TaxTMI 
TaxTMI 
2025 (3) TMI 1258
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....out of a common issue, they are disposed of by a common order. 2. The appellants/exporters/noticees, namely, Shri Avinash Soni, Shri Sanjay Agarwal and Shri Preet Kumar Agarwal are in appeal against the confiscation of the impugned goods under Section 113(k) of the Customs Act, 1962 and imposition of penalties on them under Sections 114(iii) and 114AA of the said Act. They have also challenged the quantum of redemption fine imposed under Section 125 of the Act inter alia contending that the same is not commensurate with the margin of profit. The appellants-exporters have also prayed for allowing export/re-export of the impugned goods under Section 110 of the Act. 2.1. Whereas, the Revenue has filed the appeal against the respondents viz. Shri Sanjay Agarwal, Shri Preet Kumar Agarwal, Shri Avinash Soni contending that paltry amounts of penalty under Sections 114(iii) and 114AA of the Customs Act, 1962 have been imposed on them which is not commensurate to the gravity of the offence committed and also against other respondents/co-noticees viz. Shri Dhruvajyoti Roy, Shri Pallav Roy Chowdhury, Smt. Champa Mukherjee, Shri Satya Gopal Mallick, State Trading Corporation of Ind....
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....dings. At the AIU office, the person and the luggage of Shri Preet Kumar Agarwal were thoroughly searched after observing due legal formalities. As already admitted by him, the boxes containing gold bangles meant for export were not found in his possession. 3.2. Another team of DRI officers intercepted Shri Sanjay Agarwal while he had already boarded Indigo flight No. 6E 373 to Hyderabad. The officers had to de-board Shri Sanjay Agarwal from the aircraft with the help of Airlines staff, as the aircraft had already left the terminal for takeoff. From the boarding pass recovered from Shri Sanjay Agarwal, it was found that he was travelling on a ticket bought in the name of his son Shri Preet Kumar Agarwal. On being questioned, Shri Sanjay Agarwal admitted to having received the boxes containing gold bangles from his son Shri Preet Kumar Agarwal at the gate of departure terminal of the NSCBI airport, after all formalities for export of the impugned gold bangles had been completed through Shri Preet Kumar Agarwal. He also informed that he had already booked the two boxes containing gold bangles meant for export with Indigo Airlines domestic cargo for sending to Hyderabad instead. Sh....
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.... declaration form No. G18000047552 dt. 04.04.2018 submitted by the exporter M/s Shree Ganesh Jewels, Hyderabad in respect of Invoice No. SalesExports/18-19/UAE/01 dt. 02.04.2018, currency USD-2213425 equivalent to INR 14,19,91,214/-. 3.3. From personal search of Shri Sanjay Agarwal, two bunches of keys were recovered, which Shri Sanjay Agarwal stated to be the keys of the boxes containing gold bangles, which he had booked with Indigo Airlines domestic cargo for taking to Hyderabad. From his wallet, two Debit cards bearing Nos. 4280-9630-0012-1527 (Kotak Mahindra Bank) and 4363-9521-0024-3638 (Indusind Bank), in the name of Avinash Soni were recovered and three Debit cards bearing Nos. 4280-9630-0021-0569 (Kotak Mahindra Bank), 4373-7820-0074-3017 (Andhra Bank) and 5129-3201-0067-7910 (Axis Bank), in the name of Radhika Agarwal were recovered. However, those debit cards were not seized by DRI. 4. Yet another team of DRI officers intercepted the two boxes containing gold bangles at the office of Indigo Airlines domestic cargo, Kolkata, booked by Shri Sanjay Agarwal in his own name for delivery at Hyderabad. As per documents, the consignment was booked by one Pawan Cargo. The tw....
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....mples drawn from them were covered under separate Panchnama proceedings. 7. The said Shipping Bill No. 6530662 dt. 03.04.2018 was found to have been filed manually and not through EDI system of Customs. To ascertain the total number of consignments shown to have been exported by the firms controlled by Shri Sanjay Agarwal through Kolkata Airport, the Manual Shipping Bill Filing Registers maintained at Air Cargo Complex (here in after referred to as "ACC"), Kolkata for the last three years i.e. from 2015 to 2018 were collected. 8. Thereafter, summons were issued and statements were recorded from various persons in connection with the case. 8.1. Voluntary statement of Shri Sanjay Agarwal was recorded under Section 108 of the Customs Act, 1962 on 05.04.2018, wherein he inter alia submitted as under: - i. In response to a query raised, he had inter alia stated that in relation to export of gold bangles in the name of Shree Ganesh Jewels, he and his son Preet Kumar Agarwal reached Kolkata on 03.04.2018 at about 11.00 hrs by Indigo flight from Hyderabad; that the gold bangles were sent to Kolkata by parcel through Indigo on 03.04.2018; that after reaching Kolkata ....
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....s mobile No. 9000199497 to know about the happenings there; that Preet informed him that the SDO has given him back two boxes containing bangles outside the Security Hold Area; that then he instructed Preet to come to the first gate (probably gate 1A/1B) to give him the two boxes containing gold bangles; that he submitted that those two boxes were being carried in the two black coloured trolley bags of brand "Delsey'; that accordingly, Preet came to the gate and handed over to him the said two trolley bags containing the two metal boxes and he took them; that Preet went inside and Shri Sanjay went to the Indigo Domestic Cargo at NSCBI Airport, Kolkata by taxi with the said two metal boxes containing the gold bangles meant for export; then on the way to Indigo Domestic Cargo, he broke the seal of the two boxes to avoid getting noticed by the Indigo people; that there he met one agent of Indigo and booked the said two boxes containing gold bangles for delivery to himself (Sanjay Agarwal) in Hyderabad; that he requested to send the goods by the first available flight of Indigo to Hyderabad; that after x-ray of the goods, he went to the domestic departure to board flight to Hyderab....
