JUDGMENT :

G.S. Kulkarni, J.

1. This appeal under Section 130 of the Customs Act, 1962 (for short, “Customs Act”) is directed against the order dated 11 September, 2023 passed on the appellant’s appeal filed before the Customs, Excise & Service Tax Appellate Authority, Mumbai (for short “the tribunal”), which has been rejected by the impugned order.

2. The appellant have raised the following questions of law:

“(a) Given that the goods were pilfered, whether, in the facts and circumstances of the case, Regulation 5(6) of the Handling of Cargo in Customs Area Regulations, 2009, entitles the Respondent to recover the value of the lost goods from the Appellant?

(b) Whether, in the facts and circumstances of the case, penalty can be imposed on the Appellant under Regulation 12(8) of the Handling of Cargo in Customs Area Regulations, 2009?

(c) Whether, in the facts and circumstances of the case, penalty can be imposed on the Appellant under Section 117 of the Customs Act, 1962?

(d) Whether, in the facts and circumstances of the case, the impugned order was correct in imposing penalty on the Appellant under Regulation 12(8) of the HCCAR and Section 117 of the Customs Act, 1962, simultaneously for the same contravention?”

3. The facts relevant for the adjudication of this appeal are as follows:-

The appellant is a Public Sector Undertaking, having Container Freight Stations (for short “CFS”) at different locations in India. It is stated to have presence at all the major ports. The present proceedings concern the appellant’s CFS at Dronagiri Rail Terminal, which is close to the Jawaharlal Nehru Port Trust (for short, “JNPT”).

4. It is not in dispute that the appellant’s CFS is governed by the provisions of the Handling of Cargo in Customs Areas Regulations, 2009 (for short, “2009 Regulations”). Under these regulations, the appellant is recognized as a “Customs Cargo Service Provider” (for short, “CCSP”) for which a licence was issued to the appellant, which was renewed from time to time. The latest approval of the licence period was notified by Public Notice No. 134 of 2020 dated 14 October, 2020, for a period of five years with effect from 15 March, 2020.

5. Having noted the statutory recognition of the appellant’s CFS, we now proceed to refer to the facts, in relation to which an order on the show cause notice came to be passed against the appellant by the Commissioner of Customs, leading to appellant’s appeal before the tribunal and the consequent order passed by the tribunal on the appellant’s appeal.

6. A Shipping Bill No. 5807023 dated 05 June, 2013 was filed by an exporter namely M/s. Krish Exports, Mumbai before the Commissioner of Customs, JNPT for export of “household articles of stainless steel, SS Utensils” to Hong Kong, in a factory stuffed container GESU-3997518. Such container was given “Let Export Order” (LEO) from the appellant’s CFS.

7. A Special Intelligence and Investigation Branch (SIIB) of the Customs received specific information in regard to smuggling of “Red Sanders wood logs” stuffed into Container No. GESU-3997518. The said container was put on hold. Thereafter, the container was opened and a panchanama was drawn on 14 June, 2013 at the appellant’s CFS. It was revealed that as against the declared goods of 7454 kgs. of stainless steel household articles mentioned in the said shipping bill, the goods present in the container were 12695 kgs of ‘Red Sanders’, which were prohibited goods, as the export of Red Sanders was prohibited. Such prohibited goods attempted to be illegally exported, were seized under the provisions of the Customs Act and were stored in a sealed container, kept in the custody of the appellant’s CFS under a panchanama dated 14 June, 2013.

8. On 14 August, 2014, a surprise visit was conducted by the customs officials, at the premises of the appellant, when it was noticed that an empty container having unique No. XINU 1349960 was placed near another container, having customs seized goods, bearing an ident