2026-VIL-1849-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs - Penalty on exporter company and its Director for attempted export of prohibited red sanders concealed in export container - Substitution of declared goods during transit - Appellant exported steel wire in a container loaded and sealed in the presence of Central Excise Officers, which was intercepted by DRI and found to contain red sanders wood logs in place of a part of the declared goods - Whether penalty under Section 114(i) of the Customs Act, 1962 can be imposed on the Appellant company and its Director when their connivance or involvement in the attempted export of red sanders is not established - HELD - The goods were loaded and the container was sealed in the presence of the officers, and the substitution of steel wire by red sanders wooden logs happened during transport from the factory to the port, with the connivance of the driver, after the seal was broken in between. No evidence was brought on record to show that the Appellant company or its Director was involved in the offence in any manner, and the investigation did not establish their connivance. The findings of the Adjudicating Authority themselves recorded that the container was sealed by officers, that the perpetrators replaced the goods at some point, that the export order was procured by false assurance from the middleman, and that the Appellants filed a complaint against the fraudsters. These findings established the bona fides of the Appellant company, which as a bonafide exporter believed the person who cheated it - The penalty imposed on the Appellant company and its Director is not legally sustainable and set aside - Confiscation of export goods and redemption fine - Goods exported under supervision of Central Excise Officers - Declared steel wire was recovered along with red sanders wood logs from the sealed export container and was confiscated, with redemption fine imposed in lieu of confiscation - Whether the declared export goods are liable to confiscation and redemption fine is sustainable when the Appellant company is not held responsible for the attempted export of red sanders - HELD - The steel wire manufactured by the Appellant company was exported under proper supervision in the presence of the Central Excise Officer, and the Appellant company was not responsible for the attempted export of red sanders - The goods are not liable for confiscation and the redemption fine imposed in lieu of confiscation is not sustainable and is set aside - Penalty under Section 114(i) of the Customs Act, 1962 on Customs Broker's Manager and Business Developer who acted as middlemen in export consignment - Alleged facilitation of attempted smuggling of red sanders - Adjudicating Authority held the Appellants to have acted as middlemen in collusion with the main perpetrator and imposed penalty, whereas the Appellants contended that their role was limited to clearance work and introducing the concerned persons to each other - Whether penalty under Section 114(i) can be imposed on the Appellants when there is no evidence to show that they were knowingly involved in the attempted smuggling - HELD - The role played by the Appellants as recorded in the impugned order reveals only that they were middlemen who acted in connection with the export of steel wire. There is no evidence on record to show that they were knowingly involved in the attempted smuggling of red sanders, were part of the smuggling syndicate or facilitated the attempted smuggling - The penalties imposed on the Appellants under Section 114(i) are not sustainable and are set aside.
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