TaxTMI 
2026 (11) TMI 22
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....vestigation was initiated by officers of DRI against M/s Kamala Exports on the allegation that they have got the Export Obligation Discharge Certificate issued by DGFT by filing bogus documents of deemed exports to M/s. Sai International and that it has failed to fulfill its export obligation and therefore Custom Duty was evaded by it. DRI Mumbai investigated the imports made by M/s Kamala Exports at Tuticorin Port and Nhava Sheva Ports also. 2.1. During the course of investigation, it was found that 13 consignments were imported by M/s Kamala exports at Kolkata Port during the period 2004-2005 and out of 13 consignments, 9 consignments were procured by it from the foreign supplier by itself and 4 consignments were imported by it after purchasing the title documents on high seas. Out of the 4 consignments which M/s Kamla Exports imported at Kolkata Port on high seas, three consignments were purchased by it from two companies namely Topsia Estate Private Limited and RK Impex Private Limited. Rajendra Jain (herein after referred as the appellant) was a Director of both the companies namely Topsia Estate Private Limited and RK Impex Private Limited. 2.2. During the course of inv....
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.... of the investigation, a show cause notice dated 9th February 2009, was issued wherein it was alleged that the imports made by M/s. Kamla Exports at Kolkata Port were done by the Appellant jointly and severally with others. The Notice mainly relied on the retracted statement made by one Mr. Shammi Chanana, wherein he alleged that he has sold one advance license of 50,000 sq. meter to one Mr Rajubhai. The investigaton officers presumed that Mr. Rajubhai mentioned by Mr. Shammi Channa was infact Rajendra Jain, the Appellant and interalia proposed to demand of customs duty jointly and severally from the Appellant and many others. The Notice also proposed imposition of penalty on the Appellant among many others. 2.5. On adjudication, the Ld. Commissioner has adjudicated the Notice and confirmed the customs duty of Rs.21760744.72 jointly and severally from the Appellant as well as from many others. He also imposed interalia a penalty of Rs.21760744 under section 112 (a) and Rs.2 Crore under section 114AA of the Customs Act on the Appellant. 2.6. Aggrieved against the demand of customs duty jointly and severally from him and against the imposition of penalties on him, the Appellant....
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....mpugned order that the appellant represented as importer or owner of the goods at any point of time. There is no link of the appellant with the goods. Merely on the basis of a retracted statement made of Mr. Chanana that he sold a license of 50,000 sq. meter to one Raju Bhai, no inference can be drawn that the appellant imported the goods. It is logically erroneous /fallacy. (vi) Mr. Bansi Badan Mandal, the Custom Broker who filed the Bills of Entry has stated that he was introduced with M/s Kamla Export through one Mr. Rajubhai, who was identified to be one Mr. Raju Mohta and not the appellant. Mr. Bansi Badan Mandal submitted statutory documents showing receipt of the goods in the statutory portal of M/s Kamla Exports which attracts statutory presumption of existence of situation which has neither been rebutted nor challenged in the show cause notice or in the impugned order. (vii) The Custom's Broker Mr. Bansi Badan Mandal made the statement that he dealt with the import in respect of advance licenses given to him by M/s. Kamala Export. He got the documents from M/s Kamla Exports. He stated that he has delivered the goods to M/s Kamla Exports. He obtained trans....
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....) There is no material that the appellant dealt with the goods or filed the bill of entry or made over any document in relation to the bill of entry to the Customs Broker, or he dealt with the goods in any manner whatsoever, and therefore, there could not have been a charge of penalty under section 112 (a) or (b) 114AA the Custom Act 1962. The show notice did not disclose any cause of action against the appellant on the basis of which demand of duty could be made against the appellant or any penalty could be imposed on the appellant. (xv) On the basis of the above submissions, the Appellant prayed for setting aside the demands of customs duty demanded jointly and severally from him and set aside the penalties imposed on him. 4. The Ld. Special counsel made the following submissions: (i) Duty-free imports of polyester fabrics were effected in the name of M/s. Kamla Exports at Kolkata Port under 13 Bills of Entry. Verification conducted by the officers of DRI revealed that the declared premises of M/s. Kamla Exports at Arthur Road Naka, Mumbai was a residential. Thus, the importing firm M/s. Kamla Exports was found to be fictitious. (ii) Statement of Shr....
