𝐀𝐚𝐝𝐫𝐢𝐤𝐚𝐚 𝐋𝐞𝐠𝐚𝐥 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 (𝐀𝐋𝐒)

Tag: #Smuggling

CESTAT Kolkata Sets Aside Gold Smuggling Penalty
Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

Date: 08.07.2026

CESTAT Kolkata Sets Aside Gold Smuggling Penalty

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata, recently delivered a significant judgment in the case of M/s. Bapi Das, who appealed against a penalty imposed for alleged involvement in gold smuggling. This article provides a detailed analysis of the case, the legal arguments, and the Tribunal’s reasoning, highlighting the importance of corroborative evidence in customs adjudication.

Background of the Case
- Incident: On 13 January 2018, DRI officers arrested Kartik Sen with 40 pieces of gold. Sen claimed he was introduced to the smuggling operation by Sushil Bauli and acted under the instructions of Bapi Das.
- Proceedings: The gold was confiscated, and penalties were imposed on several individuals, including Bapi Das. Only Bapi Das appealed the penalty of Rs. 30,00,000.
Key Statements and Evidence
1. Kartik Sen’s Statement: Alleged that Bapi Das orchestrated the smuggling, introducing him to suppliers and directing operations.
2. Sushil Bauli’s Statement: Denied knowing Bapi Das or introducing Sen to him, contradicting Sen’s account.
3. Bapi Das’s Statement: Initially confessed to involvement but later retracted the statement before a magistrate, claiming coercion.
4. Other Alleged Associates: No statements were recorded from other named individuals (e.g., Bharat Biswas, Asit Roy, Shyam Sarkar), and no physical evidence linked Bapi Das to the smuggled gold.
Legal Arguments by the Appellant
- Reliance on Uncorroborated Statements: The appellant argued that the penalty was based solely on uncorroborated statements of co-accused, without independent evidence.
- Retraction of Confession: The confession was retracted at the earliest opportunity, undermining its evidentiary value.
- No Physical or Documentary Evidence: No gold, documents, or financial records were found linking Bapi Das to the smuggling.
- Procedural Lapses: The authorities failed to follow the mandatory procedure for admitting statements as evidence under Section 108 of the Customs Act and Section 9D of the Central Excise Act.
Judicial Precedents Cited

The appellant relied on several Supreme Court and High Court decisions, including:
- Mohtesham Mohd. Ismail v. Special Director, Enforcement Directorate: Confessions of co-accused require corroboration.
- Prakash Kumar v. State of Gujarat: Co-accused confessions are weak evidence.
- G-Tech Industries v. Union of India: Statements must be admitted following strict procedures; otherwise, they lack evidentiary value.
- Commissioner of Customs (Imports), Mumbai v. Ganpati Overseas: Retracted statements cannot be relied upon without corroborative evidence.
Tribunal’s Findings
- Contradictory Statements: The statements of Kartik Sen and Sushil Bauli did not corroborate each other.
- Retraction Considered: The Tribunal noted the immediate retraction of Bapi Das’s confession, reducing its reliability.
- Lack of Corroborative Evidence: No independent evidence (physical, documentary, or financial) supported the allegations against Bapi Das.
- Procedural Non-Compliance: The authorities did not follow the mandatory procedure for admitting statements as evidence.
Final Order and Implications
- Penalty Set Aside: The Tribunal set aside the Rs. 30,00,000 penalty against Bapi Das, emphasizing that penalties cannot be imposed solely on uncorroborated statements of co-accused.
- Legal Principle Affirmed: The judgment reinforces the need for independent corroboration and strict adherence to procedural safeguards in customs and excise cases.
Conclusion

The Bapi Das CESTAT Kolkata case underscores the judiciary’s insistence on fair procedure and reliable evidence in penal actions under customs law. It serves as a reminder that confessions—especially those retracted or made by co-accused—must be corroborated by independent evidence before forming the basis for penalties or convictions.

Connected Matter

High Court of Punjab & Haryana Sets Aside Excise Order for Non-Compliance with Section 9D

Source: CESTAT Kolkata

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July 8, 2026
CESTAT Chandigarh on Alleged Cigarette Smuggling and Customs Penalties
Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

Date: 07.07.2026

CESTAT Chandigarh on Alleged Cigarette Smuggling and Customs Penalties

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Chandigarh recently delivered a significant judgment in the case involving the alleged smuggling of prohibited cigarettes and the role of Shri Sanjay Choudhary. This article provides a detailed overview of the case, the legal arguments, and the final decision, offering insights into the complexities of customs law enforcement in India.

