TaxTMI 
TaxTMI 
The Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench ('CESTAT') Ahmedabad in Shri Altaf Ahmed Versus Commissioner of Customs, Kandla - 2026 (7) TMI 668 - CESTAT AHMEDABAD held that as similar to the GST law, there is no provision of uploading the Show Cause Notice ('SCN') on the portal of the department. It was also held that the department must prove the active role of the Appellant to prove penalty under the Customs Act, 1962('the Act').
Facts:
Shri Altaf Ahmed ('the Appellant') was the active partner of Shri D Suresh, who played active role in importing Areca Nuts in Special Economic Zone('SEZ') without payment of duty, with the intention to divert the same into DTA, in the guise of SEZ to warehouse transfer. The Appellant was receiving a commission of Rs. 10 per Kg for the delivery of the subject consignment of Areca Nuts. Shri D Suresh made M/s. Global Enterprises to sign incorrect declarations and generate incorrect E-way bills for the movement of goods. An SCN was issued against Shri D Suresh, but the appellant was also made liable for penalty under Section 112(a) and Section 114AA of the Act.
The Appellant argued that no SCN was ever served upon the appellant nor even marked to him. Also, no goods were recovered from the possession of the Appellant, and no incriminating documents were seized. Also, there is an absence of any statement recorded under Section 108 of the Act, establishing his involvement has been relied upon. Whereas, the Commissioner of Customs vide Order-in-Original ('Impugned Order') dated April 15, 2025 imposed a penalty of Rs. 25 Lac under Section 112(a) and Rs. 50 Lac under Section 114AA on the Appellant. Feeling aggrieved, the present appeal has been filed.
Issues:
Whether the imposed penalty on the appellant is valid under the Customs Act?
Held:
The Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench ('CESTAT') Ahmedabad in [Shri Altaf Ahmed Versus Commissioner of Customs, Kandla - 2026 (7) TMI 668 - CESTAT AHMEDABAD] held as under:
- Observed that neither the copy of SCN was issued to the appellant not his name has been mentioned as a notice in the SCN.
- Noted that there is no provision of uploading the SCN on the portal of the department at the relevant time. Hence, the impugned order was passed without affording the proper opportunity of hearing and without issuing the SCN.
- Found that the department has failed to produce any credible documentary evidence linking the appellant with the alleged diversion of goods. Therefore, no penalty could have been imposed against the Appellant.
- In the impugned order, no specific act or omission has been assigned to the appellant to clarify how the appellant participated in the alleged diversion of goods. Hence, Section 112(a) cannot be imposed.
- Also, no goods were recovered from the appellant, nor any evidence has been placed on record that the appellant ever possessed, handled, or dealt with the subject goods. Hence, Section 112(b) cannot be imposed.
- Noted that to fulfil the ingredients of Section 114AA, the department must show the appellant's involvement in the preparation, signing of the false document or its use. The impugned order fails to provide any evidence fulfilling the essentials of Section 114AA of the Act.
Hence, the tribunal set aside the impugned order.
Our Comments:
112. Penalty for improper importation of goods, etc.-Any person,-
(a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, shall be liable....
(b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable,-
114AA. Penalty for use of false and incorrect material.-
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 this Act, shall be liable to a penalty not exceeding five times the value of goods.