TaxTMI 
TaxTMI 
2026 (5) TMI 1686
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....ISSIONER/ADJN/12/2025 both dated 25.06.2025 passed by the Principal Commissioner of Customs (Airport & A.C.C.), Kolkata. 2. Brief facts of the cases are that acting on specific intelligence gathered by the Special Investigation Branch (SIB) of Airport & A.C.C. Commissionerate, Kolkata, it was revealed that 05 consignments [live consignments] (in respect of Appeal No. C/76686/2025) and 26 consignments (C/76751/2025) had been removed without complying with the established procedure and payment of legitimate Customs Duty thereon, for which separate proceedings have been initiated by the Revenue. The investigating agency alleged the involvement of the Airport Authority of India/AAICLAS staff and staff of Ground Handling Agency, namely, M/s. Bhadra International India Limited (BIIL) in the modus operandi, amongst others, thereby leading to evasion of huge Customs Duty and loss to the government exchequer. Five (05) live consignments: 3. The Revenue alleged clandestine removal of goods from the Customs Area without complying with the established procedure at ACC, Kolkata in respect of 05 live consignments, which are as under:- (i) Air Way Bill No. 17658439592 (....
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....+ 1,56,69.697.00] Rs. 3,85,02,197/-. (e) The investigation revealed that the address of IEC was occupied by some other firm and also no delivery order was issued against the said consignment imported in the name of IEC holder. Accordingly, the importer (IEC holder) i.e. M/s Arcturus System Pvt. Ltd. has been absolved by the previous adjudicating authority vide Order in Original No.KOL/CUS/COMMISSIONER//AP/Admn./21/2018 dated 06.09.2018. (III) Air Way Bill No. 17656233004 (a) The goods declared as Car Washer and Blanket (231 KG) imported under the IEC holder namely M/s AIFA Medichem Pvt. Ltd., found inside the ASRS location of Air Cargo Complex, were seized on 06.09.2017, which on examination were found to be "Protein supplements, UPS devices, Cap, liquid Shakers, sacks" (b) Further, the said consignment was again examined on 22.11.2017 on some intelligence, whereupon ten (10) pieces of gold bars weighing a total of 10 kgs were found concealed inside two (2) UPSs, whose assessable value was ascertained to be Rs. 2.98 crores. (c) Hence, total amount of the consignment was estimated to be Rs 3,1615,278/- [Assessable value of other goods Rs. 10,48....
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....ated Customs fraud and also recovery of valuable goods before they could be removed from the Customs area by the smuggling syndicate. Twenty Six (26) consignments: 4. Proceedings pertaining to missing goods/consignments of twenty six (26) Airway Bills, wherein the value of the goods is Rs. 50,12,61,725/ and Duty involved is Rs 12,67,03,863/- were also initiated. The details of the said consignments are tabulated in the table given below. The Investigation agency has done the valuation in proportionate to Weight of each Air Way Bill, as available in each Airway Bill pertaining to the Air Way Bill no, used as Base Reference of similar period. Accordingly, the valuation for these 26 missing consignments is as under:- Sl. No. Air Way Bill Value Re- Determined (in Rs.) Customs Duty Determined (in Rs.) 1 176-37473800 3121868 3908596 2 176-53886136 13429283 3262799 3 176-53178742 21834399 2715146 4 176-53180326 946449 1184959 5 176-53388845 24261254 5894552 6 176-53181402 1031205 1291075 7 176-52702241 14757454 3585494 8 176-56109896 14757454 3585494 9 176-55598955 36....