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....2018; that after taking meal at Haldiram, he and his father went to the cargo section of Kolkata Airport, where his father met Customs Staff for formalities related to hand carriage of the two boxes gold jewellery to him; that from Air Cargo Customs accompanied them in a car rented by them to the International Departure of Kolkata Airport; that before taking boarding pass, he along with the Preventive Officer entered into the Airport Departure hall and went to SDO room of Customs situated between the Immigration area and Security area through the staff lane at the extreme left side; that the Preventive Officer handed over the two boxes of gold jewellery to SDO of Customs posted at Departure Hall, NSCBI Airport who in turn handed over the boxes of gold jewellery to him in the chamber after taking the acknowledgment of receipt in SDO register; that as per his father's instructions, he then went to gate No. 1A/1B (Departure) to hand over two boxes of gold jewellery kept in two trolley bags to his father there; that he kept the two boxes in two trolley bags and handed it over to his father who was standing outside gate No. 1A/1B (Departure); that after taking the two trolley bags l....
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.... handing over to Jumeriates Gold Jewellery LLC, Dubai. 8.2.1. In the further statement recorded from Shri Preet Kumar Agarwal on 06.04.2018, he inter alia reiterated his earlier statement dated 05.04.2018. 8.3. Shri Ajay Kumar Agarwal, brother of Shri Sanjay Agarwal, came to the DRI office, Kolkata on 05.04.2018 and his voluntary statement was recorded under Section 108 of the Customs Act, 1962 on 05.04.2018. In his voluntary statement, Shri Ajay Kumar Agarwal inter alia stated that: - i. In response to a specific question, it was submitted that the money for payments for gold jewellery were actually transferred by him through hawala channels to get the remittances for the so-called export consignments through legal channels i.e. through banks; that he used to contact one Mr Rahul in Hyderabad for transfer of the money to the consignee in Dubai in advance so that they could made the advance payments for the exports; that some person of Rahul used to come to his office to collect the money in cash; that he did not have the mobile number of Rahul or his address details; that after completion of diversion of the export goods, they subm....
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....te. However, only photo copies of Shipping were retrieved but no copies of Shipping Bills/Note Sheet showing receipt by SDO (Departure) were retrieved. 10.1. From the file No. S41(Misc.)-22/17CCX of Shree Ganesh Jewels, forwarded by Deputy Commissioner, ACC, it is found that no permission of Commissioner of Customs (Airport) was taken for filing manual Shipping Bill No. 6530662 dt. 03.04.2018. In the note sheet, there is mention of a letter dated 29.03.2018, which appears to have been received at ACC on 02.04.2018 In the said letter, it was mentioned that Commissioner had granted them the required permission for filing Shipping Bill for export of gold jewellery by personal hand carriage. Another letter dated 03.04.2018 of Shree Ganesh Jewels addressed to Asst. Commissioner of Customs, ACC, NSCBI Airport, Kolkata was also found in that file, through which Shri Avinash Soni, proprietor of Shree Ganesh Jewels had authorized Shri Sanjay Agarwal to process documents at ACC office for the consignment being exported under invoice No. SALES-EXPORTS/1819/UAE/01 dated 02.04.2018 and also authorizing Shri Agarwal to sign necessary documents for clearing of the export consignment. 10.2. ....
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....es; that on 04.04.2018, Shri SG Mallick, Preventive Officer escorted one passenger from Air Cargo Complex to his chamber with two metal boxes in scaled condition; that the particulars of the boxes were entered into the register by Shri Preet Kumar; that he had checked the seal of the metal boxes and handed over to Shri Preet Kumar, but he did not escort Mr Preet Kumar with metal boxes to the flight iii. In response to a specific query, Shri Roychowdhury further clarified that he was to escort Shri Preet Kumar, holder of passport No. 24198550 to flight No. EK 573, who had with him two boxes containing 54 kg gold covered under Shipping Bill No. 6530662 dated 03.04.2018 as hand baggage, but he did not; that it was a mistake on his part not to escort Shri Preet Kumar to the flight; that he was not aware whether Shri Preet Kumar had boarded flight No. EK 573 with the metal boxes containing approximately 54 kg gold bangles or not. 11.1. In the further voluntary statement of Shri Pallab Roychowdhury was recorded on 18.04.2018 under Section 108 of the Customs Act, 1962 it has been inter alia deposed as under: - i. As SDO (Departure) at Kolkata Airport, he had handled t....
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....led by Appraiser and EO of Export Shed, he went to their room on 04.04.2018; that they gave him the sealed boxes which were kept in a black colour bag fitted with trolley; that they also handed over to him one sheet of paper and one Shipping Bill page and instructed him (Shri Mallick) to take the sealed boxes to SDO (Departure) and hand over for export by a passenger named Shri Preet Kumar Agarwal; that they also introduced him to Shri Agarwal as the passenger mentioned in the Shipping Bill to carry the sealed boxes for export; that he then checked the seal on the boxes and accompanied Shri Agarwal to his car waiting outside the Shed; that by car they went to Integrated Terminal, Departure Gate No. 4 and Shri Preet Kumar Agarwal showed his ticket and ID card to the CISF and Shri Mallick showed his PIC; that the bag containing the sealed boxes were put in a trolley by Shri Agarwal and they went straight to SDO (Departure) room at Departure Lounge between Immigration counter and Security area; that he handed over the two sealed boxes and papers to Shri Pallab Roychowdhury, SDO (Departure); that after checking the seal on the boxes, SDO (Departure) endorsed the papers and kept on the ....
