Penal action under the Customs Act, 1962 requires concrete, corroborated direct evidence of involvement or mens rea; suspicion or circumstantial indicators are insufficient to sustain penalties for alleged collusion in fraudulent exports.

FINAL ORDER NO.75531-75532/2026

DATE OF HEARING : 25.03.2026

DATE OF DECISION : 21.04.2026

Per : RAJEEV TANDON :

The aforesaid two appeals have been filed by Shri Kausik Nundy of M/s. SSS Sai Forwarders (a Customs Broker).

2. The two appeals though concerning two separate show cause notices and adjudication/appellate orders passed in the matter, involve a common question of law and are against the same appellant and hence are taken up for decision by way of a common order.

3. The facts of the case are that the appellant was issued two show cause notices bearing Nos.S-2422020 SIIB (Port) dated 25.11.2020 and S-243/2020/SIIB(Port) dated 25.11.2020 charging him with alleged fraudulent export carried out by one M/s. Asian Enterprises vide Shipping Bill dated 11.06.2019 and M/s. Sai Trading vide Shipping Bills dated 10.06.2019 and 12.06.2019. The two show cause notices assert that the aforesaid exporting firms were key players who along with the present appellant „connived to clear highly over-valued export consignment for fraudulent availment of IGST Refund‟. The key charge against the appellant is that M/s. SSS Sai Forwarders of which the appellant herein is the proprietor provided the contact and documents related to exports made by the aforesaid firms to M/s. Advent Shipping Agency, the authorized Customs Broker, in these overvalued attempted exports. It is the Revenue‟s charge that the employees of the appellant firm were actively involved in facilitating the export by the said two firms. It is for this reason that penalties under section 114((iii) and 114AA of the Customs Act have been imposed on the appellant in each of the two matters and upheld by the Ld.Commissioner(Appeals). Aggrieved by the aforesaid orders of the lower authority the appellant herein is in appeal before us.

4. The Ld.Counsel for the appellant(s) submits that for the very cause of action, the Customs Broker licence of the appellant was also suspended and whereupon pursuant to the enquiry conducted, the same was restored and the suspension revoked. However, he was subjected to penalty for which separate proceedings were drawn before the appellate authorities.

5. Reverting back to the present matter, it is the case of the appellant that he had no involvement in the aforesaid shipments and least of all was not even the Customs Broker for the said attempted exports. Having no nexus with the export consignment of over-valued goods booked by the authorities, it is his case that levy of penalty upon them as aforestated is arbitrary and uncalled for. It is vehemently submitted before us by the Ld.Counsel that none of the persons who handled the said consignments were the employees of the appellant firm at the material time and that there has been no connection of the appellant or his firm with that of Shri Becharam Das, Partner of M/s. Advent Shipping Agency, the Customs Broker on record, for each of those two shipments. The Ld.Counsel therefore seeks complete exoneration from the proceedings initiated by the department against them in the matter.

6. The ld.AR for the Revenue however reiterates the findings of the lower authority and submits that the key conspirator in the said matter is one Sri Ramkrishna Kole, an erstwhile employee of the appellant‟s firm, who subsequently rejoined the appellant‟s firm after having resigned from M/s. Advent Shipping Agency.

7. Having heard the two sides, we find that there is nothing on record to expressly insinuate the appellant w