of red sanders wood logs by or using the coils of wire. This would be
ex-facie evident from, inter alia, paragraphs 2 and 3 of the show cause
notice itself (set out in the said order). It would be seen therefrom
that the coils of wire, which were a part of the entire consignment of
the said goods to be exported and which were cleared from the
appellant’s factory under seal of the jurisdictional Central Excise
authority, were lying at the bottom of the container over which torn
gunny bags were placed and on the top of which read sanders wood
logs, which were attempted to be exported, were kept. Even,
according to the show cause notice and the said order, the said red
sanders wood logs replaced a substantial part of the said goods, which
were removed to make place in the container for the red sanders wood
logs. This is not and cannot be said to be “concealing” of smuggled
goods, i.e., red sanders wood logs with the said goods being coils of
wire, as per settled principles of law. In fact, from the show cause
notice it would be seen that it is acknowledged that there was in effect
no attempt to hide red sanders wood logs in the container. This is
apparent from the fact that according to the show cause notice
immediately upon opening of the container the red sanders wood logs
were first found, whereas only upon removal thereof and the torn
gunny bags from the container, the coils of wire rod were found lying
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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at the bottom therein, as removed from the said factory of the
appellant under central excise seals. Section 119 of the Act providing
for goods used for concealing smuggled goods being liable to
confiscation, therefore, cannot have any application whatsoever to the
instant case, the primary condition precedent laid down therein not
being satisfied. In the premises, confiscation of the said goods by the
said order is contrary to law, untenable and unsustainable. In support
of his contention, he relies on the following decisions:
(i) Mazda Chemicals Vs. Commissioner of Customs (Prev.), 1996
(88) ELT 767(T);
(ii) Hindustan Wires Limited Vs. Commissioner of Customs (Prev.),
1999 (113) ELT 529(T-Kol);
(iii) Dooars Roadway Corpn. Vs. Commissioner of Customs, 2007
(208) ELT 290(T);
3.13. Further, he submits that the said goods not being liable to
confiscation under Section 119 of the Act, the question of the same
being allowed to be released upon payment of redemption fine of
Rs.3,15,000/- under Section 125 of the Act, also cannot and does not
arise, the said provision being consequential to legal confiscation of
the said goods in terms of Section 119 of the Act. The redemption fine
of Rs.3,15,000/- imposed by the said order is, thus, also illegal, invalid
and bad.
3.14. Further, it is submitted that in any event and without prejudice
to the aforesaid, in terms of the Proviso to Section 125(1) of the Act,
except in the case of goods covered by the Proviso to Section 115(2)
of the Act, redemption fine under Section 125 of the Act, cannot
exceed the market price of the goods confiscated. Undisputedly the
Proviso to Section 115(2) of the Act is inapplicable to the instant case.
No basis or reason has been disclosed in the said order as to how the
Customs Appeal Nos.78682,78683,78715,78716 of 2018
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Commissioner has come therefore to the conclusion that the said
goods are liable to redemption on payment of fine equal to the value
of the said goods. It is settled law that the redemption fine of
Rs.3,15,000/- cannot be arbitrary imposed by the adjudicating
authority. He, therefore, prays that the Appeals
(C/78682,78683/2018) be allowed with consequential relief by setting
aside the impugned order.
4. In respect of the Appeal No.C/78715/2018, the appellant
submits that he was working as Manager of M/s Mallick Clearing
Agency. a Customs Broker when he was introduced with one Shri Raj
Kumar Mandal by one of his acquaintance Shri Pradip Deb for the
purpose of job of CB in the export consignment of M/s. Panel Pin
Manufacturing Company Ltd. Appellant duly accepted such job and
received the export documents along with authorisation of the
exporter through said Raj Kumar Mondal. The Container No.
YMLU3576647 sealed with Central Excise Seal reached Kolkata Port
from exporter when the appellant on the basis of export documents
filed Shipping Bill No. 5820910 dated 03.05.2017. Such consignment
was intercepted by DRI, Kolkata on 06.05.2017 and on examination of
container, after breaking the seal, Red Sanders weighing 8940 kgs.
along with declared H.C. Binding Wire weighing 7260 kgs. were
recovered and seized.
4.1. Shri Arijit Chakraborty, ld.Advocate for the said appellant,
submits that the finding against the said appellant in the impugned
Order-in-Original, is not independent in nature and it would be evident
that the appellant has been made liable for penalty with other persons
upon finding against some other noticee viz. Sushanta Pan, which is
absolutely erroneous in law.
