TaxTMI 
TaxTMI 
2026 (1) TMI 667
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....ar [Appellant No.3], the Assistant Manager (Commercial and Operation) of Appellant No.1, to the extent of imposition of penalty of Rs.50,000/- under Section 114AA of the Act. 4. Since the aforesaid three appeals arise out of the common Show Cause Notice [SCN] dated 31.03.2023 and common Order-in-Original No.12/PC/NOIDA-CUS/2024-25 dated 28.03.2025 hence, all the three appeals are heard together. 5. The Appellant No.1 is a public sector undertaking engaged in transportation and handling of containers and during the relevant time, the Appellant No.1 was also maintaining Container Freight Station [CFS] at Inland Container Depot [ICD], Dadri U.P. The Appellant No.2 & 3 are employees of Appellant No.1 and during the relevant time were working as Assistant Manager (Commercial and Operation) of Appellant No.1. 6. Briefly stated, the facts of the case are such that on 15.11.2018 at around 10:59 Hrs., the staff of the Appellant No.1 in EXIM-Cell issued Entry Permits numbers EPC181115005 & EPC181115006, for two loaded containers bearing numbers BMOU5791210 & SEGU5336240, on the basis of letter dated 15.11.2018 of Shipping Line namely M/s Star Shipping Services (India) Ltd. and check....
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....rom 24.11.2018 to 26.11.2018 under the supervision of SHED Customs for 100% physical examination of goods. However, on the basis of Export Application slip dated 16.11.2018 prepared by the employees of the Appellant No.1, the officers of SIIB formed an opinion that auto parts were allowed gate in on 16.11.2018 in two containers against a fictious Shipping Bill dated 16.11.2018 and since the export documents filed with the customs for registration of goods and export documents submitted with the employees of the Appellant No.1 indicated different shipping bills and different names of customs brokers for the same consignment, hence SIIB officers examined the consignment from 29.11.2018 to 03.12.2018. During further investigation, statements of various persons including the Appellant No.2 & 3 were also recorded on 14.11.2018. Thereafter, on the request made by the exporter for provisional export, the consignment was allowed clearance for export provisionally and the consignment was eventually dispatched for export on 25.01.2019. SCN No.30/PC/Noida Customs/2022-23 dated 31.03.2023 was then issued against M/s Kunal International (exporter), M/s LUAS Maritime (freight forwarding company)....
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....ellants. Lastly, he argued that the findings recorded in the impugned order are perverse and incorrect. 12. Per contra, learned Departmental Authorized Representative appearing for the revenue supported the impugned order and the findings recorded therein. He argued that penalties have been rightly imposed against the present Appellants. 13. Heard both the sides and perused the appeal records. 14. A perusal of the impugned order shows that eight questions have been framed by the Adjudicating Authority in paragraph 19 in the impugned order, out of which questions No. (E), (F) & (G) relates to the present Appellants. While deciding questions No. (E), (F) &(G), the Adjudicating Authority has recorded findings to the effect that the Shipping Bill, on the basis of which gate in was allowed, was bearing the name of some other exporter whereas the entry permit was in the name of the instant exporter, no export loaded container can be gated in at CONCOR CFS on the basis of export application under any circumstances, the submission that dummy export application with dummy Shipping Bill No.1234567 was prepared only for the purpose of calculation of dues does not merit acceptance. Fo....
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....ed 16.11.2018 and dummy Shipping Bill No.1234567 dated 16.11.2028 is clearly perverse and incorrect. 17. Once the finding recorded in the impugned order that the Export Application and dummy Shipping Bill were used for gate in of two containers is found to be incorrect and there is also no allegation in the SCN or in the impugned order to the effect that the dummy shipping bill was otherwise used by the Appellants or any other person for any purpose whatsoever, then the case setup by the Appellants that the export application and the dummy shipping bill were prepared only for calculation of dues appears to be correct, inasmuch as the number of dummy shipping bill was 1234567 which is clearly not a unique, system generated identifier assigned to shipping bill by the Indian Customs Electronic Data Interchange [EDI] systems. Even otherwise, when the allegation of use of shipping bill is found to be incorrect and there is complete absence of any other allegation regarding the possible misuse of dummy shipping bill, there cannot be any reason for the Appellants to generate a dummy shipping bill. The reason given in the impugned order that dummy export application and shipping bill we....
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....is not followed, it has to be regarded, that the Revenue has given up the said witnesses, so that the reliance by the CCE, on the said statements, has to be regarded as misguided, and the said statements have to be eschewed from consideration, as they would not be relevant for proving the truth of the contents thereof." 19. In view of the law stated above, it was not open for the Adjudicating Authority to straight away rely on the statements and he was required to either invoke clause (a) of Section 138B(1) or admit the statement in evidence and thereafter proceed with the matter in accordance with Section 138B. Having not followed this procedure and not invoked Section 138B, the Adjudicating Authority has clearly relied on inadmissible evidence. I also find that penalty under Section 114AA can be imposed only where a person knowingly or intentionally makes, signed or uses, false and incorrect material, in the transaction of any business under the Act. In the present case, there is no evidence on record that the dummy export application or dummy shipping bill were used for any purposes in the transaction of any business under the Act. At any rate, Section 114AA can be invoked on....