Commissioner (Appeals) Failed to Address Allegations and Defence: CESTAT Orders Re-examination in Import Misdeclaration [Read Order]

The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) set aside an order passed by the Commissioner of Customs (Appeals), finding that the appellate authority failed to discuss key allegations and the defence presented in a case involving alleged misdeclaration of imported goods valued at Rs. 2.83 crore.

Ketan Sood, the appellant and proprietor of Venus Enterprises, along with co-appellants Vineet Goyal and Ravinder Puri, faced proceedings initiated by the Directorate of Revenue Intelligence (DRI). The DRI examined three containers and found that one container held fewer cartons of footwear than declared, while two others contained foreign cigarettes instead of the declared disposable cups. A show cause notice was issued proposing confiscation of the goods and imposition of penalties.

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In response, the appellant’s counsel argued that he had limited knowledge of the imports, which were primarily managed by his late father and customs clearance agents. They submitted that his role was restricted to providing documentation and that he had no involvement in any misdeclaration or concealment.

The adjudicating authority rejected the defence and imposed a penalty of Rs. 90 lakh on each appellant under the Customs Act. The Commissioner (Appeals) upheld the penalties without addressing the detailed submissions made by the appellants or explaining the reasons for sustaining the findings of the original authority. The order merely stated that the appellants arranged the Importer Exporter Code (IEC) for consideration and had coordinated the clearance of the consignments.

The appellants’ counsel argued before CESTAT that the Commissioner (Appeals) did not engage with the specific allegations or rebuttals presented in their defence. They submitted that no speaking order was passed, and the findings were conclusory and unsupported by reasoning.

The revenue counsel supported the findings of the Commissioner (Appeals), relying on evidence such as call records and email communications allegedly linking the appellants to the import operations.

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The two-member bench comprising Justice Dilip Gupta (President) and P. Anjani Kumar (Technical Member) found that the Commissioner (Appeals) did not examine the case on the merits and failed to explain why the defence raised by the appellants was rejected. The tribunal held that such a non-speaking order violated the principles of natural justice and could not be sustained.

The tribunal remanded the matter back to the Commissioner (Appeals) for fresh adjudication, directing that a reasoned, speaking order be passed after considering all allegations, the adjudication findings, and the appellants' defence. The appeal was allowed by way of remand.

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