CESTAT Remands Customs Penalty Case Over Gold Jewellery Diversion, Cites Non-Disclosure of Documents and Contradictory Findings [Read Order]

The principal bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, has recently remanded a Customs penalty case for fresh adjudication after identifying significant procedural and factual gaps in the original order.

The appellant, Mrinal Ojha, penalised under Section 114(iii) of the Customs Act, 1962, faced allegations of illegal exports and remittances involving gold jewellery.

The appellant contended that there was no direct link between him and the alleged diversion of duty-free gold, and the department had not produced evidence justifying the penalty.

The case involves alleged remittances amounting to USD 17,11,926 (approximately ₹11.12 crore) to M/s Shree Ganesh Jewels. However, the consignments of exported goods were reportedly in the name of M/s Valdek SRO, a Hong Kong-based entity established by Mrinal Ojha.

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Counsel for the appellant highlighted that his client had not authorised any transaction related to these remittances, and the documents supporting the allegations, including statements of Mrinal Ojha, were not provided during adjudication.

The tribunal noted that the adjudicating authority’s order contained contradictory findings. Paragraph 3.2.1 and paragraph 2.6 of the original order offered inconsistent conclusions regarding Mrinal Ojha’s involvement in the alleged diversion of gold jewellery manufactured from duty-free gold supplied by nominated agencies

Such contradictions, coupled with the non-disclosure of relied-upon evidence, undermined the fairness and clarity of the adjudication process.

Acknowledging these gaps, the bench of SV Singh (Technical Member) directed that the matter be remanded back to the adjudicating authority. The authority is now required to provide the appellant with copies of all relied-upon documents and issue a fresh order addressing the inconsistencies. The tribunal emphasised that the adjudicating authority must clearly establish the role of Mrinal Ojha and any connection, if any, the appellant had to the alleged diversion of gold jewellery before imposing a penalty.