CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH – COURT NO. I CUSTOMS APPEAL NO. 338 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)

Bimal Kumar Jain …..Appellant S/o Sh. Abhay Ram Jain, R/o HD-50, Vishakha Enclave, Delhi Prop. M/s. Jain Enterprises, 17, Meera Tower, Wazirpur Community Centre, New Delhi – 110 052 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. 50858/2025 JUSTICE DILIP GUPTA:

Bimal Kumar Jain¹ 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. 25 lakhs upon him under section 114 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

1. the appellant

2. the Commissioner

3. the Customs Act 4. Sundram Export

5. Netcompware under Duty Entitlement Pass Book⁶ Scheme by grossly overvaluing it with 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 connected with Sundram Exports and had exported CD-ROMs by grossly overvaluing them to avail the benefit of DEPB scrips.

4. The impugned order imposes a penalty of Rs. 25 lakhs upon the appellant under section 114 of the Customs Act. The relevant portion of

6. DEPB

7. DRI 8. FOB

9. DGFT

10. Arvind International impugned order, in so far as it deals with the appellant, is reproduced below:

“(A) Shri Bimal Kumar Jain, Noticee no. 2, in his written reply dated 1-3-2001 and 02.04.2003, interalia, submitted that he denied each and every allegation leveled against him in the SCN; that SCN has not been issued by the proper authority; that neither he has any concern with M/s. Sundram Exports Pvt. Ltd. or with any other company as stated in the SCN nor he had exported any goods by grossly over valuing the goods in his individual capacity, to avail any DEPB benefit; that he had no concern with Shri Deept Sarup Aggarwal, Shri Rajesh Jain or Shri Rajesh Aggarwal, whose statement had been relied upon in SCN; that his statement was taken under duress and had been retracted by him when he was produced before ACMMP Patiala House. In the course of Personal Hearing held on 09.10.2001 the learned advocate Sh. Naveen Malhotra appearing for Shri Bimal Kumar Jain also deposed that the statement of Shri Bimal Kumar Jain was recorded und