Avtar Singh Bedi vs New Delhi(icd Tkd)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH, COURT NO. 4


Customs Appeal No. 52204 of 2015


(Arising out of Order-in-Original No. 09/2015/DM/Pr.Commr./IMP/ICD,TKD
dated 30.04.2015 passed by the Principal Commissioner of Customs (Import),
ICD Tughlakabad, Delhi)


Sh. Avtar Singh Bedi Appellant
R/o B-3/8, IIIrd Floor, Paschim Vihar,
New Delhi

Vs.

Commissioner of Customs (Airport)- Respondent
New Delhi (ICD TKD)


Appearance:

Present for the Appellant: Shri Deepak Gandhi, Ms. Ida Bhatnagar & Shri
Prateek Bhatnagar, Advocates

Present for the Respondent: Shri Anuj Kumar Neeraj, Authorized
Representative

CORAM :

HON'BLE DR. RACHNA GUPTA, MEMBER (JUDICIAL)

Date of Hearing: 08.05.2026
Date of Decision : 03.09.2026


Final Order No. 51424/2026

Dr. Rachna Gupta

The present appeal is filed against the order-in-original No.
09/2015 dated 30.04.2015 and is being heard pursuant to the
directions of hon‟ble High Court Delhi in CUSA A. No. 272 of 2018
and Civil Misc. Application No. 42126 of 2018 vide order dated
12.08.2025 wherein it has been ordered as follows:
th
“6. In this appeal, on 10 May 2022, both the ld.
Counsels for the parties had submitted that the matter

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ought to await the decision in Canon-II. Now that the
said decision has been pronounced by the Supreme
Court, the present appeal deserves to be remanded
back for fresh consideration by the CESTAT.
7. Accordingly, the present appeal is allowed.
The order of the CESTAT is set aside. The appeal of the
appellant being C/52204/2015 titled Shri Awtar
Singh Bedi Vs. Commissioner of Customs, Delhi-II
is restored to its original number before CESTAT.”

2. Pursuant thereto the appeal is again before this Tribunal for
decision on merits. The facts that culminated into the Order-in-
Original dated 30.04.2015 are as follows:
1
2.1 The Directorate of Revenue Intelligence investigated about
the goods imported in two containers at „ICD Tuklakabad‟ New
Delhi. Bill of Entry No. 7140848 dated 18.6.2012 was filed by M/s.
Mahadev Trading House. (proprietor Shri Vijay Sharma) and Bill of
Entry No. 7140855 dated 18.6.2012 was filed by M/s. Avtar
International. (proprietor Shri Sunil Kumar). Both Bills of Entry
were filed by the common CHA M/s. Abhinav Cargo Movers
(Proprietor Shri Tapasvi Singh). When both the containers were
opened and examined by DRI officers, it was found that in addition
to the declared goods, contraband in the form of „Refrigerant R-22
gas‟, have also been imported. The import of R-22 gas was
prohibited, it being an ozone depleting substance. Samples of R-22
gas cylinders were drawn from both the containers and were sent
2
for testing to the Defence Research & Development Organization ,
3
Centre for Fire Explosives & Environment Safety, Delhi for
chemical analysis thereof. The CEFEES vide their analysis report
dated 10.12.2012 confirmed that the cylinders contained R-22 gas

1 DRI
2 DRDO
3 CEFEES

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C/52204/2015
which is an Ozone Depleting Substance (in short ODS). The
detailed examination of the cargo in both the containers revealed
that the containers contained other consumer goods viz, table
napkin papers, decorative items, AA cells etc. The goods in both
the containers were seized by DRI and detailed investigations were
taken up.
2.2 The salient points of the modus operandi unearthed by the
DRI are summarised below:
(i) The Bills of Entry were filed by Shri Tapasvi Singh
(CHA) as per the discussions he had with Shri Avtar Singh
Bedi who approached him and handed over import related
documents. Without verification of genuineness of the
importer, the Bills of Entry were filed on the basis of
understanding that CHA will be paid double the amount
normally charged from clients for facilitating mis-declaration
qua both the containers.
(ii) Shri Ajay Sharma, Abhishek Dua as well as Shamit
Bhasin joined together and schemed to import prohibited/
restricted goods through dubious means by enticing certain
persons through monetary consideration to open proprietary
firms which were subsequently used for import of contraband.
These three individuals advanced the money for such
imports, travelled to China to purchase such contraband by
paying cash and got them loaded in containers in such a way
that the contraband is stuffed deep inside the container and
other goods were used to conceal the same. Even the Bank

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C/52204/2015
accounts opened in the name of such firms were also
operated by these three individuals.
(iii) The investigation revealed that the following four firms
have been opened by the three individuals above. (1) Action
Trading, Prop. Shri Rajesh Suri (2) Tirumalai Trading Prop
Shri C P Sharma (3) Mahadev Trading House, Prop. Shri Vijay
Sharma and (4) M/s. Avtar International Prop Shri Sunil
Kumar.
The firms at S No. 3 and 4 were used for the impugned
imports under investigation.
(iv) Shri Anil Mittal, associated with M/s. Steel Birds
Impacts travelled to China and arranged for procurement of
gas stroves which were used the containers for concealing
the R 22 contraband.
(v) Shri Tapasvi Singh, CHA in his statements admitted
that he had cleared the imports earlier made in the name of
M/s Action Trading and Tirumala International. He and Avtaar
Singh Bedi had hatched a plan to clear the R-22 cylinders
concealing those in the two containers as per the instruction
from Ajay Sharma, Abhishek Dua and Shamit Bhasin in return
for receiving Rs.10 lakh.
2.3 During the course of investigation (which comprised of
declared as well as undeclared goods) which were used to conceal
R-22 were valued on the basis of market inquiry. The assessable
value was arrived after permitting allowable deductions from the

