Commissioner of Customs (Preventive) Bhubaneswar Vs Manish Khemka

1. Assailing order dated 25.09.2024 passed by the Customs, Excise and Service Tax Appellate Tribunal, (Eastern Zonal Bench), Kolkata (for short, “the CESTAT”) in Customs Appeal No.75899 of 2024 and Customs Cross Objection No.75575 of 2024 (Commissioner of Customs (Preventive), Bhubaneswar Vs. M/s. S.M. Nirayat Pvt. Ltd.) WITH Customs Appeal No.75900 of 2024 and Customs Cross Objection No.75577 of 2024 ( Commissioner of Customs (Preventive), Bhubaneswar Vs. M/s. S.M. Niryat Pvt. Ltd.), arising out of Order-in-Original No.CC(P)/BBSR/CUS/No.04/Commissioner/2024, dated 18.01.2024; Customs Appeal No.75901 of 2024 and Customs Cross Objection No.75579 of 2024 (Commissioner of Customs (Preventive), Bhubaneswar Vs. M/s. Disha Realcon Pvt. Ltd.), arising out of Order-in-Original No.CC(P)/BBSR/CUS/NO01/COMMISSIONER/2024, dated 08.01.2024; Customs Appeal No.76102 of 2024 and Customs Cross Objection No.75607 of 2024

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( Commissioner of Customs (Preventive), Bhubaneswar Vs. Shri Ajay Gupta), arising out of Order-in-Original No.CC(P)/BBSR/CUS/NO-01/COMMISSIONER/2024, dated 08.01.2024; Customs Appeal No.76103 of 2024 and Customs Cross Objection No.75608 of 2024 ( Commissioner of Customs (Preventive), Bhubaneswar Vs. Shri Ajay Gupta ), arising out of Order-in-Original No.CC(P)/BBSR/CUS/NO04/COMMISSIONER/2024, dated 18.01.2024; Customs Appeal No.76104 of 2024 and Customs Cross Objection No.75609 of 2024 ( Commissioner of Customs (Preventive), Bhubaneswar Vs. Shri Ajay Gupta), arising out of Order-in-Original No.CC(P)/BBSR/CUS/NO-05/COMMISSIONER/2024, dated 24.01.2024; Customs Appeal No.76105 of 2024 and Customs Cross Objection No.75610 of 2024 ( Commissioner of Customs (Preventive), Bhubaneswar Vs. Shri Manish Khemka), arising out of Order-in-Original No.CC(P)/BBSR/CUS/NO01/COMMISSIONER/2024, dated 08.01.2024; Customs Appeal No.76106 of 2024 and Customs Cross Objection No.75611 of 2024 ( Commissioner of Customs (Preventive), Bhubaneswar Vs. Shri Manish Khemka), arising out of Order-in-Original No.CC(P)/BBSR/CUS/NO-04/COMMISSIONER/2024, dated 18.01.2024; Customs Appeal No.76107 of 2024 and Customs Cross Objection No.75612 of 2024 ( Commissioner of Customs (Preventive), Bhubaneswar Vs. Shri Manish Khemka), arising out of Order-in-Original No.CC(P)/BBSR/CUS/NO05/COMMISSIONER/2024, dated 24.01.2024; directed against the order of the Commissioner of Customs (Preventive), Commissionerate, Bhubaneswar, the instant appeal has been filed raising the following question(s) of law:

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“i) Whether on the facts and circumstance of the case, the Ld. Tribunal is correct in law and facts in dismissing the appeal filed by Department against the Order-in-Original No.CC(P)/BBSR/CUS/No.01/Commissioner/2024 dated 08.01.2024 passed by the Commissioner, Customs (Preventive) Commissionerate, Bhubaneswar ignoring the errors in the said Original-in-Original dated 08.01.2024?

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ii) Whether on the facts and circumstance of the case the Ld. Tribunal is correct in holding that the net Fe content of Iron Ore Fines for the purpose of levy of Customs duty shall be determined on WMT basis applying the conversion formula, when the emergence of formula for such conversion has no statutory basis?

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iii) Whether on the facts and circumstance of the case, the Ld. Tribunal is correct in law and facts in setting aside the Order-in-Original dated 08.01.2024 passed by the Commissioner of Customs (Preventive) Commissionerate, Bhubaneswar, when data was received, from the mobile phones, by the forensic database of Mr. Ajay Gupta, employee of Mr. Manish Khemka, Director of M/s. Disha Realcon Pvt. Ltd., it was found that there is incidence of duty liability when cargo was split into two parts, i.e., less than 58% and above 58% though the average FE content of the combined Cargo is more than 58%?”