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....rwal was seen taking a boarding pass for Hyderabad from Indigo counter at Portal C, which was later handed over to Shri Sanjay Agarwal • Shri Sanjay Agarwal travelled on that boarding pass as a fake passenger (in the name of Shri Preet Kumar Agarwal). • After entering international terminal Shri Preet went straight away to Customs office and then came out from the Customs office at departure level after few minutes. • Mr Preet Agarwal met near the departure gate of NSCBI Airport, Kolkata and handed over a bag to Shri Sanjay Agarwal, who was waiting outside the terminal near gate No. 1A of the said airport. That was a regular practice, as many passengers hand over the excess luggage to their friend / relative who came to see them off while waiting outside. • Due to combined Check-in area for domestic and international passengers at Kolkata airport, Shri Preet Agarwal was able to proceed up to domestic entrance gate/Check in area from Custom station Duty Officer area & International check in area. 14. After issuance of several summonses, Shri Avinash Soni, the proprietor of Shree Ganesh Jewels as per IEC, appeared at DRI office, ....
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....Act, 1962. 15.1. In her voluntary statement, Smt. Champa Mukherjee, Appraiser of Customs, inter alia submitted that: i. She was posted at ACC, NSCBI Airport, Kolkata between the period from 13.09.2017 to 11.04.2018; that the following was the procedure for clearance of export consignment of gold jewellery on hand carry basis- a. Exporter / CHA submits letter addressed to the Assistant Commissioner (Export) giving details of export consignment such as quantity, destination etc. for permission to file manual Shipping Bill for export on hand carry basis, b. Assistant Commissioner (Export) then forwards the same to Commissioner (Airport) for necessary permission, c. After taking permission, party submits another letter for filing Shipping Bill on hand carry basis, d. On the basis of Assistant Commissioner's (Export) permission, Office Superintendent allots Shipping Bill number on the front page of the four copy of Shipping Bills and sign the same and affixes the stamp; e. All Shipping Bill copies are forwarded to Data Entry Operator for entry of Shipping Bill details, f. Shipping Bill is then presented to....
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.... issued export certificate regarding gold consignment to exporters like Shree Ganesh Jewels on the same date as the one on which the Shipping Bill was processed without getting a verification report from SDO (Departure), that actual export took place. It was also pointed out to her that on the basis of such certificate, canalizing agencies like Diamond India, STC, MMTC etc were refunding the security deposit to the exporters. In reply, Smt. Mukherjee submitted that she had written the letter to the SDO (Departure), for information regarding the specific export consignment and to hand over the goods to the person concerned after completion of all export formalities; that the parties had mis-used the letters; that the matter was between the exporter and the canalizing agents, she had no responsibility in the matter. 15.2. In his voluntary statement, Shri Dhruvajyoti Roy, Deputy Commissioner of Customs, inter alia submitted that: - i. He joined ACC on 10.07.2017 as Assistant Commissioner and since 01.04.2018 had been working as Deputy Commissioner; that he was holding charges of Export assessment, Import Shed, Un-accompanied baggage, transshipment, IGM and Administra....
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....roval for manual filing of Shipping Bill; that he saw the Commissioner's signature and thought approval was given, but actually the Commissioner had approved the Joint Commissioner's note only; that it was unfortunate. iii. In response to another question Shri Dhruvajyoti Roy, Deputy Commissioner submitted that the letter of the exporter dated 29.03.2018 was received in the office on 02.04.2018 (mistakenly written as 02.03.2018); that it speaks of grant of permission by Commissioner; that accordingly file was put up by the Appraiser for filing of manual Shipping Bill; that he had already stated earlier that he mis-read the Joint Commissioner's note and considered it as Commissioner's approval because there was no export of gold jewellery on hand carry basis in between 21.02.2018 and 03.04.2018. Shri Roy further submitted that :- a. Examination orders were given by Group Appraiser on Xerox copy of note sheet. In one such copy of note sheet, submitted by Shri Malay Das, Preventive Officer, it was found that the copy of note sheet was not matching with the original note sheet in file. b. It was submitted by the Preventive Officers that consig....
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....edure, an amount equal to the duty payable on the purchased gold has to be deposited with the nominated agencies as security deposit. After filing of Shipping Bills showing export of gold jewellery and completing all export formalities, he used to divert the gold jewellery from the airport to the domestic area and used the export documents to get back the security deposit made at the time of procurement of gold from the nominated agencies. He then sold the duty free imported gold procured from the nominated agencies in the open market earning huge profits. (ii) For procuring gold from the nominated agencies under the scheme Export Against Supply By Nominated Agencies, provided in Foreign Trade Policy, the respective firms have to deposit security amount equal to the duty payable on the gold purchased by them. As prescribed in Foreign Trade Policy / Hand Book of Procedure, the gold jewellery has to be exported within 90 days of procurement of gold from the nominated agencies. After export, on production of EP Copy of the Shipping Bill and the bank realization certificate, the security amount were either refunded back to them or adjusted against further procurement of gold. ....
