Custom, Excise & Service Tax Tribunal
Kamal Sehgal vs Commissioner, Customs-New Delhi on 7 November, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH, COURT NO. I
CUSTOMS APPEAL NO. 50855 OF 2021
[Arising out of the Order-in-Original No. KS/COMMR/ACE/02/2021 dated 03/03/2021
passed by Commissioner of Customs (Export), New Delhi - 110 037.]
Shri Kamal Sehgal, Appellant
Customs House Agent,
D-52A, Vishwakarma Colony, M.B. Road,
New Delhi - 110 044.
VERSUS
Commissioner of Customs (Export), Respondent
Air Cargo Complex, New Customs House, Near IGI Airport, New Delhi - 110 037.
APPEARANCE Shri S. Sunil, Advocate - for the appellant.
Shri Mukesh Kumar Shukla, Authorized Representative (DR) - for the Department CORAM: HON'BLE SHRI JUSTICE DILIP GUPTA, PRESIDENT HON'BLE SHRI P.V. SUBBA RAO, MEMBER (TECHNICAL) DATE OF HEARING/DECISION: 07.11.2025 FINAL ORDER NO. 51766 /2025 JUSTICE DILIP GUPTA Shri Kamal Sehgal1 has assailed that portion of the order dated 03.03.2021 passed by the Commissioner that imposes a penalty of Rs. 2,00,000/- upon him under section 112 of the Customs Act, 19622.
2. It transpires from the records that the importer had filed a Bill of Entry dated 21.10.2008 for clearance of a consignment of Polyester branded Fabric against DFIA licence dated 23.05.2008. The proper officer resorted to first check and ordered for examination of the consignment and for testing of representative samples drawn from the
1. the appellant
2. the Customs Act 2 C/50855 OF 2021 consignment. The examining officer examined the consignment and found them to be in conformity with the declaration in terms of description, quantity and value. The representative sample was also sent for testing to the Textile Committee. The Textile Committee submitted a report dated 23.10.2008 confirming that the goods were 100% Polyester bonded Fabric. Thereafter, on perusal of the examination report and test report and verification of the declarations made in the Bill of Entry and finding that the goods were covered by the DFIA licence, the proper officer assessed the duty by allowing the benefit of the Notification and debited basic customs duty against the DFIA licence. An out of charge order was also issued.
3. The importer had also filed three Bills of Entry dated 04.11.2008, 10.11.2008 and 21.10.2008 in which the same process was adopted by the proper officer for clearance of goods and for issuance of the out of charge order.
4. It further transpires from the records that the officers of Directorate of Revenue Intelligence3 searched the premises of the importer and resumed documents pertaining to the four consignments and seized an amount of Rs. 1,16,12,266/-. A statement of the importer was also recorded under section 108 of the Customs Act.
5. Thereafter, a show cause notice dated 14.12.2010 was issued to the importer proposing to deny the benefit of the Notification and demanding customs duty of Rs. 1,16,12,266/- after invoking the extended period of limitation under the proviso to section 28 (1) of the Customs Act.
4. DRI 3 C/50855 OF 2021
6. The appellant is a Customs House Agent. The show cause notice dated 14.12.2010 was also issued to the appellant alleging that the appellant, as a customs house agent, helped the importer in procuring and purchasing DFIA licences and thereafter had filed the four Bills of Entry on the basis of DFIA licences. However, as the items allowed to be imported were different from the items imported as per the Bills of Entry, the appellant helped the importer in evading customs duty, which had rendered the appellant liable to penalty under section 112 of the Customs Act.
7. The appellant filed a reply to the show cause notice contending that the importer had purchased the DFIA licences and made payments for the said licences and the appellant had no role if payment of duty for the licences purchased by the importer were evaded. The appellant also submitted that it was in good faith and under a bonafide belief that the goods were covered under the DFIA licences that the appellant had filed the Bills of Entry on the basis of the declaration made in import documents submitted by the importer. The appellant also submitted that by the first check, the assessing officer had ordered for examination of the goods and testing of the samples. After the examination was conducted and testing reports were received, the goods were cleared. Thus, there was no occasion for the department to impose any penalty upon the appellant under section 112 of the Customs Act.
8. The impugned order confirms the imposition of penalty upon the appellant in paragraph 81. After reproducing section 112 of the Customs Act, the order holds:-
4 C/50855 OF 2021 "(a) The benefit of Notification No. 40/2006-CUS dated 01.05.2006 is denied and clearance of the goods against the said DFIA licences are rejected.
(b) The goods valued at Rs. 80,05,805/- cleared vide bills of entry no. 744705 dated 10.11.2008, 748788 dated 25.11.2008, 740441 dated 21.10.2008 and 100457 dated 04.11.2008 is confiscated under section 111 (m) and 111
(c) of the Customs Act, 1962. However, I do not impose any redemption fine on the said goods as they are not available for confiscation.
(c) The sale proceeds of illegal imported goods i.e. Rs. 25 lakhs is confiscated under section 121 of the Customs Act, 1962".
9. Shri S. Sunil, learned counsel for the appellant submitted that the provisions of section 112 of the Customs Act could not have been invoked for imposition of penalty upon the appellant. Learned counsel submitted that penalty under section 112 of the Customs Act can be imposed only when the goods were found to be liable to confiscation under section 111 of the Customs Act, but the appellant did not do any act in relation to the goods which rendered them liable to confiscation. As a customs house agent, the appellant submitted the Bills of Entry on the basis of documents provided by the importer. Learned counsel also pointed out that the goods were cleared after proper examination and after testing and, therefore, it cannot be alleged that there was any act or omission on the part of the appellant which would render such goods liable to confiscation under section 111 of the Customs Act.
10. Shri Mukesh Kumar Shukla, learned authorized representative appearing for the department supported the impugned order and submitted it does not call for any interference in this appeal.
11. In the appeal filed by the importer - S.S. Corporation, being Customs Appeal No. 51008 of 2021 this Bench, by order of date, set 5 C/50855 OF 2021 aside the confiscation of goods, demand of duty and imposition of penalty upon S.S. Corporation under section 112 of the Customs Act.
12. The appellant is merely a customs house agent. He had submitted the four Bills of Entries on the basis of the documents provided by the importer. The finding that the appellant helped the importer to avail the DFIA licence so as to utilize them for clearing the goods is merely an allegation without there being any evidence to substantiate the same. As submitted by the appellant, it was the importer who had obtained the DFIA licences after making payment and the appellant had no role. It cannot, therefore, be contended that the appellant, in relation to the goods, did any act or omission which rendered the goods liable to confiscation.
13. The imposition of penalty upon the appellant is, therefore, not justified. It is, accordingly, set aside and the appeal is allowed with consequential relief(s).
(Dictated and pronounced in open court.) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL) PK