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....lectively referred to as the 'impugned orders') wherein, inter alia, penalties of Rs.10,00,000/- (Rupees Ten Lakhs only) and Rs.5,00,000/- (Rupees Five Lakhs only) under Section 112(a) and (b) of the Customs Act, 1962 came to be imposed on the present appellant, namely, Shri Vikash Kumar by the Principal Commissioner of Customs (Airport & A.C.C.), Custom House, 15/1, Strand Road, Kolkata - 700 001, West Bengal. 6. The scope of the present Appeals is restricted to the limited role of the appellant before us, namely, Shri Vikash Kumar, as alleged, in the impugned offence and as to whether the same warrants imposition of penalty on him under Section 112(a) and (b) of the Customs Act, 1962 as ordered by the lower authorities in these cases, or not. 7. At the outset, it has been explained by the Ld. Counsel appearing on behalf of the appellant that the impugned orders have alleged the connection of the appellant in the instant case solely based on the following: - (a) Statement of a private person Shri Raghav Kumar Jha recorded by SIB, ACC, Kolkata, dated 06.11.2017 and 07.11.2017 linking the appellant with one Md. Salim, alleged co Director of M/s. Shabana Travels, who u....
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....y material particular in the transaction of any businesses for the Act. There is also nothing on record to show that the appellant was in any manner concerned with import of any goods at ACC, Kolkata. Since above ingredients, which are essential for imposing penalty under Section 112 (a) are absent in this case, the appellant is not liable for penal action under Section 112 (a) of the Act. (v) Further as per record of the Revenue the Appellant did not do any act of omissions, or abetment relating to any goods which are liable for confiscation under Section 111 of the Act. Hence, the provisions of section 112 (a) of the Act are not applicable to implicate the Appellant, in the instant case. (vi) It is a matter of fact that in the absence of the so-called statement of Sh. Raghav Kumar Jha dated 06.11.2017 & 07.11.2017 and so-called alleged recovery / seizure of any such bag of Sh. Kislay from M/s Shabana Travels dated 06.112017, the appellant is no-where in the picture of the instant case. (vii) According to Rule-of-Law it was the responsibility of Revenue to prove their narration of the story of crime against the appellant, which they failed to fulfil, by ....
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....a, who are alleged to be involved in clandestine removal of goods from import shed. (xi) Order No. 03/2017 dated 18.08.2017 under Section 110(1) of the Customs Act, 1962 of Shri Vishal Kumar, Appraiser of Customs, SIB (Airport) has been referred to by the appellant stating that on 06.09.2017 the same SIB officer of ACC, Kolkata, Sh. Vishal Kumar, Appraiser, again for the 2nd. time examined the already seized goods of August 2017 like UPSs containing smuggled gold, which was earlier seized and left with the Air Port Authority staff at ACC, that too, without putting any seal and drawing any Panchanama on 06.09.2017, which clearly exposed the specious conduct of that SIB officer, Sh. Vishal Kumar. (xii) Seizure documents of AWB No.17656233004 dated 18.08.2017 on UPSs containing gold disclosed gross weight as 241.5 kgs, but the same consignment containing smuggled gold was recorded as 231.0 kgs on 06.09.2017. This raises serious question on seizing officer, his reports and the record of Adjudication which is silent on such differential weight of 1.5 kg. (xiii) The appellant submits that the disputed action of Revenue is as follows: - * August 2017 SI....
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....656233004 from where smuggled gold was recovered, discloses that said consignment was seized twice by Sh. Vishal Kumar, Appraiser first on 18.08.2017 and 2nd. time on 06.09.2017, wherein no Panchanama was drawn on 06.09.2017; scanning & weighment report of such package is suppressed. Then, for the reason best known, the same consignment was examined again by Sh. Amit Kumar Yadav, SIB Officer on 22.11.2017 who searched two UPSs from same AWB No. 17656233004 and seized 10 kgs. of smuggled gold u/s 110 of the Customs Act, the UPSs which were already seized two times on 18.08.2017 and 06.09.2017 by Sh. Vishal Kumar, Appraiser of same SIB, ACC, Kolkata. That such act of the SIB officers is un-known to law and suspicious. (xvii) That referring to non-tested statement of Raghav Jha and imaginary bag of Sh. Kislay, Revenue issued SCN No. 06/2022 dated 29.03.2022 on twenty-six (26) consignments allegedly cleared with the same/similar modus operandi during 01.04.2017 to 04.08.2017 and the appellant was penalized, because of his alleged link with Md. Salim and with M/s Shabana Travels (P) Ltd, which they failed to prove in the process of adjudication. 8.1. Without prejudice to the....