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.... instead of delivering it in the security hold area. He also did not verify whether Shri Preet Kumar had obtained his boarding pass for overseas journey and that whether he had completed immigration formalities or not before handing over the boxes containing gold jewellery. Utilizing the opportunity that his immigration formalities were not complete, Shri Preet Kumar, after taking delivery of the two boxes containing gold jewellery at the SDO office, sneaked back to the gate of the departure terminal and handed over the trolley bag containing the sealed boxes containing gold jewellery to his father Shri Sanjay Agarwal, who was waiting outside. Shri Sanjay Agarwal took the two boxes to Indigo Airlines domestic Cargo and booked the same for delivery to Hyderabad with the help of an agent and himself boarded a flight to Hyderabad, travelling in a ticket bought in the name of his son Shri Preet Kumar Agarwal. Shri Preet Kumar Agarwal proceeded to take his boarding pass, clear immigration and went to board his flight to Dubai without the export consignment with him to complete the export process on paper. (v)The entire operation was well thought out and preplanned, as clear fro....
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....quent overseas traveller, Shri Preet was well aware of the different formalities at Airports. After getting hold of the sealed boxes containing gold jewellery for export, he went to the gate of the departure terminal and told the CISF personnel manning the gate that he had some excess baggage which he wants to hand over to his father waiting outside the terminal gate. As it is a very common practice among overseas travellers, where one has to pay heavy charges for carrying excess baggage, the CISF personnel allowed Shri Preet to hand over the bag containing gold jewellery to his father Sanjay, who was waiting outside. 19. Accordingly, a Show Cause Notice dated 29.03.2019 vide SCN No. DRI/KZU/AS/ENQ-28/2018 was issued to show cause to the Commissioner of Customs (Airport & Admn.), Custom House, 15/1, Strand Road, Kolkata was issued to all the noticee(s) inter alia on the following allegations: - (i) The 1194 pcs of gold bangles weighing 54096 gm and ascertained value of Rs. 16,10,43,792/, which were cleared for export by Customs under Shipping Bill No. 6530662 dt. 03.04.2018 of Shree Ganesh Jewels and handed over to the declared hand carrier Shri Preet Kumar Agarwal insi....
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.... aware of the illegal activities of Shri Sanjay Agarwal. In course of investigation, it was found that in the past, his name was mentioned as hand carrier of gold jewellery in many a Shipping Bills. He himself admitted that many a times in the past he went to Dubai as hand carrier without any gold jewellery with him. In his statement, he claimed that on those occasions Shri Sanjay Agarwal told him that Customs has not given permission for export of gold, but as the airline ticket was already bought, he should proceed to Dubai. Shri Soni was involved in the trade for quite some times and he is also an intelligent person. It is not believable that he was unaware of the implication for such export on paper without actual carriage of gold jewellery. It appears that for the lure of earning money, he never raised any alarm about the illegal activities undertaken by Shri Sanjay Agarwal using his name. He also admitted that he had signed on the blank bank cheques of Shree Ganesh Jewels as per direction of Shri Sanjay Agarwal and handed over to him. Further, his two debit cards were also recovered from the wallet of Shri Sanjay Agarwal at the time of his interception at Kolkata on 04.04.201....
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....nbsp; (vi) Smt. Champa Mukherjee and Shri Dhruvajyoti Roy were found to have processed the subject manual Shipping Bill No. 6530662 dt. 03.04.2018 of Shree Ganesh Jewels without obtaining the mandatory permission from Commissioner (Airport). They also ignored the clear instructions given by the Joint Commissioner and Commissioner (Airport) earlier not to allow the exporter to file such manual Shipping Bill. Smt Champa Mukherjee, Appraiser was also found to have issued a letter to SDO (Departure), with a copy to exporter Shree Ganesh Jewels, to hand over the two sealed boxes containing gold jewellery for export to the hand carrier. The letter would have helped the exporter to get back the security amount from the nominated agency as on the previous occasions. But she herself admitted that she had neither examined the gold jewellery, scaled the boxes containing jewellery nor handed over those boxes to the Preventive Officer for escorting to SDO (Departure). It was also found that the examination order was given by her in the note sheet and not the back page of the duplicate copy of Shipping Bill, in complete violation of the Laid down procedure. Smt. Champa Mukherjee also at....
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....and registered proprietor of Kalpataru Jewellers and Exports Corporation was also found to be an active member of the syndicate run by Shri Sanjay Agarwal to divert export consignment of gold jewellery so that gold purchased without payment of duty could be disposed of in the domestic market against huge profit margin. He had also admittedly diverted gold consignments in the past in similar manner. After interception of Shri Sanjay Agarwal and Shri Preet Kumar Agarwal, he came rushing into Kolkata to secure their release. He is thus an integral part of the syndicate behind the conspiracy to defraud the state exchequer, not just on the past occasions, but also with respect to the attempted diversion of 54096 kg of gold jewellery on 04.04.2018. For the role played by him, Shri Ajay Kumar Agarwal appeared to be liable for penalty under Section 114(iii) of the Customs Act, 1962. 20.1. Accordingly, proposals were made in the above Show Cause Notice in respect of the following noticees asking them to show cause as to why: - • Shri Sanjay Agarwal, Villa No. 41. Orion Vilias. NSL Infrastructures, Raidurgam, Gachibowli, Hyderabad 500032, • Shri Preet Kumar....
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.... O. Nabagram, Hooghly (i) Penal action shall not be taken against them for their omission and commission as discussed here in above in terms of Section 114(iii) of the Customs Act, 1962. 20. Thereafter, the matter was taken up for adjudication by the Ld. Commissioner of Customs, Airport & Air Cargo Complex, Custom House, Kolkata, who, vide the impugned Order-in-Original No. KOL/CUS/AIRPORT/COMMR/ADMN/22/2023 dated 31.07.2023, has passed the following order: - "(i) I order confiscation of the consignment of 1194 pcs gold bangles weighing 54096 gms. and of ascertained value of Rs. 16,10,43,792/-, which were cleared for export under Shipping Bill No. 6530662 dt. 03.04.2018 and subsequently seized by DRI after diversion in the domestic area under section 113(k) of the Customs Act, 1962. However, I give an option to Shree Ganesh Jewels to pay a redemption fine of Rs. 80,00,000/- (Rupees Eighty lakh only) in terms of the Section 125 of the Act ibid in lieu of the said confiscation. (ii) I impose a penalty of Rs. 10,00,000/- (Rupees Ten lakh only) on Shri Sanjay Agarwal under Section 114(iii) of the Customs Act, 1962. (iii) I impose a pen....