Customs Appeal Nos.78682,78683,78715,78716 of 2018
18
4.2. Further, it is submitted that the role of the present appellant was
limited to the extent of CB since the appellant was working as an
employee of M/s. Mallick Clearing Agency. The CB was never made a
party in the proceeding and as such, it is admitted position that there
was no latch as CB in the present case. Adjudicating Authority has
presumed involvement of the appellant, amongst other, without any
evidence or independent finding, which is seriously bad in law. He
further submits that there is not a single evidence on-record to
suggest even that the appellant had any prior knowledge or
involvement with respect to seized Red Sanders in the present case
and as such, imposition of penalty upon the present appellant only for
acting as CB in the said export consignment is seriously bad in law.
Appellant relies upon the Judgement dated 21.07.2026 passed in
CUSTA 11 of 2017 [B.R.B Roy-Vs- CC (Prev.), Kolkata & Anr.) wherein
it has been held by the Hon'ble High Court, Calcutta that in absence of
any material suggesting involvement of the appellant, imposition of
penalty upon the appellant is bad in law.
4.3 Further, he submits that there is no evidence that the appellant
had any prior knowledge that the container for export was stuffed with
Red Sanders. Further, he submits that it is not the case of the
Department that the Central Excise Seal was forged or fake. He
submits that there is no investigation regarding delayed arrival of the
vehicle carrying container at Kolkata Port from the place of exporter,
as such, allegation of prior knowledge or involvement in any smuggling
activity against the appellant cannot stand in law.
Customs Appeal Nos.78682,78683,78715,78716 of 2018
19
4.4. Finally, he prays that the penalty imposed on the appellant be
set aside and the appeal be allowed with consequential relief to the
said appellant.
5. In respect of Appeal No.C/78716/2018, the ld.Counsel, Shri
Arijit Chakraborty submits that the finding against the appellant in the
impugned Order-in-Original is not independent in nature and it would
be evident that the appellant has been made liable for penalty with
other persons upon finding against some other noticee viz. Sushanta
Pan, which is absolutely erroneous in law. He further submits that from
the Show-cause notice as well as Order-in-Original, it would be evident
that both co-noticee/accused viz. Shri Raj Kumar Mondal and Shri
Amar Chandra Roy had respectively admitted during investigation that
the present appellant had only introduced them to each other for the
purpose of job of clearance of export consignment of M/s Panel Pin
Manufacturing Company Ltd. and apart from the same there is no
other role of the appellant in the present case.
5.1 Further, it is his submission that there is no evidence that the
appellant had any prior knowledge that the container for export was
stuffed with Red Sanders. Further, he submits that it is not the case of
the Department that the Central Excise Seal was forged or fake.
Further, it is further contented that there is no investigation regarding
delayed arrival of the vehicle carrying container to report at Kolkata
Port, as such, allegation of prior knowledge or involvement in any
smuggling activity cannot stand against the appellant. He further
submits that the appellant not being part of export consignment under
seizure in any manner whatsoever, cannot be saddled with any penal
consequence upon any presumption or suspicion Moreover, the
Customs Appeal Nos.78682,78683,78715,78716 of 2018
20
appellant has no antecedent to the alleged offence. He, therefore,
prays that the penalty imposed on him be set aside and the appeal be
allowed with consequential relief to the said appellant.
6. The ld. A.R. for the Revenue, reiterated the findings in the
impugned order. The ld. A.R. submits that the Red sanders, a
prohibited item has been seized from the container containing the
goods exported by the Appellant no.1. The other Appellants herein
have abetted the smuggling act. Accordingly, he justified the
confiscation and penalties imposed in the impugned order.
7. Heard both sides and considered the submissions.
8. From the facts on record, we find that the Appellant company
exported a consignment of 16 MT of steel wire manufactured by it to
Chinalight Tri-Union International Co. Ltd., Beijing, China, in terms of
an order placed by the said Chinese company. The said order was
received by the Appellant company through an email sent by Bipul
Saha. We find that the said consignment was loaded in an empty
container, brought by a representative of Sri Bipul Saha at the factory
premises, in the presence of the jurisdictional Central Excise Officers
and under their supervision. After full inspection and loading of the
goods in the presence of the officers, the concerned Central Excise
Officers sealed the container. Upon completion of documentation the
said loaded container was permitted to leave the said factory premises
by the said jurisdictional Central Excise Officer.