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.... the imports made at Kolkata port jointly and severally from six persons, including Shri Rajendra Jain originated from the SCN. The notice must first be examined as a whole to ascertain whether it already pleads the facts necessary to make Shri Rajendra Jain the statutory importer and duty debtor for the identified consignments. He admitted that the decisions cited by the Appellant disfavour recovery of duty on a joint and several basis from persons not shown to be importers. However, in the present case the appellant is not such a stranger but the very person who procured the imports. Where more than one person answers the importer description in respect of the same goods, recovery from such persons has been upheld in the case of Sundaram Finance Ltd. v. Commissioner of Customs, CESTAT, order dated 02.03.2012). 4.2. In Danavarshini Exports (P) Ltd. v. Commissioner of Customs, Chennai-VII, Final Order Nos. 41502-41527/2025 dated 18.12.2025, the show-cause notice proposed recovering duty jointly and severally from the noticees, and the order-inoriginal confirmed that demand. The Tribunal considered the objection to a joint and several demand and set aside the OIO, remanding the m....
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....and on provisionally assessed bills of entry Section 28 was not applicable. Accordingly, they contended that the demand of duty under Section 28(4) of the Customs Act is erroneous. The adjudicating authority erred by holding that the declaration given in the bill of entry wrong and the goods could not held liable for confiscation under Section 111 (m) of the Customs Act. Section 111(o) of the Customs Act was also not applicable. The adjudicating authority demanded duty from the Appellants jointly and severally and imposed redemption fine and penalty jointly and severally which is contrary to law. We find merit in the arguments of the Appellants. There is no provision of demanding duty and imposing penalty jointly and severally from the Appellants. Accordingly, we hold that the demands are not sustainable on this count also. 6.1. In the case of Commissioner of Customs versus Virendra Hans Raj Gandhi reported in 155 ELT 128, it has been held that only the person chargeable with duty can be proceeded for realisation of demand of duty not high sea seller. In this case, we find that the bills of entry were filed by M/s Kamala exports. Duty liability was discharged by M/s. Kamla expor....
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....the matter to determine the actual person liable for the duty. He also cited the decision of R. Dewakar v. Commissioner of Customs (Seaport, Imports), Chennai, Final Order No. 41067/2026 dated 06.10.2026, wherein the Tribunal has set aside a joint-and-several recovery direction but fixes duty on the actual importer from the existing record, without remand. We find that the decisions cited by the Ld. Special Counsel are not applicable to the facts and circumstances of this case. In the present case, it is on record that the Appellant has not filed the Bills of Entry and paid the duty at the time of clearance. Hence, demand on account of short levy, if any, can be made only from the actual importer and not from the Appellant. Thus, the decision cited supra is not applicable to the facts and circumstances of this case. 6.4. Thus, we hold that the demand raised and confirmed in the impugned order jointly and severally from the Appellant is legally not sustainable. Hence, we hold that the demands of duty confirmed jointly and severally qua the Appellant and the penalties imposed on him are liable to be set aside on this ground itself. 7. Regarding the merits of the case, we find t....
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....has been made in the Show Cause Notice on the two companies who were said to have sold the goods on high sea sales basis to M/s. Kamla Exports. The Show Cause Notice was issued to the appellant, but the companies were not charged in the Show Cause Notice. The use or misuse of the license, if any, should have been done only by the Company and not by the Appellant. Thus, we find that the allegation of misuse of the License by the Appellant is not sustainable without establishing any charge against the companies. In any event, we find that the sale of license has no bearing with the import made at Kolkata Port unless it is proved that goods were released on the basis of such license. 7.3. We find that there is no evidence brought on record to establish that the Appellant was the actual importer of the goods. For treating a person "importer" of the goods it must be established that the said person has filed bills of entry for clearing the goods and he was the actual owner of the goods after it's clearance. In the present case, we find that there is no such charge or material brought on record either in the show cause notice or in the impugned order, which would constitute any cause ....