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....the Act, as held in the impugned order. Hence, the SCNs, in as much as they propose imposition on penalty on the appellant, are bad in law. i. For that, the smuggled gold kept inside UPSs imported under AWB No. 17656233004 (IGM No. 1200879) was seized three times under Customs Act, 1962, by said SIB officers, 1st. on 18.08.2017, 2nd. on 06.09.2017 and 3rd. on 22.11.2017 which is un-known to law. Hence investigation report submitted by such officers amounts to 'Malice in Law' and therefore cannot be used against the Appellant in support of the penal action. j. For that, it may be noted that new IRS officers are initially posted in field formations to gain experience of work and here, before the appellant could even get posting experience of any Land Customs Station (LCS) & Air Cargo Complex (ACC), he got his life's bitterest experience when implicated in the instant case without any evidence. k. For that, it is unbecoming on the part of the SIB officers like Sh. Vishal Kumar, who did not remove the seized property of Revenue for safe custody and did not draw any Panchanama on 06.09.2017 for seizure of consignment of AWB No. 17656233004 from which g....
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....ver happened in the present case. As such, the statements cannot be used against the appellant herein for any penal action." Thus, if the statements of the said witness Raghav Kumar Jha are taken out of record, there shall be nothing in the present case for imposition of any penalty upon the present Appellant. s. The Customs Act, 1962, is a comprehensive legislation that governs the import and export of goods in India, safeguarding the country's trade policies and revenue interests. Sections 138B of the Act pertain specifically admissibility of statements / documents in proceedings related to customs violations. Compliance with these provisions is crucial to ensure fair investigation, and adjudication of Customs cases. Thus, attention is invited to Sections 138B, on their compliance requirements, their role in investigation and adjudication. t. Section 138B of the Customs Act deals with the admissibility of statements made during the course of investigations in customs proceedings. It allows for the inclusion of any statement made by a person before a customs officer during an investigation, provided certain conditions are met. Section 138B ensures, s....
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....d with the case at any point of time either in case of the 05 AWBs of live consignments or the 26 AWBs relating to the consignments cleared during the period from April 2017 to August 2017 by justifying imposition of penalty on the appellant. 8.2. In view of the above submissions, the appellant prays for quashing the penalties imposed upon him under Section 112(a) and (b) of the Customs Act, 1962 vide the impugned orders, being unjust, arbitrary and bad in law. 9. On the other hand, the Ld. Authorized Representatives of the Revenue appears before us have justified the order of imposition of penalty on the appellant. It is the contention of the Revenue that from the from the statement of Shri Raghav Jha, it is clear that the appellant was a close associate of Md. Salim, who was the carrier of smuggled goods as staff of M/s. Shabana Travels and providing godown for storage of such goods which were clandestinely removed from ACC, Kolkata. It is also argued by the Ld. Departmental Representatives that the fact that the SIB, ACC, upon search of the premises of M/s. Shabana Travels on 06.11.2017 found one bag with personal documents of Kislay, Inspector/co-noticee, which was also f....
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....xcise living near Rajarhat in Green Elements Building was a close associate of Md. Salim, who was found to be carrier of smuggled goods & providing godown for storage of the smuggled goods from ACC in the instant case." 12.2. From the above, it is evident that the appellant has been implicated in the offence and indicted, as a co-noticee to the Show Cause Notice, on the basis of the statement given by Shri Raghav Jha, saying that "a Deputy Commissioner of Customs and Central Excise living near Rajarhat in Green Elements Building was a close associate of Md. Salim", who is alleged to be a person involved in this case as the carrier of smuggled goods and providing godown for storage of the same. 12.3. It is imperative to mention that Shri Raghav Jha, in his statement referred to above, has not specifically named the appellant herein or his link therein in the alleged offence. 12.4. It is on record that the alleged statement of Shri Raghav Jha has not been relied upon by the ld. adjudicating authority in the impugned order. For the sake of ready reference, the said observation recorded by the ld. adjudicating authority at paragraph 75.7.3 of the impugned Order-in-Original No.....