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....th the Group Appraiser of Customs at the Air Cargo Complex (ACC) for export. The Group Appraiser and Shed Appraiser verified the consignment, appraised the goods, and sealed them in two boxes. The Preventive Officer (PO) was instructed to escort the sealed boxes to the Station Duty Officer (SDO) at the International Passenger Departure Terminal. The Preventive Officer (PO) escorted Preet Kumar Agarwal, along with the two sealed boxes, to the office of the Station Duty Officer (SDO) at the International Passenger Departure Terminal. The Station Duty Officer (SDO) prematurely handed over the sealed boxes to Preet Kumar Agarwal without ensuring that immigration and boarding formalities had been completed Preet Kumar Agarwal proceeded to the Emirates Airlines check-in counter with the sealed boxes but was denied permission to carry the 54 kg consignment as hand baggage due to the airline's 7 kg limit. It is to be noted that version of events is disputed by the Department alleging that Preet Agarwal proceeded directly to the Airport Terminal Gate to hand over the said goods to Sanjay Agarwal. This al....
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....re-entry into the SDO office has not been disclosed as part of the RUD). April 5, 2018 Goods were seized under Section 110 of the Customs Act through a Panchnama. Summons were issued to the aggrieved persons under Section 108, and statements were recorded under coercion. Notably, summonses were issued to the aggrieved persons even though were already under custody of the DRI. Both PA and SA were continuously under the custody of the DRI from 4.4.2018 evening as per record of the instant case. April 6, 2018 Preet Kumar Agarwal, and Ajay Kumar Agarwal were formally arrested under Section 104 of the Customs Act and remanded to judicial custody. They retracted their statements before the Chief Judicial Magistrate. May 16, 2018 Avinash Soni was arrested and retracted his statement before the Magistrate, citing coercion and threats. June 1, 2018 Preventive detention orders were issued against the appellant-exporter and others under the Conservation of Foreign Exchange and Prevention of Smuggling Act (COFEPOSA). August 16, 2018 ....
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....Foreign Trade Policy. The fact of the gold being sourced from DIL and not STCL or any other nominated agency is apparent from the Invoice dt. 3.4.2018. (ii) Detailed records were maintained by Shree Ganesh Jewels, including invoices issued by Diamond India Limited, which confirm the legitimate purchase of the gold. These transactions are documented in the Show Cause Notice dated 29.3.2019 as well as the appellant's reply thereto dated 29.5.2023, substantiating that the gold from DIL was purchased lawfully with the intent for export. The consignment in question consisted of 54.096 kg of gold bangles, valued at $2,213,425 USD (approximately INR 14.19 crore) on a Free on Board (FOB) basis, destined for Jumeriates Gold Jewellery LLC, Dubai. A manually filed shipping bill (No. 6530662 dated April 3, 2018) was duly prepared, and together with supporting documents, including the invoice, packing list, and an undertaking letter dated April 4, 2018, were submitted to the customs authorities. (iii) As maintained by the appellants in their reply dated 29.5.2023, the invoice explicitly declared that the imported gold was sourced from Diamond India Limited, with no ambig....
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....session of a person and requested the DRI to repossess such goods from him. In his submissions before this Tribunal at the hearing dt. 25.2.2025, written version whereof was shared with the aggrieved persons, the SDO has clearly conveyed that he contacted the DRI after being informed by Preet Agarwal that he was trying to return the said goods to the Department through his father, Sanjay Agarwal who was stranded outside the Air Cargo Customs, trying to return the said goods to the Customs authorities. Evidently, if the alleged diversion of the said goods has occurred, it has not happened on account of any wilful act, negligence or default on the part of the exporter herein or its agent. • Relied upon statements either retracted or contradict diversion theory (i) The said reply dated 29.5.2023 submitted by the appellants highlights the procedural lapses and admissions of fault/culpability by customs officials, which led to the said goods remaining within the DTA, and prevented the same from being exported in the manner intended. The Preventive Officer, Satya Gopal Mallick, in his statement dated April 18, 2018, admitted that he escorted ....
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....5.4.2018 each for Preet Agarwal and Sanjay Agarwal for securing their attendance in spite of both parties being in the custody of the DRI since the evening of 4.4.2018 as maintained in the retraction statements of Preet Agarwal and Sanjay Agarwal dated 6.4.2018. The purported Panchnama dt. April 4, 2018 drawn up by Panchas Rudra Poddar and Biswajit Ghosh also indicates that the Panchnama proceedings allegedly commenced from 1810 hours and concluded at noon the following day on April 5, 2018. The Panchnama indicates that Sanjay Agarwal and Preet Agarwal were questioned about the subject export indicating that they were detained overnight. The first summons notice dated 5.4.2018 required SA, PA's attendance at 8 AM and 8:30 AM respectively. Hence the statements would have been recorded while the Panchnama proceedings were going on. The second summons required the attendance of SA and PA at 1:00 PM on 5.4.2018, but the second statements recorded from them reveal that they were obtained on the next day on April 6, 2018, being the day they were formally arrested and produced before the ACJM. It is clear therefore, that SA and PA were under the custody of the Department, yet summons noti....
