The court held that a quasi-judicial authority must address all cited precedents and evidence, as failing to do so violates natural justice. Furthermore, regulatory due diligence obligations for customs intermediaries do not require physical site verification, nor does valuation analysis fall within their professional domain.

Judgment :

Om Narayan Rai, J.

1. This writ petition under Article 226 of the Constitution of India assails an order in original dated July 22, 2025 passed by the Additional Commissioner of Customs (Export), Kolkata Customs (Port) Commissionerate whereby penalty to the tune of Rs.50 lakh (Rupees Fifty lakh) has been imposed upon the petitioner under Section 114(iii) of the Customs Act, 1962 (hereafter “the 1962 Act”).

FACTS OF THE CASE:

2. The relevant facts are as follows:-

a) One M/s KSH International, (hereafter “the exporter”) filed five Shipping Bills bearing Nos. 6946049, 6946061, 6946065, 6946071 & 6946075 all dated 23.01.2024 (hereafter “the said shipping bills”), through their authorised Custom Broker M/s Bose Enterprise, whereof the petitioner is a proprietor for exporting goods declared by the exporter as energy drinks. The said consignments were to be exported to one Balaji Food Stuff Trading LLC, UAE.

b) On January 29, 2024, the goods covered under the said shipping bills underwent 100% examination conducted by the Shed Officers stationed at the Transworld Terminals Private Limited Customs Freight Station (CFS), in the presence of officers from the Special Intelligence and Investigation Branch (Port), a representative of the Customs Freight Station (the custodian) and an authorized representative of the Customs Broker, as documented under the Panchanama dated January 29, 2024.

c) As the declared value of the goods appeared to be grossly inflated therefore based on the reasonable belief that the same were liable for confiscation under Section 113 of the 1962 Act, the goods were seized under Section 110(1) of the said Act on February 16, 2024.

d) Upon verification of the export documents and the data of the Indian Customs Electronic Data Interchange System (ICES) it was observed that the exporter had claimed total incentives of Rs.1,37,138.09/- (Rupees One lakh thirty-seven thousand one hundred thirty-eight rupees and nine paise only) comprising a drawback amount of Rs.31,647.09 (Rupees Thirty one thousand six hundred forty seven rupees and nine paise only) and Remission of Duties and Taxes on Exported Products (RoDTEP) to the tune of Rs.1,05,491/- (Rupees One lakh five thousand four hundred ninety one only).

e) Since there was stark disparity between the price printed on the goods and the value declared in the shipping bills, which cast doubts on the genuineness of the export consignments therefore a detailed investigation as regards the export consignments of M/s KSH International was initiated by the Customs.

f) On 100% examination of the relevant container the following aspects emerged:

i. There were two categories of drinks bottles. The first category comprised a total of 396 crates containing 9504 pink coloured 250 ml PET bottles labelled 'Quarter Energy Drink' with 'B.No. 26D23 P5, MFD- 26/12/2023, MRP…… (For Export Only)' printed on the neck of such bottles. The second category consisted of type 63936 red coloured 180ml PET bottles labelled as 'RoohAfza Red Rush' with “MFG: 22/11/2023, EXP: 21/05/2024, FOR EXPORT” printed on the neck of such bottles. Such bottles and the crates holding them were dirty, stained and scratched. Some creates had stickers