CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH – COURT NO. I CUSTOMS APPEAL NO. 291 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)

Arjun Amla …..Appellant A-3, Hira Mahal, 44, Amrita Shergill Marg, Khan Market, New Delhi VERSUS Commissioner of Customs, .....Respondent ICD, Tughlakabad New Delhi APPEARANCE:

Shri Alekshendra Sharma, Advocate 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. 50855/2025 JUSTICE DILIP GUPTA:

Arjun Amla¹ 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. 10 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 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 by Netcompware and with the import of CD-ROMs by Arvind International.

4. The impugned order imposes a penalty of Rs. 10 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::

7. DRI 8. FOB

9. DGFT

10. Arvind International “42(I) Shri Arjun Amla denied all the allegations leveled against him in his written reply dated 24.04.2001 submitted through advocate Shri Rupesh Kumar and deposed that he had no connection with the export of CD-ROM’s by M/s. Netcompware Pvt. Ltd. or with the CD-ROM’s imported by M/s. Arvind International and no penalty is leviable on him under section 112 (a) & 114 (a) of the Customs Act. His contention of not having any concern with the activities of M/s. Netcompware Pvt. Ltd. is baseless as is evident from the following:-

(a) Shri Raminder Mohan Singh @Sunny Singh, in his statement recorded on 28.6.2000 stated that M/s Netcompware Pvt. Ltd. was floated by Shri Arjun Amla and Shri Sachdeva, the two directors of M/s. Govardhan India (P) Ltd. situated at Hira Mahal, Amrita Shergill Marg, New Delhi; that they floated this firm in the name of Shri Ashfaq Beig and Shri Anil Sethi who were working with them; that Shri Anil Sethi and Shri Ashfaq Beig were carrying out the order of Shri Arjun Amla and Shri Sanjay Sachdevan in respect of transactions of this firm; tha