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....8 ought to be rendered unreliable and any inference drawn therefrom set aside. (iii) The entire case of conspiracy in the present case is built upon retracted statements obtained in such questionable circumstances involving the issuance of unnecessary summons notices to persons while they were under arrest/in custody. The said statements of the PO and SDO would also indicate that they had absolutely no knowledge of any conspiracy and they had merely made a mistake in procedure. • Arbitrary and unreliable seizure procedure followed by DRI (i) Significantly, the validity of the panchnamas and the reliability of panchas/witnesses, are also questionable. The panchas through the said RTI application were revealed to be housekeeping staff and not actual witnesses to the events and had signed out at the time the Panchnama proceedings were purportedly going on. The procedural lapses and coerced statements relied upon by the DRI, as detailed in the said Reply dt. 29.5.2023, undermine the credibility of the case built against the exporter. In particular, as mentioned in the said reply dated 29.5.2023, and duly reproduced in the said impugned order, ....
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....he goods to customs after Emirates Airlines denied the gold as hand baggage owing to the maximum hand baggage limit being 7kg (Briefcase or Garment Bag) + 7kg (carry on). The withholding of such evidence, it is submitted, violates the principles of natural justice, as it denied the appellants a fair opportunity to establish its case. The Commissioner, in spite of acknowledging the said reply dated 29.5.2023, has failed to comply with such request, and proceeded to pass the said impugned order holding that the CCTV footage was purportedly provided during the COFEPOSA proceeding, though such footage was not continuous and did not contain the vital recordings of Preet Agarwal's movements post check-in, that could have established and confirmed that he voluntarily visited the SDO's office to inform him of the mishap. Likewise, the confidential CISF report, though listed as part of the RUDs, was not actually provided to the appellants prompting them to specifically request the same in the course of adjudication. (ii) By the said reply dated 29.5.2023, the appellants also raised concerns about the confidential report from the Central Industrial Security Force (CISF) which ....
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....bsp; (vi) No reliance therefore can be placed on the impugned order, that culminated from the stated procedural improprieties, the resulting prejudice and impairment whereof, caused to the appellants/noticees, cannot be repaired or reversed at this stage. The said impugned order is thus, for this reason alone, liable to be set aside. • Denial of Cross Examination and violation of Natural Justice principles (i) In view of the aforesaid, particularly given the questionable summons notices, RTI declarations indicating the absence of the Panchas at the time of the Panchnama proceedings on 4.4.2018 to 5.4.2018, the corroborative retractions by the aggrieved persons on the ground of coercion and duress, and the admissions of the SDO and the PO of their mistakes, it ought to have been apparent to the Commissioner, that there was sufficient basis for allowing cross examination of the Customs officers and Panchas, as demanded by the appellants by their reply dated 29.5.2023 in paragraph 1.38 thereof (ii) In this regard, it is trite law, if there is substantial inconsistency in the relied upon evidence and retractions by key witnesses, abse....
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....s. (ii) The samples of the said goods were also purportedly tested by the Customs Chemical Laboratory as indicated by the Test Report bearing Lab No. 135- 138/SZD(G)-51-54 dated 18.04.2018 & Lab No. 139-142/SZD(G)-55-58 dated 18.04.2018. (iii) None of the Valuation Reports dated 5.4.2018 of the said authorised assayers or the laboratory report were shared with the appellants until after the Show Cause Notice was prepared and issued to them. No opportunity of retesting was offered to them in violation of Circular No. 30/2017-Cus., dated 18-7-2017, and there was also no scope for the appellants to verify the nature of valuation or raise any objections thereto or seek a revaluation. (iv) Notably, the said Valuation Reports dated 5.4.2018 fail to explain any basis or methodology for the valuation and are prima facie inconsistent with each other. One box (Box 1) containing 580 bangles has been valued at Rs. 8,30,34,484/- having weight of 27892 gms whereas another box (Box 2) containing 614 bangles (34 more bangles than box no. 1) has been valued at Rs. 7,80,09,308/- due to its weight being measured at 26204 gms. There are no details reg....
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....value of gold from the time of appraisement to the time of revaluation was in fact the only reason for the increment, the appellants cannot be alleged to have misdeclared the value of gold in the shipping bill drawn on 3.4.2018, and/or to have falsified any records or presented any incorrect declaration in the invoice, packing list, shipping bill or other accompanying documents that could potentially attract penalties under Section 114, 114AA of the Act, or could render the said goods liable for confiscation under Section 113 thereof. (vi) Likewise, the CRCL measures the purity of some samples at 92% and others at around 91%, and it is not clear what purity has been finally determined for the entire consignment, since as aforesaid, the Valuation Reports preceded the CRCL report by 13 days and could not have considered or realistically relied upon such purity values in any manner whatsoever. In any event, the gold purity declared for the entire consignment in the Shipping Bill was 92.385% at 22 carats, and is not markedly different from the samples tested to justify such a dramatic increase in course of revaluation. (vii) The procedure for testing....
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....otage particularly during the time post check-in of Preet Agarwal for his flight to Dubai on 4.4.2018, as requested by the said reply dated 29.5.2023, being the critical time during which Preet Agarwal met with the SDO, the same has never been shared with the noticees by the Department. The opportunity to cross examine the SDO to verify how he managed to learn of the purported diversion and if Preet Agarwal voluntarily approached him to share news of the stated mishap was also denied by the Commissioner to the appellant, preventing them from determining and/or establishing the truth of the events. (ii) Significantly, as also apparent from the history of transactions produced with the Show Cause Notice it is apparent that Preet Agarwal had never previously hand-carried goods for purposes of export, and this was, as maintained in the said reply dated 29.5.2023, his first attempt at exporting the said goods. (iii) In any event, where it is plain that the said goods remained within the DTA owing to lapses on the part of the SDO and the PO, and such lapse is being determined by the Adjudicating Authority as merely procedural and not tantamount to diversion,....
