Order Date: 23 February 2023

Parties: Siddhnath Shipping and Shakti Forwarders Pvt Ltd vs. C.C.-Kandla

Facts – 

• The Applicant, M/s Siddhnath Shipping’s proprietor who was also working as Power of Attorney holder of CHA in the name of M/s Shakti Enterprises had filed the Shipping Bill on behalf of exporter M/s Siddhnath Shipping. The net weight of the cargo declared was 19002 Kgs. However, on examination, the goods were found to be of inferior quality and the net weight was only 1450 Kgs. 
• Accordingly, a show cause notice was issued demanding customs duty and proposing confiscation of the goods and penalties on the Appellants. Learned Commissioner confirmed customs duty, confiscated 1450 Kgs. of inferior quality goods attempted to be exported, and imposed penalties.
• Aggrieved by such impugned order, the appellants are before this Tribunal.

Issue – 

• Whether the applicant is liable to pay the customs duty?

Orders –

• The Court heard the contention of the department that M/s Siddhnath got good quality goods from M/s Cosmic, EOU unit; re-warehoused them at his KASEZ unit diverted these goods to the DTA, and attempted to export inferior quality goods.
• The Court observed that in the allegation of clandestine removal of the goods from the trading unit at KASEZ, no cogent evidence was produced by the revenue. Not a single customer is brought on records who has received the clandestinely removed goods.
• The Court relied on the case of Oudh Sugar Mills Ltd. v. Union of India, wherein the Apex Court stated that the charge of clandestine removal must be based on tangible evidence and not on inferences involving unwarranted assumptions.
• The Court stated that the demand for customs duty is not sustainable and consequently, the confiscation of goods is also incorrect and illegal. The impugned orders are set aside. Appeals are allowed with consequential relief.