Shri Sunil Aidasani @ Vicky Versus Principal Commissioner- Customs

CUSTOMS, EXCISE & SERVICE

 TAX APPELLATE TRIBUNAL NEW DELHI.

 

PRINCIPAL BENCH, COURT NO. I

Legal Robe 50144 OF 2020

[Arising out of the Order-in-Original No. 34/2019/M.K. Singh/Pr. Commr./ ICD-Import/TKD dated 30/10/2019 passed by the Principal Commissioner of Customs (Import), ICD, Tughlakabad, New Delhi.]

Shri Sunil Aidasani @ Vicky

Versus

Principal Commissioner

APPEARANCE:

 

Shri Akhil Krishan Maggu and Shri Vikas Sareen, Advocates for the appellant

Shri Shaikh Khader Rahman, Authorized Representative for the Department

WITH

Legal Robe 50194 OF 2020

[Arising out of the Order-in-Original No. 34/2019/M.K. Singh/Pr. Commr./ ICD-Import/TKD dated 30/10/2019 passed by the Principal Commissioner of Customs (Import), ICD, Tughlakabad, New Delhi.]

Shri Sushil Aggarwal,

Versus

Principal Commissioner

APPEARANCE:

 

Shri Pradeep Jain and Shri Sambhav Jain, Advocates for the appellant.

Shri Shaikh Khader Rahman, Authorized Representative for the Department

AND

Legal Robe 50899 OF 2020

[Arising out of the Order-in-Original No. 34/2019/M.K. Singh/Pr. Commr./ ICD-Import/TKD dated 30/10/2019 passed by the Principal Commissioner of Customs (Import), ICD, Tughlakabad, New Delhi.]

Shri Naveen Gulabani

Versus

Principal Commissioner

APPEARANCE:

Shri V R Sethi, Advocate for the appellant.

Shri Shaikh Khader Rahman, Authorized Representative for the Department

 

CORAM:

HON’BLE JUSTICE MR. DILIP GUPTA, PRESIDENT

HON’BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)

 

 

 

FINAL ORDER NO. 55702-55704/2024

DATE OF HEARING : 11.03.2024 DATE OF DECISION: 30.04.2024

 

P.V. SUBBA RAO

 

These three appeals assail the order in original dated 30.10.2019 passed by the Principal Commissioner in pursuance of the show cause notice dated 14.6.2019 issued by the Directorate General of Revenue Intelligence confiscating goods and imposing penalties. There were ten noticees in the  SCN  and  in the  impugned  order,  goods imported by noticees no. 1 to 5 were confiscated and penalties were imposed on them. Noticees no. 6 to 10 are persons on whom penalties were imposed of which noticee no. 8 Shri Sushil Aggarwal, noticee no. 9 Shri Sunil Aidasani and noticee no. 10 Shri Naveen Gulabani filed these three appeals. There are no appeals by others.

2. Therefore, the issue to be decided in these three appeals is the penalties imposed on them. Although each of these three appeals prayed for quashing of the impugned order, that prayer can only be taken as ‘insofar as it applies to that appellant’ because no appellant has either a reason to be aggrieved by that part of the order which affects some other noticee or has any locus standi to appeal on behalf of another
3. We have heard learned counsels for the appellants and learned authorised representative for the Revenue and perused the records.
4. The facts which lead to the present appeal are that DRI received intelligence that some goods whose import is restricted, such as fire crackers and some high value items such as glass chattons were smuggled into India concealing them in containers of some other cargo. Acting on this intelligence, DRI officers examined the cargo imported in 19 containers under a Panchnama and recovered 31 MT of fire crackers(whose  import  is  restricted),  170  MT  of  glass Chattons, industrial needles, fabrics, cosmetics, etc. which were not declared in the Bills of Lading.

