CESTAT Delhi Sets Aside Redemption Fine In Ketamine Export Case As Goods Not Available For Confiscation

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has set aside a redemption fine imposed in connection with the export of ketamine to China after holding that the goods had already been exported and were no longer available for confiscation.

Technical Member Rajeev Tandon partly allowed the appeal. He, however, upheld the appellant's liability for his role in the export operation and reduced the penalty imposed on him to ₹5 lakh.

The Tribunal held, “The fact that they are not being available for confiscation is, therefore, imperative. To this extent, the fine imposed would not be sustainable in the first place.”

The case arose from investigations into exports made in the name of Vikas Overseas. Chinese authorities seized 1,010 kilograms of ketamine from a consignment declared as Alpha Olefin Sulphonate (AOS).

According to the department, the IEC and name of Vikas Overseas were misused for the exports. Investigations further revealed that export documents had been fabricated and a bank account had been opened using false documents.

Devinder Pramod contended that he was merely a commission agent who arranged sourcing of goods for export. He argued that no ketamine had been recovered in India and that the case was based on information received from Chinese authorities.

The Tribunal rejected the contention. It noted evidence showing that the appellant arranged procurement of goods, coordinated logistics, arranged CHA services, and facilitated export documentation.

The Tribunal observed, “the present matter is not merely one of mis-declaration but of deliberate and organised criminal conspiracy to smuggle ketamine under the false declaration of AOS.”

The tribunal also noted evidence indicating misuse of another entity's IEC, opening of bank accounts through fabricated documents, and receipt of export proceeds through such accounts.

It held that the appellant's defence that he acted only as a commission agent was not supported by the evidence on record. The Tribunal further held that witness statements and documentary evidence established his involvement in the export operation.

While upholding the finding of liability, the Tribunal took note of the large time lag since the commission of the offence and the lengthy legal process. It reduced the penalty imposed on the appellant to ₹5 lakh.