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....ct cannot be said to have been satisfied in the instant case. (ii) In particular, Section 113(k) of the Act applies only to instances where exportable goods are not loaded onto the vessel on account of the "wilful act, negligence or default of the exporter, his agent or employee". In the present case, the oversight, shortcomings, or negligence, was entirely to the account of the Department as admitted by the respective officers, Pallav Roy Chowdhury, Dhruvajyoti Roy, Champa Mukherjee, and Satya Gopal Mallick. The goods were entirely in the custody of the Department and ought to have remained that way until Preet Kumar Agarwal boarded his flight. It was on account of the actions of the Preventive Officer, that the boarding and immigration procedure was bypassed, and the failure of the SDO to retain the goods post completion of all formalities, that left Preet Kumar Agarwal stranded in the Departure Terminal at the said airport. There is no basis for confiscating the said goods therefore, the preconditions to Section 113(k) of the Act not being fulfilled in the present case. (iii) In view of the inapplicability of Section 113(k) o....
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....dicate, and the appellants are not acting in collusion with each other to evade duty or to improperly export goods. There is no evidence to indicate that Avinash Soni is not the proprietor of Shree Ganesh Jewels or that Sanjay Agarwal is the de facto controller of such concern. Allegations to this effect are baseless and erroneous. Even otherwise, the alleged proximity to or purported influence of Sanjay Agarwal on the operations of Shree Ganesh Jewels does not establish that no genuine attempt was made by the appellants to export the said goods. Evidence of past exports was provided by the said reply dated 29.5.2023 and brought to the attention of the Commissioner. The procedural lapses that the Commissioner observes on the part of the customs officials in para 65.1.2 and para 65.3.2 in the impugned order, that led to the alleged "deviation" could not have been foreseen by any person including the persons making the errors, since these lapses were not deliberate as held by the Commissioner. It is inconceivable therefore, how the DRI could have had advance intelligence about the diversion, when the alleged event, as acknowledged by the Commissioner was a consequence of inadve....
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....ppointed by the said exporter concerned, Preet Agarwal in particular. 23.3. The noticees/co-noticees have also prayed for dismissal of the appeal filed by the Revenue as being non-maintainable and/or having no merit whatsoever. 24. On the other hand, in respect of the appeal preferred by the Revenue, the Ld. Authorized Representative of the Revenue has urged the following grounds: - (i) That the Adjudicating Authority had failed to consider the fact that Shri Dhruvajyoti Roy, Deputy Commissioner of Customs in his voluntary statement had himself accepted the fact that he had mis-read the Joint Commissioner's comment for filing of manual Shipping Bill and thought that the Commissioner had given his acceptance, which was unfortunate; that while approval of the Commissioner was available for only five consignments, he had given his consent on all the Shipping Bills on the misapprehension that the procedure began with the AC's consent; that Shri Roy took the pretext of being new in the Customs formations and unaware of the Customs procedure, and ultimately absolved Shri Roy of all the charges terming the said lapse as merely procedural, when the amount....
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.... not and should not have been only on the SDO (Departure), who was just one of the players in the entire ecosystem. (v) That the adjudicating Authority had made a gross error of judgement by letting off Shri Sanjay Agarwal so cheaply, who had self-admittedly diverted gold meant for export in similar fashion on past four -five occasions as well and where all diverted gold consignments were being exported in the name of Shri Ganesh jewels and that since October, 2017. Shri Agarwal had diverted about 500 kgs of gold in this fashion; that one consignment of gold bangles was diverted from Kolkata airport after completion export procedure and again on 17.01.2018, another consignment was diverted in a similar fashion. Shri Sanjay Agarwal had further recorded in his statement that when hand carrying of export consignment of gold bangles was stopped at Kolkata, he shifted to Hyderabad and had successfully diverted 50 kgs of gold bangles, which points out that Shri Sanjay Agarwal, was habitual offender and the master mind of the whole fraudulent operation. That the gravity of offences merited more stringent penal action both as personal penalty to all the noticees involved and....
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....tant case, the value of the seized gold jewellery at the time of seizure was Rs. 16,10,43,792/-, with a duty liability of Rs. 1,45,70,755/-. The total quantum of RF and PP imposed is only Rs. 99,00,000/- (Rs. 80,00,000/- + Rs. 19,00,000/-), which is not even 10% of the seizure value and also does not cover the duty liability on the primary gold, which had purportedly been used for the manufacture of the seized gold jewellery, and therefore, would have been part of the profit that the syndicate was intending to make by diverting the gold jewellery meant for export. The Adjudicating Authority was required to give proper, valid and cogent reasons for passing the order with regard to the quantum of RF and PP, which appears to be grossly inadequate, which is absent in the instant Order-in-Original and needs to be addressed and rectified. 24.1. Accordingly, the Ld. Authorized Representative of the Revenue has prayed for setting aside the impugned order by way of allowing the Revenue's appeal and for imposing higher redemption fine and higher penalties in respect of all the noticees considering the higher gravity of offence committed by the said persons. 24.2. He also prayed f....