5. It was found that these goods were imported in the name of five firms. These five firms had obtained importer exporter codes⁴ and they were all owned by Shri Inder Preet Singh Bhalla and Shri Manish Kumar . These five firms are noticees no. 1 to 5 in the SCN and Shri Bhalla is noticee no. 6 and Shri Manish is noticee no. 7 in the SCN. There are no appeals by any of these seven before us against the confiscation of goods or imposition of penalties.
6. Customs Appeal No. 50144 of 2020 is filed by Shri Sunil Aidasani @ Vicky aggrieved by the penalty of Rs.1,00,00,000/- under Section 112 (a) & (b) and penalty of Rs. 50,00,000/- under section 114AA of the Customs Act, 1962  imposed on him.
7. Customs Appeal No. 50144 OF 2020 is filed by Shri Sushil Agarwal aggrieved by the penalty of 2,00,00,000/- under Section 112 (a) & (b) and penalty of Rs. 1,00,00,000/- under section 114AA of the Act imposed on him.
8. Customs Appeal No. 50899OF 2020 is filed by Shri Naveen Gulabani aggrieved by the penalty of Rs.20,00,000/- under Section 112 (a) & (b) and penalty of Rs. 10,00,000/- under section 114AA of the Act imposed on him.

Submissions on behalf of Sunil Aidasani@Vicky

 

9. Shri Akhil Kishan Maggu and Shri Vikas Sareen made the following submissions on behalf of Aidasani.
   • Aidasani is  aggrieved  by  the  penalty  of  1,00,00,000/- under section 112 (a) and (b) and Rs. 50,00,000/- under section 114AA imposed on him.

• The allegation in the SCN is that he was the owner of M/s. S S Enterprises, the overseas supplier of the seized goods and that he had not responded to summons and had not cooperated with the investigation.
• The alleged involvement of Aidasani was only on the basis of the statements of Aggarwal, Bhalla and Shri Brijendu Kumar of M/s. Innovative Cargo Services.
• Aidasani resides in China and has been working as a sourcing agent in China and has been working in a China company called S S Import & Export Company Ltd.
• No summons were ever served upon Aidasani although the SCN and OIO were served.
• The OIO was passed based on retracted statements of co-accused Bhalla. These statements had no corroborative evidence and hence cannot be taken on record. The statements were also retracted.
• Cross examination of witnesses and co-accused were denied to the Aidasani which violated the principles of natural justice.
• A letter had been written by Aidasani to DRI stating that the goods imported by Bhalla Enterprises, KM Enterprises and Preet Enterprises did not belong to him. This letter was not made a relied upon document.
• The appellant had no way of knowing that there was alleged misuse of import as the appellant was only the sourcing agent.

 

Submissions on behalf of Sushil Aggarwal

 

10. Shri Pradeep Jain and Shri Sambhav Jain, learned counsels made the following submissions on behalf of Shri Aggarwal:
    • The statement of Shri Sunil Kumar, CHA dated 1.7.2015 only indicates that Aggarwal had made the CHA and Bhalla meet for the business and all relevant documents were provided by Bhalla and Manish to the

• The statement of Shri Sunil Kumar CHA dated 21.7.2015 states that Aggarwal did some jobs on random basis with respect to the goods and it does not say that he was the owner of the goods or the beneficiary. Aggarwal was following the orders of Bhalla.
• Statement dated 10.2015 of Shri Rakesh Kumar Karn, Director of M/s. Seimpex Logistics, Pvt. Ltd. states that Aggarwal had enquired about the status of the goods and it does not prove that he was the beneficiary or that he was aware that any illegal act was committed. He also said that Aggarwal came into picture from April 2014 and before that Manish himself was doing the business.
• Aggarwal was not allowed to cross examine the co- noticees on the ground that cross-examination was not a matter of right.
• Penalty under section 112 (a) &(b) and section 114AA are not imposable on the appellant.

