S A Dalal And Co Vs Commissioner of Customs (Import) (CESTAT Mumbai)
Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in Mumbai has set aside a penalty of ₹10 lakh imposed on S.A. Dalal & Co., a Customs House Agent (CHA), by the Commissioner of Customs (Appeals). The tribunal’s decision, pronounced on June 10, 2025, underscores the importance of due process and corroborative evidence in imposing penalties.
The case, S.A. Dalal And Co. Vs. Commissioner of Customs (Import), centered on the legality of a penalty levied under Section 112A of the Customs Act, 1964. The appellant CHA was subjected to adjudication based on statements recorded from an importer, Shri Prabhat Tarsaria of M/s. P.T. Mobile and Accessories, and Mr. Rupin Parekh, a director of M/s. Parikh Clearing Agency, under Section 108 of the Customs Act. Crucially, the appellant’s statement was not recorded, nor were any documents seized from their possession during the investigation.
The Commissioner (Appeals), in an order dated March 15, 2022, had upheld the penalty, stating that recording a statement was not a prerequisite for imposing a penalty under Section 112. However, the CESTAT found this reasoning problematic.
The appellant’s counsel cited judicial precedents, including Enterprise International Ltd versus Commr of Cus.(Port), Kolkata (2010 (259) E.L.T. 629 (Tri.-Kolkata)) and Warren Trading Pvt. Ltd versus Commissioner of Customs, Kandla (2008 (222) E.L.T. 313 (Tri.-Ahmd.)). These cases established that penalties are not sustainable when an investigation has not been conducted at the appellant’s end, nothing incriminating has been recovered from their premises, and their statement has not been recorded.