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The learned CESTAT, upon taking into consideration of factual merit of the matter, has held as follows:

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“ 12. We are of the strong view that merely on the premise of mixing of the cargo, post the issuance of the let export order cannot justify the claim for

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demand of duty on the entire lot, when there is nothing contrary to hold Fe% being more than the dutiable threshold, when arrived at on WMT basis . For the reason we find no merit in the learned adjudicating authority, imposing penalty under Section 114AA on the respondents herein. Moreover, there is no discussion in the order passed by the learned Commissioner, with regard to justification for imposition of such a penalty on the respondents. For this reason alone, being bereft of any basis or argument, other than stating that the Director failed to inform the steve-doers, Customs brokers of the fact of the export lot comprised of distinct consignments, as per S/B filed and the fact of provisional/final invoices of the buyers, we see no merit in the imposition of penalty supra. As for the employee Ajay Gupta the crucial reason for imposition of penalty, is that he was found to be in possession of invoices pertaining to export of iron ore fines that were loaded into the vessels. This is no plausible reason and the penalty imposed is liable to be set aside, as the said invoices could not be connected to the impugned shipment. Having found commissioning of no wrong we fall to appreciate the logic for imposition of any such penalty on each of the respondents. In view of our findings above, we see no reason in the proposal of the Revenue to impose penalty under Section 114A of the Customs Act on the respondents. There is nothing on record, intentional or otherwise, to establish the usage of such material that has been found to be false or incorrect in any material particular, therefore any penalty on that account is certainly not imposable in the matter.

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13. In view of aforesaid we are not in agreement with the adjudicating authority imposing penalty under Section 114AA of the Customs Act on the respondents and the same is required to be set aside.”

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Mr. Saswat Acharya, learned Advocate appearing for the respondent submitted that the questions of law as posed by the appellant on the facts and in the circumstances of the case are no more res integra by virtue of judgment dated 31.07.2025 of this Court passed in OTAPL Nos.42 & 31 of 2025 respectively in the case of Commissioner of Customs (Preventive), Bhubaneswar Vs. M/s. Chamong Tee Exports Pvt. Ltd ., wherein it has been held that “Fe” content in Iron Ore Fines (IOF) is to be determined on the basis of “Wet Metric Ton” (WMT) but not “Dry Metric Ton” (DMT). He has placed reliance on the following paragraphs of the said judgment:

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“ 12. From the above quoted observations of the coordinate bench, it is exposit that the Fe content in IOF is to be determined on the basis of WMT and not DMT and in view of a decision having taken in this regard and in absence of any materials forthcoming before us to take a different view, the said point having settled cannot be said to be a debatable one nor it invites any different opinion to be arrived at. The comity of the judicial discipline demands the uniformity in a proposition of law and the judgment of the coordinate Bench of a Court binds the other coordinate Bench. The only course opens to the later coordinate Bench, in the event of dissent to refer the matter to the Chief Justice to constitute a larger Bench.

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13. As indicated above, we do not find any material forthcoming to take a different view and, therefore, the judicial discipline demands the adherence of the judgment rendered by the coordinate Bench at an earlier point of time. We thus do not find that the contention of the appellant that Fe content in IOF is to require to be determined on the basis of DMT and not WMT is sustainable .”

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3.1. The learned Advocate submitted that the ratio of judgment referred to supra is attracted to the instant case in all fours.

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Mr. Sujan Kumar Roy Choudhury, learned Senior Standing Counsel appearing for the appellant conceded and submitted that the aforesaid questions of law as sought to be formulated in the appeal preferred by the Commissioner of Customs have already been answered by this Court in the aforesaid cited judgment.

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Faced with such conceded position of law, this Court finds no substantial questions of law in the instant appeal filed under Section 130 of the Customs Act, 1962. Hence, the appeal is dismissed. Interlocutory Applications, pending if any, shall also be dismissed accordingly.

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(Harish Tandon) Chief Justice

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Signature Not Verified

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Digitally Signed Signed by: LAXMIKANT MOHAPATRA Designation: Senior Stenographer Reason: Authentication Location: High Court of orissa, Cuttack Date: 29-Oct-2025 11:59:17

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(M.S. Raman) Judge

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MRS/Laxmikant

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Commissioner of Customs (Preventive) Bhubaneswar v. Manish Khemka

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Commissioner of Customs (Preventive) Bhubaneswar v. Manish Khemka

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