8.1 From the facts narrated above, we find that the goods
exported by the Appellant were loaded in the presence of the officers
and the container was also sealed in the presence of officers. The said
loaded container containing the said goods left the said factory
Customs Appeal Nos.78682,78683,78715,78716 of 2018
21
premises on May 07, 2017 for Khidirpur port. On 08.05.2017, the
officers of DRI intercepted the container and on examination it was
found to contain 218 nos. of red sanders wooden logs. Out of the
16MT of steel wire loaded in the container, only 7 MT of steel wire was
available in the vehicle and the remaining quantity of steel wire was
found missing. Thus, it is evident that the mischief of replacing the
steel wire by Red sanders wooden logs has happened during the
course of transport of the goods from the Appellant’s factory to the
port. The container sealed by the officers at the factory premises was
broke open in between with the connivance of the driver of the vehicle
and part of the quantity of steel wire available in the vehicle was
replaced by red sanders wooden logs. We find that there is no
evidence brought on record to show that the Appellant company or
Shri Rakesh Doshi, Director of the Appellant company was involved in
the alleged offence in any manner. The investigation has not
established the connivance of the Appellant company or it’s Director in
replacing the goods loaded in the factory while transporting the same
to port. Accordingly, we hold that the Appellant company or it’s
Director Shri Rakesh Doshi cannot be held responsible for the alleged
act of attempted export of red sanders in the container loaded with the
goods manufactured by the Appellant company.
8.2 In this regard, we have perused the findings of the Ld.
Adjudicating authority regarding the role of the Appellant company and
it’s Director in the alleged offence. For ready reference, the said para
56.2 in the impugned order is reproduced below:
“56.2 I find that Shri Rakesh Doshi, Director of M/s. Panel Pin
Manufacturing Company Pvt. Ltd. had negotiated with the said
Customs Appeal Nos.78682,78683,78715,78716 of 2018
22
Shri Sandip Ghosh for the export sales and delegated the
responsibilities to that person for logistics arrangements like
booking of containers, transporters, appointment of CB. freight
forwarder, etc. It is also evident that Shri Rakesh Doshi had
negotiated with Shri Sandip Ghosh, even without properly
knowing him and without verifying his credentials, identity and
antecedents. In fact he admittedly obtained IEC as per advice of
this Sandip Ghosh. He did not act as a bonafide exporter but
relied on this person named Shri Sandip Ghosh alias Bipul Saha
alias Baponfor procurement of export orders and other export
arrangements only for the sake of commission with his role
limited to arranging for the declared export goods i.e. binding
wires. International trade by exporters and importers is not
done in such a casual manner through dubious middlemen and
agents and without negotiation/agreement with foreign buyer.
International trade is serious activity with clear rules to be
followed by all concerned involved and with well-defined
responsibilities. The global supply chain of goods has to be
secure and reliable to prevent use of international trade
protocols by smugglers, criminals and terrorists. I find that the
exporter indirectly enabled the said smuggling cartel to attempt
the smuggling of Red Sanders, a restricted/prohibited item for
export. The exporter is responsible for the export of the
declared goods. He cannot claim later that the export was being
carried out in his name by others. Exporters like Shri Rakesh
Doshi allow fraudsters and even criminals/ terrorists to take
control over exports/imports for smuggling and other offences
which may compromise national security. He is clearly not fit to
act as exporter-importer because of his callous and irresponsible
behavior as exporter. He was not in control of the exports in his
company's name in any manner which enabled the smuggling
syndicate to take over his IEC and exports for smuggling
purposes. The exporter wrote a letter dated 3.6.2017 to the
Officer-in-Charge, West Port Police Station, Khidjrpur, Kolkata
requesting for FIR/complaint against Sri Bipul Saha and others
for committing fraud, cheating, misappropriation, breach of trust
and conspiracy. First Information Report (17313) is said to have
been recorded by Inspector of Police. However for his
irresponsible conduct and acts the subject goods seized are
Customs Appeal Nos.78682,78683,78715,78716 of 2018
23
liable for confiscation, and he himself is liable for penal action
under Section 114(i) of the Customs Act, 1962.”
8.3 From the findings reproduced above, we find that the bona fide
of both the Company and it’s Director has been established from the
findings contained in the order itself. We find that the
ld.Commissioner has himself recorded the fact that:
(i) The container was loaded with the export goods in front of
Central Excise officers at the said factory and duly sealed by them,
which seal were found intact with date at the dock, when the container
was intercepted
(ii) The “perpetrators at some point of time replaced” a part of the
said goods (the binding wires) with red sanders wood logs and
“brought the consignment to N.S. Dock, Kolkata port for export”.
(iii) Bipul Saha alias Sandip Ghosh and the other noticees had
engaged persons to take the declared export goods from the
manufacturer’s premises.
(iv) The said Bipul Saha had procured the export order by giving
false assurance of business to the willing exporter, the appellant
company.
(v) The container containing the genuine export goods of the said
IEC holder (the appellant company) was booked by the said Bipul Saha
alias Sandip Ghosh.
