CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH – COURT NO. I CUSTOMS APPEAL NO. 477 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)

Sulekh Chand Jain …..Appellant S/o Sh. Laxmi Narain Jain, R/o T-39, Budh Vihar, 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. 50857/2025 JUSTICE DILIP GUPTA:

Sulekh Chand 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. 2 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 involved in the withdrawal of cash from the Bank.

4. The impugned order imposes a penalty of Rs. 2 lakhs upon the appellant under section 114 of the Customs Act. The relevant portion of impugned order, in so far as it deals with the appellant, is reproduced below:

6. DEPB

7. DRI

8. FOB

9. DGFT

10. Arvind International

“42(D) Shri Sulekh Chand Jain in his reply dated 08.03.2001 submitted that allegations against him that he visited the State Bank of Bikaner and Jaipur to withdraw cash on self cheques in different names were wrong and he denied to have operated any account. In his further reply dated 9.10.2001, 22.05.2002, 17.07.2002, 24.10.2002, 14.11.2002, 12.12.2002, 9.02.2003, 14.02.2003, 21.02.2003, 05.02.04, 27.02.2004, 08.09.04, 10.11.04 he has stated that he was working for Shri Bimal Kumar Jain @ a meager salary of Rs. 4000/- per month; that Shri Bimal Kumar Jain had taken his signatures on few blank papers and he may use it to save himself; that he wishes to be present at the time of personal hearing on 18.12.02 but Shri Bimal Kumar Jain had instructed him not to appear and he may try to stop him to appear as earlier also he was sent to Kathmandu by his brother Shri Satpal Jain and reiterated in every reply that his statement that his statement given before DRI officers on 30.08.1999 was correct which may be relied upon. In the said statement dated 30.8.99 he admitted that he used to sign as S.C. Maha