In two rulings, the Delhi High Court and the Customs, Excise and Service Tax Appellate Tribunal, New Delhi set aside penalties on customs agents for want of evidence of their knowledge of mis‑declaration.
Penalties on customs agents cannot rest on an inference of knowledge drawn from co‑noticees’ statements or from the mere fact of mis‑declaration by the client, the Delhi High Court and the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi have held in separate rulings [Harish Goyal v. Commissioner of Customs, 2026-juristway.com-3376-HC(Delhi)-Customs; NRS Logistics v. Commissioner of Customs, New Delhi, 2026-juristway.com-3353-CESTAT(New Delhi)-Customs].
Harish Goyal. Justice Avneesh Jhingan, writing for a Bench with Justice Shail Jain, allowed an appeal under Section 130 of the Customs Act, 1962 by a Ludhiana customs house agent penalised ₹10,00,000 under Section 112(b)(i). Chinese firecrackers had been found concealed behind bicycle parts at the Inland Container Depot, Tughlakabad, in September 2016 and seized before any bill of entry was filed.
The adjudicating authority accepted that the agent’s role in the import was not proved, but penalised him for knowing of the mis‑declaration and arranging a meeting with the alleged importer and two Delhi‑based agents. The Court found no evidence other than co‑noticees’ statements. The persons at that meeting were never proceeded against, and the case that the agent’s client was the real importer failed when the client succeeded before the CESTAT.
The Court held that cross‑examination, though not an absolute right, falls within natural justice and accords with Section 138B of the Act. The agent had sought cross‑examination of three witnesses, and the CESTAT wrongly assumed he had not. Penalties on co‑noticees had also been set aside for lack of independent evidence, and the different treatment of the agent was unjustified. The penalty and the CESTAT order were set aside.
NRS Logistics. Ashok Jindal, Member (Judicial), allowed an appeal by a customs broker penalised under Sections 114(iii) and 114AA of the Customs Act after an exporter’s goods were found overvalued on examination and a market survey. The broker had obtained know‑your‑customer documents under the Customs Brokers Licensing Regulations, 2018 (CBLR) and said it was unaware of the overvaluation.
The Tribunal found that the Revenue had brought no evidence that the broker knew of the overvaluation before examination, and that no proceedings had been initiated against it under the CBLR. Without that knowledge, the proceedings could not be sustained, and both penalties were set aside with consequential relief.
In both cases the penalties on the agents were set aside in full.
2026-juristway.com-3376-HC(Delhi)-Customs | 2026-juristway.com-3353-CESTAT(New Delhi)-Customs
