The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that allegation of non-verification of physical premises of importer is not sufficient to fasten customs broker with penalty.
The bench of Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) has observed that the appellant-Customs Broker had simply facilitated the customs transaction on behalf of the importer/exporter and no evidence has been led by Revenue to establish that he was directly involved in any wrongdoing in respect of the consignment.
The appellant, Him Logistics Pvt. Ltd. is a Customs Broker holding CHA Licence No. 07/2004 issued by the Commissioner of Customs (I&G) New Delhi under Regulation 9(1) of CHALR, 2004 valid upto 02.12.2018.
The appellant is engaged in the business of the clearance of the import and export consignments. The proprietor and IEC holder of M/s. Jagdamba Enterprises- Sh. Naresh Kumar Jha, met the director of the appellant Sh. Ashok Sharma, in his office along with Sh. Pawan Ralli and sought their services for the clearance of the import consignment in October 2013.
Thereafter, the appellant obtained the IEC copy, authority letter, ID proof from Sh. Pawan Kumar Ralli who had visited along with the importer. Sh. Pawan Kumar Ralli was an importer and freight forwarder, who besides M/s. Jagdamba Enterprises, had introduced five to six other importers to the appellant.
The appellant cleared eleven consignments of M/s Jagdamba Enterprises prior to the impugned consignment. The appellant filed the Bill of Entry No. 6907998 dated 27.09.2014 on behalf of the importer viz., M/s. Jagdamba Enterprises declared the items as per the import documents i.e., kids cotton belt, photo frame, candle stand glass, scrubber, scales. However, on examination of the goods, some undeclared goods as well some the declared goods in varying quantities were found.
Consequently, the container was detained.
The IEC holder Naresh Kumar Jha disowned the ownership of the goods imported and stated that his IEC had been misused by Sh. Pawan Kumar Ralli. On completion of the investigations, the appellant was made co-noticee to the show cause notice for imposition of penalty under Section 112(a) and 114AA of the Customs Act, 1962. The adjudicating authority passed the Order and imposed a penalty of Rs. 1,00,00,000 under Section 112(a) of the Customs Act, 1962.
The appellant has contended that the penalty under Section 114AA of the Customs Act, 1962 has not been proposed either against the importer/IEC holder or against Pawan Ralli who has been held to be the main person importing the goods. Therefore, to propose the penalty under Section 114AA of the Customs Act, 1962 against the Customs Broker is not justifiable and the penalty is liable to be set-aside on the ground earlier.
The tribunal while quashing the penalty held that It has not been established that the appellant handled this consignment with any malafide motive. It is essential to establish an intentional or deliberate act or omission and to the act of abetment for imposition of penalty under Section 114AA of the Customs Act.
Case Details
Case Title: HIM Logistics Private Limited Versus Commissioner of Customs
Case No.: Customs Appeal No.53566 Of 2018
Date: 05.05.2025
Counsel For Appellant: Shivendu Sharma
Counsel For Respondent: Rajesh Singh
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