2026 (7) TMI 668

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....and Rs.50, 00,000/- under Section 114AA on the appellant. 2. The facts of the case are that investigation was conducted by the Directorate of Revenue Intelligence (DRI) regarding alleged diversion of imported Areca Nuts warehoused in KASEZ by M/s. Global Enterprises. The department was of the view that M/s. Global Enterprises had imported Areca Nuts in SEZ without payment of duty, with intention to divert the same into DTA, in the guise of SEZ to warehouse transfer, despite the fact that said goods were rejected by FSSAI and that the space availability certificate issued by CWC warehouse was invalid, having expired before clearance from SEZ. 2.1 The appellant was held liable to penalty by the Adjudicating Authority, who observed in th....

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....de to the extent of imposing penalty of Rs. One Crore on the appellant. 4. Learned AR fairly admitted during arguments that no Show Cause Notice was ever served upon the appellant nor even marked to him. However, he submitted that matter may be remanded to the Commissioner for re-adjudication. He has relied upon the law laid down in Tvl. Balaji Traders vs. The Deputy Commercial Tax Officer, Chidambaram-1, Cuddalore, Tamil Nadu reported at 2025 (2) TMI 1171 (MADRAS HIGH COURT) in which Hon'ble Madras High Court set-aside the impugned order for violation of principles of natural justice for not serving the Show Cause Notice upon the appellant effectively and remanded it for fresh reconsideration. 5. Learned Counsel for the appellant....

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....department to prove that the appellant has played any role in the alleged diversion of goods. None of the truck drivers, warehouse operators, importers or Custom Brokers have stated that the appellant instructed them or participated in any way in the alleged diversion. Therefore, without any credible and cogent evidence, no penalty could have been imposed against the appellant. 6.3 It is also pertinent to note here that the department has solely relied upon the statements recorded under Section 108 of the Customs Act but none of the statements relied upon by the department attribute any active role to the appellant. The department has also failed to establish mens rea on the part of the appellant therefore, the impugned order imposing pe....