Background of the Case
- Incident: On 19 May 2021, customs officials at Ludhiana discovered a large quantity of undeclared, prohibited cigarettes concealed behind bags of dry dates in a consignment imported by M/s Shreyans Appearls & Leatherites.
- Seizure Details:
  - 120 cartons of ESSE brand (1,200,000 sticks)
  - 20 cartons of Benson & Hedges (200,000 sticks)
  - 110 cartons of Gudang Garam (1,584,000 sticks)
- Legal Context: Import of cigarettes is strictly regulated under the Cigarettes and Other Tobacco Products Act (COTPA, 2003) and related rules. The seized cigarettes lacked statutory warnings and were not declared in import documents, making them liable for confiscation under Section 111 of the Customs Act, 1962.
Allegations Against Sanjay Choudhary

The customs department alleged that Shri Sanjay Choudhary:
1. Assisted in procuring prohibited cigarettes.
2. Helped the main accused, Sh. Chander Shekhar, abscond by providing cash and promising to settle the case.
3. Was evasive during investigations and attempted to clear the consignment at the port.
4. Was linked to the booking of containers through his employee and had overlapping travel dates with Chander Shekhar in Dubai.
5. Tried to obstruct investigations by filing writ petitions.
Based on these allegations, a penalty of Rs. 55,00,000 was imposed on Choudhary under Sections 112(a)(i) and 114AA of the Customs Act.

Defense and Legal Arguments

Choudhary’s defense, as presented by his counsel, focused on the following points:
- The entire case against him was based solely on the statement of Chander Shekhar, which was not corroborated by any documentary or independent evidence.
- No financial transactions or partnership links between Choudhary and Chander Shekhar were established.
- The customs broker and other key witnesses did not implicate Choudhary in their statements.
- There was no evidence that Choudhary had any role in the import, clearance, or documentation of the prohibited goods.
- The penalties under Sections 112 and 114AA were not sustainable as Choudhary neither imported nor dealt with the goods, nor made any false declarations.
Tribunal’s Findings

The CESTAT bench, after reviewing all evidence and arguments, made the following key observations:
1. Lack of Corroborative Evidence: The only evidence against Choudhary was the statement of Chander Shekhar, which was not supported by any other witness or document.
2. No Direct Involvement: There was no proof that Choudhary was involved in the import, clearance, or handling of the smuggled cigarettes.
3. No Basis for Penalty: The requirements for imposing penalties under Sections 112(a)(i) and 114AA were not met, as Choudhary had not made any false declarations or directly dealt with the goods.
4. Commissioner (Appeals) Decision Upheld: The tribunal found no infirmity in the order of the Commissioner (Appeals), who had dropped the penalties against Choudhary.
Final Order

The CESTAT dismissed the appeal filed by the Revenue, upholding the order that exonerated Sanjay Choudhary from all penalties related to the alleged smuggling case. The cross-objection application was also disposed of accordingly.

Key Takeaways
- Importance of Corroborative Evidence: Mere statements without supporting evidence are insufficient for imposing penalties in customs cases.
- Due Process: The case highlights the necessity for thorough investigation and adherence to legal standards before penalizing individuals.
- Legal Precedent: This ruling reinforces the principle that penalties under customs law require clear, direct involvement and cannot be based solely on uncorroborated allegations.
This case serves as a crucial reference for importers, legal practitioners, and enforcement agencies dealing with customs law and the import of regulated goods in India.

Source: CESTAT Chandigarh

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July 7, 2026
CESTAT Chandigarh Sets Aside Penalty on Customs Broker in High-Profile Cigarette Smuggling
Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

Date: 03.07.2026

CESTAT Chandigarh Sets Aside Penalty on Customs Broker in High-Profile Cigarette Smuggling

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

A recent decision by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Chandigarh has significant implications for customs brokers and the enforcement of penalties under the Customs Act, 1962. The case involved the seizure of prohibited cigarettes concealed within a consignment of dry dates and the subsequent imposition of a penalty on the customs broker, Shri Amandeep Singh Bagri, proprietor of Mojos Impex International. This article provides a detailed overview of the case, the legal arguments, and the Tribunal’s reasoning in setting aside the penalty.