Submissions on behalf of Naveen Gulabani

11. Shri V R Sethi, learned counsel made the following submissions on behalf of Shri Naveen Gulabani
    • By the impugned order, the Principal Commissioner imposed penalty of Rs. 20 Lakhs under section 12 (a) (b) and penalty of Rs. 10 lakhs under section 114AA on Shri

• Shri Gulabani is a trader of miscellaneous household items in Delhi. He learnt about the alleged imports only when he received a copy of the SCN.
• The allegation against Shri Gulabani in the SCN is that he was an employee of Shri Sunil Aidasani @Vicky, the owner of M/s. S S Import &Export Co. Ltd. which was the overseas supplier of the goods which have been seized. Summons had been issued to Shri Gulabani but he did not appear to give his statements. Thus, he did not cooperate with the investigation.
• Therefore, the SCN proposed to impose penalty on Shri Gulabani under section 112(a) &(b) and section
• The Principal Commissioner imposed a penalty
• Neither section 112 nor section 114 provides for penalty to a person for not responding to  There is no evidence of any violation under section 112 or 114AA by Shri Gulabani which may attract penalty under these sections.
• Shri Gulabani was never the employee of Shri Sunil Aidasani @ Vicky and he had nothing to do with the sale of the disputed goods.

 

 

• The appeal may be allowed and the penalties imposed on Shri Gulabani may be set aside.

Submissions on behalf of the Revenue

 

12. Shri S K Rahman, learned authorised representative for the Revenue made the following submissions:
    • Sushil Aggarwal admitted that he was the indentor, and used to take the buyers to the sellers in China and after the orders are placed by the buyers, he would get some commission.
    • After orders were placed, he would receive the original Bill of Lading from Bhalla by hand or through courier and give it to the CHA for getting the delivery order and for getting the goods cleared.
    • He handled the goods imported by the five firms controlled by Bhalla.
    • He also used to keep track of the containers and had accompanied Manish to Sitapur for unloading the
    • Thus, Shri Sushil Aggarwal was not merely an indenting agent but was actively involved at all stages of the import viz., procurement, concealment, transportation, customs clearance and delivery of the goods for monetary gain.

• Shri Manish Kumar would thereafter distribute the goods as per the directions of either Bhalla or Sushil Aggarwal and collect money for the goods sold.
• Thereafter, Sushil Aggarwal would collect money from Manish and distribute it to the CHA and others.
• These details emerged from his voluntary statements made on 14.10.2015 and 23.11.2015.
• Cross examination sought by Shri Sushil Aggarwal was not allowed because the allegations against him were based on his own admissions. What is admitted need not be proved.
• As far as Sunil Adiasani is concerned, he was the sourcing agent in China working for SS Import & Export
• He had not appeared despite issuing several summons. However, he submitted his reply to the SCN which was considered by the adjudicating authority.
• Aidasani sought cross-examination of the persons who made the statements but these were declined giving reasons by the Principal Commissioner.
• The appeal of Aidasani may be rejected and the impugned order may be upheld.

 

 

• Shri Naveen Gulabani had not appeared before the officers despite issuing multiple summons. However, he submitted a written reply to the SCN and thereafter, the Principal Commissioner passed the impugned order. The penalties imposed on Shri Gulabani need no interference.

Findings

13. We have considered the submissions on both sides and perused the records. Penalties have been imposed under sections 112(a) & (b) and 114AA of the Act which are assailed by the three appellants. These sections read as follows:
14. Penalty for improper importation of goods, etc.— Any person,—
    • who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or
    • who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable,—

(i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater;

*****”

114AA. Penalty for use of false and incorrect material—

If a person knowingly or intentionally 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 this Act, shall be liable to a penalty not exceeding five times the value of goods.

14. Thus, penalty under 112(a) can be imposed if the person does or omits to do something which renders the goods liable to confiscation under section 111.
15. Penalty under 112(b) can be imposed if the person acquires possession of or is in anyway concerned in carrying, removing, depositing, etc. of the goods which he knows or has reason to believe are liable to confiscation under section 111.
16. Penalty under section 114AA can be imposed if the person has knowingly or intentionally makes or signs or causes to be made or signed any statement or document which is false or incorrect.
17. Sushil Aggarwal: Admittedly, he was the indentor in China and would connect buyers from India and the sellers from China and when the deal is struck, he would receive commission for his services.
18. However, as his statements indicate, his role does not end with placing orders. After the goods have been shipped, he would collect the Bills of Lading from Bhalla and give them to the CHA to get the goods cleared and further to get the delivery order and obtain the goods from the Shipping line. Evidently, as the person who placed the orders and got the goods shipped, Sushil Aggarwal must be fully aware of what was actually bought and what was mentioned in the Bills of Lading and that prohibited goods were bought and shipped but were not declared in the Bill of Lading.