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....the export was being done through ACC, which is an EDI equipped port and so far, manual filing of shipping bill, Commissioner's permission is mandatory. Moreover, the export is being done through Hand Carry basis, where no airway bill is involved, so the shipping bill cannot be filed in the EDI systems. Therefore, in such instant case of export through hand carry basis, the only way to file shipping bill and process is manually. It can also be seen from the files that in similar situations, the same Jt. Commissioner had recommended for permission of filing manual Shipping Bills earlier and the same was approved by the Commissioner. Thus, it is clear that the Commissioner had allowed filing of manual shipping bill in spite of the Jt. Commissioner's note, which is technically incorrect. When the file was put up before him (Shri Dhruvajyoti Roy) on 04.04.2018, and upon seeing the Commissioner's signature, it was thought that the permission for manual filing of shipping bill was approved by the Commissioner and so processing of the Shipping Bill was allowed on that basis. Hence it is contended that there is no lapse on his part on this count. Hence invocation of the provisi....
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....hat time, he wanted to load his export consignment in his hand baggage, which was disallowed by the boarding staff of Emirates airlines for the reason that only 7 kgs. was permissible in hand baggage. Thereafter, he contacted his father, Shri Sanjay Agarwal, who asked him to give the container having the said gold jewellery to him, who was standing outside the Airport. Shri Preet Kumar Agarwal thereafter had approached the SDO to explain the situation that the said goods were unable to be checked in, but at that time, the SDO called the DRI and he was arrested. 28.2. Whereas, the version of the DRI is that on an intelligence that the export consignment would be diverted, the DRI caught Shri Preet Kumar Agarwal while he was proceeding to Gate No. 11 of the NSCBI Airport while boarding the flight while having no jewellery in his hand. 29. As there were twisted facts from both the sides, to know the truth of the facts, the CCTV footage was very much relevant in order to ascertain as to whether the exporters were correct or the DRI was correct. However, admittedly, the CCTV footage was not placed before us and are not part of the relied upon documents. However, other CCTV footage....
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....of the DRI on 04.04.2018 when Panchnama proceedings were going on. There was no requirement to issue summons to the exporters on 05.04.2018 for appearance on 06.04.2018. This shows that the said summons have been issued to cover up other lapses in the investigation. 31.2. Further, we also find that the non-supply of Relied Upon Documents (RUDs) is in violation of the principles of natural justice. 32. We also take note of the fact that although COFEPOSA proceedings were initiated, the proceedings against Shri Preet Kumar Agarwal were dropped vide Order of the Central Economic Intelligence Bureau, COFEPOSA Wing dated 16.08.2015, who, as per the allegations, was the main person involved in diversion of the gold jewellery in question. When the COFEPOSA proceedings against the person who was involved in diversion of the gold jewellery in question as per the investigation have been dropped, the case against the co-exporters are also not sustainable, as has been held by the Hon'ble Delhi High Court in the said proceedings vide judgement dated 27th August, 2018. This fact also raises an eyebrow on the investigation conducted in this case. 33. Althoug....
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....ly 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. Admittedly, in this case, documents were not found to be false or fabricated. Therefore, we hold that provisions of Section 114AA are not attracted in the present case to impose penalty. 37. Now, the issue arises as to what should be the quantum of redemption fine to be imposed in this case. We find that the appellants-exporters have submitted that the value addition is only to the extent of Rs. 43,400.43 if making charges of the said jewellery after importation are taken into consideration. Thus, we are of the view that the redemption fine imposed on the appellant is on the higher side. Accordingly, we reduce the redemption fine imposed to Rs.15,00,000/- (Rupees Fifteen Lakhs only) 38. We further take note of the fact that the Revenue has also challenged the impugned order qua enhancement of redemption fine and penalties imposed on the exporters/noticees and dropping of proceedings against the other co-noticees, namely, Shri Dhr....
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....jewellery consignment is also permitted as per policy and circular. I find that there is no evidence of involvement of these officers in the act of diversion; rather they have processed the consignment for export. The modus operandi of the exporter in the instant case shows that the diversion occurred due to the gap/loophole/lapse at the last stage of handing over of consignment to the exporter for hand carriage just before boarding wherein the aforesaid two officers are not involved. I also find that there is no evidence of connivance of these officers with the exporter. Therefore, I find that these officers are not liable to penal action for rendering the impugned consignment liable to confiscation under section 113(k) of the Customs Act, 1962. The aforesaid officers acted without proper permission of their superior officer, and committed other procedural laspes (sic), which may have made them liable to disciplinary action, which is not the subject matter of instant proceedings. 65.2 I find that penal action has been proposed against Shri Satya Gopal Mallick, Preventive Officer. The allegations against him is that he escorted Shri Preet Kumar Agarwal directly to the SDO ....
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....onsignment of 54.096 kg of gold jewellery covered under Shipping Bill No. 6530662 dt. 03.04.2018, his role has not been established. In view of the above, he can't be directly linked to confiscation of the Impugned live goods under section 113(k) of the Customs Act, 1962." 38.3. We do agree with the above observations made by the ld. adjudicating authority in the impugned order and therefore, we hold that the proceedings initiated against the said respondents have been rightly dropped. 38.4. Further, we find that the Revenue is in appeal against the dropping of proceedings against M/s. State Trading Corporation of India Limited, Chennai, Tamil Nadu. In this regard, we find that M/s. State Trading Corporation of India Ltd. is an importing agency who is allowed to import gold and is further entitled to clear the said gold in the domestic market in terms of Notification No. 57/2000-Cus. dated 08.05.2000, and they are not liable to pay duty at the time of importation showing fulfilment of export obligation against their purchase within three months thereof. Admittedly, M/s. State Trading Corporation of India Ltd. is not the importer in this case; the actual importer is M/s. D....