Background of the Case
- Consignment Details: On 13 May 2021, M/s Shreyans Appearls & Leatherites, Ludhiana, filed a Bill of Entry for 1120 bags of dry dates, valued at Rs. 19,04,892, through customs broker Shri Amandeep Singh Bagri.
- Discovery of Concealed Goods: During examination on 19 May 2021, customs officers discovered cartons of prohibited cigarettes (brands: ESSE, Benson & Hedges, Gudang Garam) concealed behind layers of dry dates. The cigarettes were not declared in the import documents and lacked statutory health warnings, violating Indian regulations.
- Legal Action: The goods were seized under Section 110 of the Customs Act, 1962, and investigations led to a show cause notice against the customs broker for alleged violations under Regulation 10 of the Customs Brokers Licensing Regulations (CBLR), 2018.
Proceedings and Penalty
- Original Penalty: The adjudicating authority imposed a penalty of Rs. 10,00,000 on Shri Amandeep Singh Bagri under Section 112(a)(i) of the Customs Act, 1962, for acts or omissions rendering goods liable for confiscation under Section 111.
- Appeal and Dismissal: The customs broker appealed, but the Commissioner (Appeals), CGST, Ludhiana, upheld the penalty.
Key Legal Arguments

Appellant’s Contentions
1. No Mens Rea or Evidence of Guilty Mind: The customs broker argued that previous proceedings had already cleared him of any intentional wrongdoing or negligence. The Commissioner of Customs had earlier revoked the suspension of his license, finding no evidence of mens rea or direct involvement in the smuggling.
2. No Specific Violation of CBLR Cited: The show cause notice did not specify which regulation of the CBLR was violated, and no penalty was imposed under the CBLR itself.
3. Improper Application of Section 112: The penalty under Section 112(a)(i) requires a direct act or omission that renders goods liable for confiscation under Section 111. The appellant argued that there was no such finding or allegation against him.
4. Supporting Case Law: The appellant cited several CESTAT decisions, including M/s Exim Services vs. CC, Ludhiana, and P.S. Bedi & Company vs. CC, which established that penalties under Section 112 require clear findings of acts or omissions leading to confiscation.
Department’s Position
- The department maintained that the customs broker failed in his duties under the CBLR and supported the penalty imposed.
Tribunal’s Analysis and Decision
- No Evidence of Broker’s Involvement: The Tribunal found no corroborative evidence that the customs broker had knowledge of or connived in the misdeclaration. The broker acted as a facilitator based on documents provided by the importer.
- No Violation Under Section 111: The Tribunal noted that neither the show cause notice nor the orders recorded any act or omission by the broker that rendered the goods liable for confiscation under Section 111.
- Improper Penalty Application: Both lower authorities focused on alleged CBLR violations but did not impose penalties under the CBLR. The Tribunal emphasized that Section 112 penalties require a direct link to acts or omissions under Section 111, which was absent in this case.
- Precedent Followed: The Tribunal relied on prior decisions, reiterating that penalties cannot be imposed on customs brokers without clear findings of culpable conduct.
Final Outcome

The CESTAT Chandigarh set aside the penalty of Rs. 10,00,000 imposed on Shri Amandeep Singh Bagri, holding that the penalty was not legally sustainable in the absence of evidence linking the broker’s actions to the confiscation of goods.

Implications for Customs Brokers
- Due Diligence Affirmed: The ruling underscores the importance of due diligence by customs brokers but also protects them from penalties in the absence of evidence of intentional wrongdoing.
- Clear Findings Required: Authorities must establish a direct link between a broker’s actions and the liability of goods for confiscation before imposing penalties under Section 112.
Conclusion

This decision reinforces the principle that penalties under the Customs Act must be based on clear evidence and specific findings. Customs brokers are not automatically liable for the actions of importers unless there is proof of their involvement or negligence.

The case serves as a crucial reference for future disputes involving customs brokers and the enforcement of penalties under Indian customs law.

Source: CESTAT Chandigarh

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July 3, 2026