Penalties under Sections 114 and 114AA of the Customs Act, 1962 cannot be sustained based merely on presumptions of guilt or internal procedural lapses, particularly when the underlying acts do not constitute a specific offence and no evidence links the appellants to fraudulent documentation or illicit gain.

Headnote:(A) Customs Act, 1962 - Sections 113, 114, 114AA - Export of goods without RFID seal - Penalties imposed under Section 114 and 114AA based on assumptions and presumptions - Tribunal found that moving goods to ICD without RFID seal, while subject to RMS treatment, does not constitute an offence per se - Lack of evidence connecting appellants to alleged 'dummy' documents for claiming undue export benefits - Penalties cannot be sustained in absence of proof of fraudulent activity or connivance.

Facts of the case:
The appellants, freight forwarder and authorized representative, were penalized for allegedly arranging export of goods using fake/forged documents and containers without RFID seals. The Revenue alleged that goods were gated into the Customs area on the strength of false documents to avail undue export benefits. The appellants contended that the documentation process was routine and they had no involvement in forging documents.

Findings of Court:
The Court observed that the impugned order relied on presumptions of guilt without logical analysis of evidence. Moving goods to an ICD without an RFID seal is not an offence under the Act, as it invites subject-to-risk-management-parameters scrutiny rather than confiscation. The Revenue failed to demonstrate what undue benefits were sought or how the appellants gained therefrom. Furthermore, penalties against co-noticees responsible for generating the alleged dummy documents had already been set aside in a previous related order.

Issues: Whether penalty under Sections 114 and 114AA of the Customs Act, 1962 is sustainable against the freight forwarder and its representative for their role in the export clearance process.

Ratio Decidendi: Penalties cannot be imposed based on assumptions of illegal intent without concrete evidence linking the appellants to fraudulent documentation or proving the commission of an actual offence under the Customs Act. When the primary acts (such as moving goods) are not inherently offences, and no evidence exists for the alleged motive (undue benefits), the penalties are unsustainable.

Result: Appeals allowed.

SANJIV SRIVASTAVA:

These two appeals are directed against Order-in-Original No.12/PC/NOIDA/CUS/2024-25 dated 28/03/2025 passed by Commissioner of Customs, Noida. By the impugned order following has been held:-

“ORDER

(A) I order for confiscation of the subject goods pertaining to the fake Shipping Bill No. 1234567 dated 16.11.2018 viz. "Spare parts of Two-Wheeler" under Section 113(h) of the Customs Act, 1962. Since the said goods released provisionally after furnishing of Bond and have been allowed to be exported vide shipping bill no. 9070233 dated 22.11.2018, therefore, I impose redemption fine of Rs. 2,00,000/- (Rupees Two lakhs) under Section 125 of the Customs Act, 1962 on the exporter.

(ii) I impose a penalty of Rs1,00,000/- (Rupees One lakh) upon M/s Kunal International through its proprietor Shir Amit Goyal under Section 114 of the Customs Act, 1962 as the goods are liable for confiscation under section 113(h) of the Customs Act, 1962.

(iii) I also impose a penalty of Rs. 1,00,000/- (Rupees One lakh) under section 114AA of the Customs Act, 1962 upon M/s Kunal International through its proprietor Shri Amit Goyal for having prepared fake shipping bill in respect of goods to be exported; for having intention to avail undue export benefits,.

(B) I impose a penalty of Rs.2,50,000/- (Rupees Two lakhs and Fifty thousand) and Rs.2,50,000/- (Rupees Two lakhs and Fifty thousand) upon Shri Surya Prakash Saxena, authorized person of M/s Lucas Maritime under Section 114 and Section 114 AA of the Customs Act, 1962, respectively.

(C) I impose a penalty of Rs.2,50,000/- (Rupees Two lakhs and Fifty thousand) and Rs.2,50,000/- (Rupees Two lakhs and Fifty thousand) upon M/s Lucas Maritime under Section 114 and Section 114 AA of the Customs Act, 1962, respectively.

(D) I impose a penalty of Rs. 10,000/- (Rupees Ten Thousand) and Rs.2,50,000/- (Rupees Two lakhs and Fifty thousand) under Regulation 18 of the Customs Broker License Regulation, 2018 and Section 114 (iii) of the Customs Act, 1962, respectively upon Shri Vinod Kumar Dubey (G-card holder of M/s Star Carrier, Customs Broker).

(E) I impose a penalty of Rs.50,000/- (Rupees Fifty Thousand) AND Rs.2,50,000/- (Rupees Two lakhs and Fifty thousand) and Rs.2,50,000/-(Rupees Two lakhs and Fifty thousand) under Regulation 12(8) of the Handling of Cargo in Customs Area Regulations 2009, Section 114 AA and 117 of the Customs Act, 1962 against the Custodian M/s CONCOR CFS, ICD Dadri. I also impose a penalty of Rs.50,000/- (Rupees Fifty Thousand) under Section 158(2) of the Customs Act, 1962 upon them.

(F) I impose a penalty of Rs. 50,000/- (Rupees Fifty Thousand) upon Shri O. Sai Ram, Asstt. Manager (Commercial & Operation) of M/s CONCOR CPS, ICD Dadri under Section 114 AA of the Customs Act, 1962.

(G) I impose a penalty of Rs.50,000/- (Rupees Fifty Thousand) upon Shi Subodh Kumar, Asstt. Manager (Exim Cell) of M/s CONCOR CFS, ICD Dadri under Section 114 AA of the Customs Act, 1962.

(H) I impose a penalty of Rs.50,000/- (Rupees Fifty Thousand) and Rs.50,000/-(Rupees Fifty Thousand) AND Rs.5,000/- (Rupees Five Thousand) under Section 114 (iii) and Section 117 of the Customs Act, 1962 and under Regulation 18 of the Customs Act, 1962 respectively upon Shri Sashi Kumar (F card Holder of M/s Kiran Carrier, Customs Broker).”

2.1 During the visit of Concor shed, it was observed that the goods have been de-stuffed in the bonded warehouse of Concor shed and the container Nos. BMOU5791210 and SEGU5336240 were lying empty.

2.2 During the inspection of submitted Export application slip dated 16.11.2018, it was observed that the goods were gated in on 16.11.2018 in two containers bearing No. BMOU5791210 and SEGU5336240 in respect of Shipping Bill No.1234567 dated 16.11.2018 and the name of CHA was written as M/s Zen Cargo Logistics. It was also informed that the containers were not intact with RFID seal. On verification of the documents submitted for registration of goods, it was observ

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2026 Supreme(Online)(CESTAT) 1752

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNALSanjiv Srivastava, Member (Technical)Luas Maritime – AppellantVersusCommissioner of Customs, Noida – RespondentCustoms Appeal No.70108 of 2026 | Customs Appeal No.70109 of 2026

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Sanjiv Srivastava, Member (Technical)
Luas Maritime – Appellant
Versus
Commissioner of Customs, Noida – Respondent
Customs Appeal No.70108 of 2026 | Customs Appeal No.70109 of 2026