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....angir and no such Panchanama could be found. For better appreciation of the facts, the inspected document as prepared on the date of inspection, is scanned and reproduced below: - 13.4. The document extracted hereinabove also goes on to show that there is no evidence available on record to prove the role of the appellant herein in the alleged offence of smuggling of 10 kgs. of gold. 13.5. We also find force in the contention of the appellant that, but for the statements dated 06.11.2017 and 07.11.2017 of Shri Raghav Kumar Jha and the alleged recovery/seizure of a bag purportedly belonging to Shri Kislay from the premises of M/s. Shabana Travels on 06.11.2017, the appellant does not figure anywhere in the entire investigation. Except for the aforesaid allegations, no independent material has been brought on record to connect the appellant with the alleged acts of smuggling. 13.6. It is a settled proposition of law that the burden lies upon the Revenue to establish the allegations levelled in the Show Cause Notice through cogent and admissible evidence. In the present case, we find that the Revenue has failed to produce Shri Raghav Kumar Jha for cross-examination in terms of....
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....ctivity. The ld. adjudicating authority at paragraph 75.9 of the Order-in-Original No. KOL/CUS/A&A/Pr. COMMISSIONER/ADJN/12/2025 dated 25.06.2025, has adopted identical findings as to the role of the appellant herein, as in the case of the 5 live consignments, for the purpose of imposition of penalty under Section 112(a) and (b) ibid. 14.1. It is seen that the subsequent Show Cause Notice No. 06/2022 dated 29.03.2022 pertaining to these twenty-six consignments allegedly cleared during the period 01.04.2017 to 04.08.2017 has also proceeded substantially on the basis of the aforesaid statements and the alleged recovery of the said bag. The appellant has been sought to be implicated primarily on account of his alleged acquaintance with Md. Salim and M/s. Shabana Travels (P) Ltd. However, the Revenue has failed to establish any direct or indirect nexus of the appellant with the alleged smuggling activities through any legally admissible evidence during the course of adjudication. 14.2. In view of our detailed findings in the preceding paragraphs of this order, we do not concur with the conclusion arrived at by the ld. adjudicating authority in the above order for the purpose of i....
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....ed by Act 36 of 1973, Section 3 (w.e.f. 1.9.1973).] (iv) In the case of goods falling both under clauses (i) and (iii), to a penalty [not exceeding the difference between the declared value and the value thereof or five thousand rupees],[whichever is the highest; [Inserted by Act 36 of 1973, Section 3 (w.e.f. 1.9.1973).] (v) In the case of goods falling both under clauses (ii) and (iii), to a penalty [not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees], [whichever is the highest.] [Inserted by Act 36 of 1973, Section 3 (w.e.f. 1.9.1973)]" 15.1. We find that penalties have been imposed upon the appellant under Sections 112(a) and 112(b) of the Customs Act, 1962 on the allegation that the appellant had knowingly concerned himself with the alleged smuggling activity involving foreign-origin gold. However, on careful scrutiny of the records, we find that no cogent or independent evidence has been brought on record to establish the involvement of the appellant in the alleged act of smuggling or in any activity connected with the improper importation, possession, transpor....
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....ugh tangible and convincing evidence. In the present case, we find that the investigation has failed to establish any direct or indirect nexus between the appellant and the alleged smuggling syndicate. No recovery of smuggled gold or incriminating documents has been effected from the appellant. No evidence relating to financial transactions, communication records, movement of goods, facilitation of transport, or sharing of proceeds has been brought on record to connect the appellant with the alleged illegal activity. The findings in the impugned order appear to be founded largely on assumptions and presumptions without any substantive corroboration. 15.5. It is trite law that suspicion, however grave, cannot take the place of legal proof. Penal provisions, particularly those carrying civil consequences under the Customs Act, are required to be construed strictly, and the burden lies upon the Revenue to establish the role of the appellant through reliable and admissible evidence. In the absence of any such evidence establishing conscious involvement or abetment, the penal provisions of Sections 112(a) and 112(b) cannot be invoked against the appellant merely on the basis of conje....