Cigarettes

The Delhi High Court has upheld the penalty against salaried employees namely Shekhar and Shushil Kumar Sharma of Customs House Agent (CHA), M/s Dilip Kumar Thakur who were involved in concealing cigarettes of foreign origin in cargo of mattresses. The bench of Justice Prathiba M. Singh and Justice Shail Jain has observed that the role played by the two Appellants, Shekhar and Shushil Kumar Sharma was active and supervisory in nature respectively. The penalty has been rightly imposed and the CESTAT has already taken a sympathetic view of the matter and reduced the penalty. M/s. Digital Exports had imported a consignment vide bill of entry No. 8358278. The same was inspected on 30th October, 2012 and the said bill of entry was filed by the Customs House Clearing Agent - M/s Dilip Kumar Thakur on behalf of the importer. The inspection of the consignment revealed that cigarettes of foreign origin were concealed in the declared cargo of mattresses and the total value of the said cigarettes was to the tune of Rs.3,40,74,000. A Show Cause Notice (SCN) was issued. A penalty to the tune of Rs. 50 lakhs was imposed by the Original Authority upon three persons, including the two Appellants herein, namely Shakti Nath Jha, Sh. Sushil Kumar Sharma, and Sh. Shekhar, who were the Appellants before the CESTAT. The Order was challenged by the aggrieved persons before CESTAT which in turn has reduced the penalty in respect of the two of the Appellants namely, Shekhar and Sushil Kumar Sharma, from Rs. 50 lakhs to Rs.10 lakhs. Insofar as Shakti Nath Jha is concerned, the penalty has been waived vide the impugned order. The CESTAT held that CHA firms are the most important link between the importer/exporter and the customs department. It is expected of CHA firms that the credentials of importer/exporter are properly verified by them before undertaking the work of clearances in the various custom houses. The CESTAT found that Sushil Sharma and Shekhar both the employees of M/s Dilip Kumar Thakur CHA firm, were in the forefront of handling the clearance work of their CHA firm. It was their responsibility to ensure that no unwarranted person made use of the CHA firm for clearing misdeclared or contravened goods. The tribunal found that both the appellants have failed in ensuring the clean credentials of the importer M/s Digital Exports. The tribunal opined that the penalty under Section112 (a) & (b) of the Customs Act, 1962 has rightly been imposed on both of them. However, considering their financial condition and the fact that they are paid employees with limited means, the CESTAT reduced the quantum of penalty from Rs. 50 lakhs to Rs. 10 lakhs on each. The appellants contended that these two persons, i.e., Sh. Shekhar and Sh. Sushil Kumar Sharma were mere salaried employees of the Customs House Agents (CHA) and their role was quite limited in nature. They are unable to afford the penalty which is being imposed by CESTAT. The department contended that Shekhar was the ‘H’ card holder and Sushil Kumar Sharma was the supervisor. Their role has been discussed in detail by CESTAT and they have been held liable. CESTAT has also taken a sympathetic view and has reduced the penalty imposed upon them from Rs.50 lakhs to Rs.10 lakhs. and hence, the same does not deserve to be reduced further. The court, while dismissing the appeal, refused to interfere in the order passed by CESTAT. Case Details Case Title: Sushil Sharma Versus Commissioner Of Customs Case No.: CUSAA 81/2019& CM APPL. 7106/2019 Date: 06th October, 2025 Counsel For Petitioner: Bharat Bhushan Counsel For Respondent: Harpreet Singh, SSC Click Here To Read Order Read More: GST Fraud Involving Fake ITC of Rs. 10.64 Crore in Iron and Steel Scrap Trading Business: CGST, Chennai North Commissionerate arrests 2 persons

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