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C/52204/2015
4
market price. Accordingly, the Show Cause Notice bearing No.
46/2012 dated 19.12.2012 was served upon the appellant.
2.4 The adjudicating authority vide the impugned order has
ordered as follows:
(1) R-22 gas cylinders were ordered for absolute confiscation,
(2) The assessable value of goods (other than R-22 cylinders) -
both declared and undeclared - were redetermined and such goods
were ordered for confiscation but allowed for redemption on
payment of fine,
(3) Penalties were imposed on both the importers.
(4) Personal penalties were also imposed on various persons
who were found involved in the act of smuggling.
3. I have heard learned counsels for the appellant and Shri Anuj
Kumar Neeraj, learned Authorized Representative for Revenue.
4. Learned counsel for the appellant submitted that the penalty
imposed on the appellant under Section 114AA is not warranted in
the facts of present matter, more so when a penalty under Section
112A has also been imposed separately. The appellant did not
make nor signed nor used any wrong declaration or document. The
appellant Shri Avtar Singh Bedi merely collected the documents
from Shri Ajay Sharma and handed them over to Shri Tapasvi
Singh, CHA. Shri Tapasvi Singh in turn filed these papers before
the Customs and got the goods cleared from Customs. He has
admitted in his statement that he knew Shri Ajay Sharma from
before as he had got his (Ajay‟s) goods cleared from the customs

4 SCN

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C/52204/2015
on earlier occasions also and that he was aware of the alleged mis-
declaration at the time of filing the papers before the customs
authorities. The provisions of this section can only apply to the
importers and the CHA who filed the papers and got the goods
cleared from the Customs because only their Acts/omission can be
termed as “business under the Act.”
4.1 Therefore, considering the provisions of Section14AA, it can
be very safely said that Shri Avtar Singh Bedi neither made, nor
signed, used or caused to be made any declaration, document
during the course of „business under the Act‟ and, therefore, the
provisions of the Section 114AA cannot be invoked against him.
The alleged participation of the appellant was not “in the course of
business under the Act.”
4.2 The appellant relied upon the decision in the case of M/s
5
Achiever International Vs. CCE wherein para 4.5 of the
judgment, the Tribunal held that :
“At any rate there is no justification for separate penalties

under Sections 112A and 114AA.”

4.3 The adjudicating authority has gone beyond the scope of the
Show Cause Notice by imposing separate penalties under Sections
112A and 114AA and has thus violated the cardinal principals of
natural justice.
5. Learned Departmental Representative, on the other hand,
has reiterated the findings in the impugned order.

5 2011 (268) ELT 94 (Tri.-Del.)

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C/52204/2015
6. Having heard the parties and perusing the record of the
appeal memo, I have observed that the present appeal has already
been decided along with 5 other appeals of the co-noticees by this
Tribunal vide its Final Order No. 57542-57547/2017 dated
02.11.2017. It has been held that Shri Avtar Bedi as well as Shri
Tapsavi have conspired with the defacto importers i.e. Shri
Abhishek Dua, Shri Ajay Sharma and Shri Shamit Bhasin for
clearance of contraband in the containers. It has been admitted in
the statements by both the persons that they had agreed to do the
same in return for payment of cash of Rs. 10 lakhs. These as well
as other facts of the case bring out the fact that these persons had
played a serious role in the smuggling of prohibited R-22 gases.
Consequently, penalties imposed on these persons are fully
justified and are upheld.
6.1 Now coming to the plea of jurisdiction as was prayed to be
the additional ground it is that Hon'ble Supreme Court, in Civil
Appeal No. 1827 of 2018 had dealt with the issue as to whether,
after clearance of the goods by the Customs, the proceedings could
be initiated by the Directorate of Revenue Intelligence for recovery
of duty not paid under Section 28(4) of „the Customs Act 1962. It
was held vide order dated 09.03.2021 that the proceedings
initiated by Additional Director General of DRI by issuing demands
are thus liable to be set aside. However, while reviewing the said
decision in review petition no. 400 of 2021 in the aforesaid Civil
Appeal vide judgment dated 07.11.2024 Hon‟ble court held that
offices of Directorate of Revenue Intelligence when appointed as
offices of customs and assigned the relevant functions of a “proper

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officer” are competent to issue Show Cause Notices for recovery of
custom duty under section 28 of the Customs Act, 1962. The
judgment dated 09.03.2025 was reversed holding that said
judgment overlooked relevant notification/circulars particularly
Notification no. 44/2011 which assigned functions under Section 17
and 28 of the Customs Act to DRI offices. It also held that the
earlier judgment incorrectly linked assessment under Section 17 of
the Customs Act with recovery of short-period duty under section
28 thereof which are distinct statutory functions. In the light of this
discussion the plea of jurisdiction of DRI officers to issue sent to the
appellant is rejected. Hence, SCN is denied to be set aside for want
of jurisdiction.
7. In totality of above discussion, the issue of jurisdiction stands
decided against the appellant. On merits also the order under
challenge is upheld, as discussed above. Consequent thereto, the
appeal is dismissed.
(Pronounced in open Court on 03.09.2026)


(Dr. Rachna Gupta)
Member (Judicial)


RM