(vi) The Appellant No.(2) had obtained the IEC in favour of the
Company as per the advice of said Sandip Ghosh and had negotiated
with him without properly knowing him and without verifying his
credentials and further had relied on this person.
(vii) Because the said Appellant No.(2) was not in control of the
exports in the Company’s name, the “smuggling syndicate” took over
Customs Appeal Nos.78682,78683,78715,78716 of 2018
24
the company’s IEC and the export products and tried to use the same
for smuggling purposes.
(viii) The appellants had filed an FIR/complaint on June 3, 2017
before the Officer-in-Charge, West Port Police Station, Khidirpur,
Kolkata alleging fraud, cheating, misappropriation, breach of trust and
conspiracy against Bipul Saha alias Sandip Ghosh and his companions,
including the transporter and the driver of the vehicle.
8.4 From the facts and circumstances on record, we find that the ld.
Adjudicating authority has accepted the fact that the Director of the
Appellant company Shri Rakesh Doshi had dealt with Shri Sandip
Ghosh alias Bipul Saha alias Baponfor for procurement of export orders
and other export arrangements, without properly knowing him. We
find that the Appellant company, as a bonafide exporter believed the
person Shri Sandip Ghosh, who has cheated him. Since the connivance
or involvement of the Appellant company or it’s Director are not
established in the alleged offence, we hold that the penalty imposed
on the Appellant company or it’s Director Shri. Rajesh Doshi are legally
not sustainable and hence the same are set aside.
8.5 We also observe that the goods namely steel wire manufactured
by the Appellant company are exported under proper supervision in
the presence of the Central Excise Officer and hence we hold that the
goods are not liable for confiscation. Accordingly, we hold that the
redemption fine imposed in lieu of confiscation is not sustainable and
hence we set aside the same.
9. Regarding the penalties imposed on the other two Appellants
namely Shri Pradip Deb and Shri. Amar Chandra Roy, we find that they
acted as middlemen in the export of goods. The role played by them
Customs Appeal Nos.78682,78683,78715,78716 of 2018
25
as recorded in the impugned order is reproduced below for ready
reference:
“56.5 I find that Shri Susanta Pan, Shri Raj Kumar Mondal, Shri
Pradip Deb and Shri Amar Chandra Roy have acted as middlemen in
collusion with Shri Sandip Ghosh alias Bipul Saha alias Bapon, to
facilitate the attempted smuggling of Red Sanders. They were found to
be in regular contact with Shri Sandip Ghosh alias Bipul Sah Saha alias
Bapon but didn't revealhis whereabouts during the enquiry. Shri
Susanta Pan went to the house of Sandip Ghosh alias Bipul Saha alias
Bapon on various occasions and was known to him for the last few
years but did not reveal this during enquiry initially. Shri Susanta Pan
even did not disclose the actual name of Bipul Saha to DRI during
investigation. He disclosed the same only after arrest of Shri Sandip
Ghosh alias Bipul Saha alias Bapon. It is evident that all of them acted
in connivance with Shri Sandip Ghosh alias Bipul Saha alias Bapon for
attempted smuggling of Red Sanders, their delivery and other related
logistic supports. Shri Susanta Pan was also found to be actively
involved in another Red Sanders case earlier.”
10. From the role played by them reproduced above, it clearly
reveals that the Appellants were middlemen acted in connection with
the export of the goods steel wire. There is no evidence available on
record to show that they were knowingly involved in the attempted
smuggling the Red Sanders and were part of the smuggling syndicate.
There is no evidence on record to show that they were the part of the
smuggling syndicate and facilitated the attempted smuggling of red
sanders. Accordingly, we hold that the penalties imposed on them
under Section 114 (i) of the Customs Act, 1962 are not sustainable
and hence we set aside the same.
Customs Appeal Nos.78682,78683,78715,78716 of 2018
26
11. In view of the above findings, we pass the following order:
(i) The penalty imposed on the Appellant company and it’s
Director Shri. Rajesh Doshi are legally not sustainable and hence
the same are set aside.
(ii) The redemption fine imposed in lieu of confiscation is not
sustainable and hence the same is set aside.
(iii)The penalties imposed on the Appellants Shri Pradip Deb and
Shri.Amar Chandra Roy under Section 114 (i) of the Customs
Act, 1962 are not sustainable and hence the same are set aside.
12. In view of the above detailed observations, the appeals filed by
the Appellants are disposed of on the above terms.
(Pronounced in the open Court on 30.10.2026 )
(Ashok Jindal)
Member (Judicial)
(K.Anpazhakan)
mm Member (Technical)