A Mariappan vs COMMISSIONER OF CUSTOMS AIR CARGO-CHENNAI VII

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(CESTAT) 1817

CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL

CHENNAI

REGIONAL BENCH – COURT No. III

1. Customs Appeal No. 40309 of 2024

(Arising out of Order-in-Original No. 32/2024-AIR dated 03.02.2024 passed by Principal Commissioner of Customs (Air Cargo), New Custom House, Meenambakkam, Chennai – 600 016)

Mr. A. Mariappan ...Appellant

No. 51/54, Gokulam Flats,

State Bank Colony Main Road,

Nanganallur,

Chennai – 600 061.

Versus

Commissioner of Customs ...Respondent

Chennai VII Commissionerate,

New Custom House,

Meenambakkam,

Chennai – 600 016.

With

2. Customs Appeal No. 40310 of 2024 (M/s. BSM Logistics)

3. Customs Appeal No. 40323 of 2024 (Commr. of Customs, Chennai VII)

4. Customs Appeal No. 40329 of 2024 (Commr. of Customs, Chennai VII)

5. Customs Appeal No. 40330 of 2024 (Commr. of Customs, Chennai VII)

6. Customs Appeal No. 40331 of 2024 (Commr. of Customs, Chennai VII)

7. Customs Appeal No. 40332 of 2024 (Commr. of Customs, Chennai VII)

8. Customs Appeal No. 40333 of 2024 (Commr. of Customs, Chennai VII)

9. Customs Appeal No. 40334 of 2024 (Commr. of Customs, Chennai VII)

10. Customs Appeal No. 40336 of 2024 (Mr. T. Sankara Kumar)

11. Customs Appeal No. 40365 of 2024 (Mr. Nerella Samueal Deepak Avinash)

12. Customs Appeal No. 40541 of 2024 (Mr. Ashok Jain)

13. Customs Appeal No. 40542 of 2024 (Mr. Narendra Sharma)

14. Customs Appeal No. 40543 of 2024 (Mr. Sunil Sharma)

APPEARANCE:

For the Assessee : Mr. A.K. Jayaraj, Advocate (Sl.Nos. 1,2,13)

Mr. C. Mohan, Mr. M. Kumaresan, Ms. Dhilshath, Advocates (Sl.No. 3)

Mr. A. Ganesh, Advocate (Sl.Nos. 8,11)

Mr. Aliakbar Devjani, Advocate (Sl.Nos. 5,12,14)

Mr. T. Sankara Kumar, Party in-person (Sl.No. 10)

For the Respondent : Mr. Anoop Singh, Authorised Representative

CORAM:

HON’BLE MR. P. DINESHA, MEMBER (JUDICIAL)

HON’BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)

FINAL ORDER Nos. 40587-40600 / 2026

DATE OF HEARING : 27.11.2025

DATE OF DECISION : 08.05.2026

Per Mr. VASA SESHAGIRI RAO

The present appeals and cross-appeals arise out of Order-in-Original No. 32/2024-AIR dated 03.02.2024 passed by the Principal Commissioner of Customs (Air Cargo), Chennai-VII Commissionerate. Since all the appeals emanate from the same Order-in-Original, involve common facts, common evidence and overlapping issues of law, they are taken up together and disposed of by this common order in respect of the undermentioned Appeals as tabulated below: -

Sl. No.	Appeal No.	Appeal Filed By	Appellant Name / Authority S/Shri	Capacity / Description	Duty / Penalty Involved
1	C/40309/2024	Assessee	A. Mariappan	CEO, M/s BSM Logistics	Penalty under Customs Act (as per OIO)
2	C/40310/2024	Assessee	M/s BSM Logistics	Customs Broker Firm	Penalty under Section 114(iii)
3	C/40336/2024	Assessee	T. Sankara Kumar	Partner, M/s BSM Logistics	Penalty under Section 114(iii)
4	C/40365/2024	Assessee	Nerella Samuel Deepak Avinash	Appraiser of Customs	Penalty under Sections 112(ii) / 114(iii)
5	C/40541/2024	Assessee	Ashok Jain	Associated Person	Personal penalty
6	C/40542/2024	Assessee	Narendra Sharma	Associated Person	Personal penalty
7	C/40543/2024	Assessee	Sunil Sharma	Proprietor, M/s Shree Balaji Jewellers	Penalty / confiscation related
8	C/40323/2024	Department	Commissioner of Customs	HDFC Bank	Release / liability relating to seized goods
9	C/40332/2024	Department	Commissioner of Customs	Shri Zillur Mondal	Confiscation / redemption fine
10	C/40329/2024	Department	Commissioner of Customs	Shri Narendra Sharma	Challenge to dropping / reduction of penalty
11	C/40330/2024	Department	Commissioner of Customs	Shri Ashok Jain	Challenge to dropping / reduction of penalty
12	C/40331/2024	Department	Commissioner of Customs	Departmental Appeal	Challenge to dropping / reduction of penalty
13	C/40333/2024	Department	Commissioner of Customs	Shri Nerella Samueal Deepak Avinash Appraiser	Challenge to exoneration under 114AA
14	C/40334/2024	Department	Commissioner of Customs	Departmental Appeal	Challenge to dropping of penalty

The appeals have been filed by exporters, their associated persons, Customs Broker, job workers and Customs officers, while the Department has filed appeals challenging non-imposition of penalty, incorrect invocation of statutory provisions and non-imposition of redemption fine. The facts being inter-connected, a consolidated narration is necessary.

2. The case originated from specific intelligence developed by the Directorate of Revenue Intelligence that certain exporters were fraudulently exporting gold-plated copper jewellery as 22 carat gold jewellery with the intent to divert duty-free gold procured under Notification No. 57/2000-Cus dated 08.05.2000. Acting on this intelligence, DRI intercepted and recalled an export consignment covered under Shipping Bill No. 7870940 dated 31.01.2022 filed by M/s. Shree Balaji Jewellers, declared as 22 carat gold jewellery. Examination of the consignment in the presence of independent witnesses, supported by XRF testing and assay at a BIS-recognised hallmarking centre, revealed that the goods were copper bangles coated with a thin layer of gold containing only about 7.5% to 10.35% gold. Investigation further revealed that duty-free gold procured through HDFC Bank, a nominated agency, was diverted to the domestic market while fake jewellery was exported to falsely fulfil export obligations. The manufacturing chain was traced to M/s. Ashok Jewellers, whose proprietor admitted to producing gold-coated copper bangles using only a fraction of the declared gold, thereby establishing the modus operandi of diversion.

3. The investigation has clearly brought out the involvement of Customs official and intermediaries, especially examination of the consignment by a non-rostered Appraiser and use of another officer’s seal, as well as the role of the Customs Broker in fa

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