19. The role which he played did not end there. He would follow up the movement of the containers and after they have been cleared, he had even accompanied the goods upto the godown of the importer at Sitapur where Manish would take over and distribute the goods to the buyers. Manish would distribute them either on instructions of Bhalla or on the instructions of Sushil Aggarwal.
20. After Manish had sold the goods, Sushil Aggarwal would collect the sale proceeds and distribute them to the CHA, Bhalla and others.
21. We have no doubts in our minds that the SushilAggarwal was not merely an indenting agent but was an active player involved at every stage in the entire operation from placing orders for the imported goods including the import of the prohibited goods, mis-declaration in the documents, clearance of the goods, transporting them to the godown and selling them, receiving the sale proceeds and further distributing them among various operators.
22. We find the penalties imposed on him under Section 112 and114AA must be sustained and they call for no interference.

Sunil Aidasani

 

23. The allegations against Aidasani are that he was the supplier of the seized goods, that 12 of the 19 containers actually belonged to him and that he had not responded nor given his statements despite repeated summons.
24. Aidasani denies being the owner of the goods but he admits to working for S S Imports & Exports Ltd. which had sold the goods to the importers. According to him, he was the sourcing agent working in China.
25. He claims to have never received the summons and hence he had not appeared to give his statements.
26. As far as the allegations that 12 of the 19 containers actually belonged to him are concerned, these are based on the statements of Bhalla. A statement made by Bhalla under section 108 of the Customs Act will be relevant to prove the case only as per section 138B. This requires the adjudicating authority to examine the person making the statement and decide if it is to be admitted in evidence. Needless to say thatif it is admitted in evidence and is proposed to be used against another person, such person should be allowed to cross examine the person making the statement.
27. Since the procedure prescribed under section 138B was not followed, the statement is not relevant to prove the case against Aidasani.
28. We also find that neither section 112 nor section 114AA provide for penalty for not responding to summons or not cooperating with the investigation.
29. Therefore, the penalties imposed on Aidasani in the impugned order cannot be sustained and need to be set aside.

Naveen Gulabani

 

30. As far as Naveen Gulabani is concerned, the allegation in the SCN is that he is an employee of Sunil Aidasani@ Vickyand that he had not responded to the summons and had not cooperated with the investigation.
31. According to Gulabani, he was never the employee of Sunil Aidasani@ Vicky- the alleged overseas supplier of the
32. We find neither section 112 nor section 114AA makes one liable to penalty either for being an employee of the overseas supplier of goods nor for not responding to summons and not cooperating with the investigating agency. Therefore, the penalties imposed on Gulabani cannot be sustained and need to be set aside and we do so.
33. Therefore, the penalties imposed on Gulabani in the impugned order cannot be sustained and need to be set aside.
34. Inview of the above:

 

• Customs Appeal No. 50194 of 2020 filed by Sushil Aggarwal is dismissed and the impugned order is upheld qua Sushil Aggarwal.
• Customs Appeal No. 50144 of 2020 filed by Sunil Aidasani is allowed and the penalties imposed onhim in the impugned order are set aside with consequential relief to Aidasani.
• Customs Appeal No. 50899 of 2020 filed by Naveen Gulabani is allowed and the penalties imposed on him in the impugned order are set aside with consequential relief to Gulabani.

 

(Order pronounced in open court on 30/04/2024.)

 

(JUSTICE DILIP GUPTA)

PRESIDENT

 

(P.V. SUBBA RAO) MEMBER (TECHNICAL)