Customs Penalty Set Aside Due to Lack of Evidence Linking Broker to Fraudulent Exports

Kousik Nundy Vs Commissioner of Customs (Port) (CESTAT Kolkata)

The case involves two appeals filed by the appellant, a Customs Broker and proprietor of a forwarding firm, against separate orders passed by the lower authorities imposing penalties under Sections 114(iii) and 114AA of the Customs Act, 1962. Since both appeals involved a common question of law and arose from similar facts, they were decided through a common order.

The matter originated from two show cause notices alleging fraudulent export activities carried out by certain exporting firms through overvaluation of goods with the intent to avail undue IGST refunds. The department alleged that the appellant had connived with the exporters and facilitated the exports by providing contacts and documents to another Customs Broker who handled the shipments. It was also alleged that employees of the appellant’s firm were involved in facilitating these exports. Based on these allegations, penalties were imposed on the appellant and subsequently upheld by the Commissioner (Appeals).

The appellant contested the allegations, stating that he had no involvement in the exports in question and was not the Customs Broker handling those consignments. It was submitted that none of the individuals allegedly involved in the export process were employees of the appellant’s firm at the relevant time. The appellant also denied any connection with the Customs Broker who processed the shipments and argued that the imposition of penalties was arbitrary and unsupported by evidence.