CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH – COURT NO. I CUSTOMS APPEAL NO. 335 OF 2006 (Arising out of Order-in-Original No. 8/06 dated 31.01.2006 passed by the Commissioner of Customs, ICD, Tughlakabad, New Delhi)

Sh. Deept Swarup Aggarwal …..Appellant

10/2, Sarvapriya Vihar, New Delhi VERSUS Commissioner of Customs, .....Respondent ICD, Tughlakabad New Delhi APPEARANCE:

Shri Naveen Malhotra and Shri Ritvik Malhotra, Advocates for the Appellant Shri Rajesh Singh, Authorized Representative for the Respondent CORAM: HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)

DATE OF HEARING: 30.05.2025 DATE OF DECISION: 06.06.2025 FINAL ORDER NO. 50859/2025 JUSTICE DILIP GUPTA:

Deept Swarup Aggarwal¹ has filed this appeal to assail the order dated 31.01.2006 passed by the Commissioner of Customs, ICD, Tughlakabad, New Delhi² in so far as it imposes penalty of Rs. 20 lakhs upon him under sections 114 and 112 of the Customs Act, 1962³

2. Intelligence was received by the department that M/s. Sundram Export Pvt. Ltd.⁴ and M/s. Netcompware Pvt. Ltd.⁵ had exported CD-ROMs under Duty Entitlement Pass Book⁶ Scheme by grossly overvaluing it with

1. the appellant

2. the Commissioner

3. the Customs Act 4. Sundram Export

5. Netcompware

6. DEPB an intention to wrongly avail DEPB scrips and thereby evade customs duty. Enquiries were, therefore, initiated by the Directorate of Revenue Intelligence⁷. Statement of various persons, including the appellant, were recorded and ultimately a show cause notice dated 04.12.2000 was issued to 26 persons including the appellant.

3. The case setup by the department in the show cause notice is that Sundram Export exported 96,800 pieces of CD-ROMs at highly inflated Freight on Board⁸ value of US 19$ per piece. Another exporter, by name of Netcompware, also exported a consignment of 40,000 pieces of CD- ROMs at overvalued price of US 19$ per piece. The 5 shipping bills covering the above exports were filed under the DEPB Scheme. According to the department, the overvalued export was used by the exporter to fraudulently procure DEPB scrips from the Directorate General of Foreign Trade⁹ and subsequently these DEPB scrips were sold in the open market and were thereafter used by companies to import goods without payment of duty. It is also the case of the department that the 40,000 CD-ROMs exported by Netcompware to Hong Kong were subsequently re-imported and cleared by M/s. Arvind International¹⁰ under a Bill of Entry dated 08.09.1998. It is said that the appellant was involved in the export of CD- ROMs and availment of DEPB scrips by Sundram Exports and Netcompware.

4. The impugned order imposes a penalty of Rs. 20 lakhs upon the appellant under sections 114 and 112 of the Customs Act. The relevant portion of impugned order, in so far as it deals with the appellant, is reproduced below:

7. DRI 8. FOB

9. DGFT

10. Arvind International “42(B) Shri Deept Sarup Aggarwal noticee no. 3, in his reply dated 09.07.01 submitted through his counsel Shri R.K. Handoo stated that he had no concern with M/s Sundram Exports Pvt. Ltd., and M/s Netcompware Pvt. Ltd.; that the exports have been made by Limited Companies having their legal entity; that the allegation against him was that he helped in the procurement of material which ultimately were exported; that he was neither an exporter nor the beneficiary as alleged, but a mediatory / broker in the procurement of the product of export, the pre-export activity cannot be made / alleged to have committed the alleged contravention of the Customs Act, that making the exports was one thing and helping in procuring the material for export was another thing; that similarly in the case of M/s Netcompware Pvt. Ltd. though the investigations show that he has nothing to do even remotely with said company just on the basis of statement of Shri Roampy Bhatia, the guilt was being fastened on him; that he was also being asked to pay duty in re