Karnataka High Court
Principal Commissioner Customs, ... vs M/S Orbit Trans Express And Freight Pvt ... on 26 September, 2025
Author: S.G.Pandit
Bench: S.G.Pandit
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CSTA No. 8 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF SEPTEMBER, 2025
PRESENT
THE HON'BLE MR. JUSTICE S.G.PANDIT
AND
THE HON'BLE MR. JUSTICE K. V. ARAVIND
CUSTOMS APPEAL No. 8 OF 2024
BETWEEN:
1. PRINCIPAL COMMISSIONER CUSTOMS,
BANGALORE,
AIRPORT AND AIR CARGO COMPLEX,
COMMISSIONERATE, MENZIES,
AVIATION BOBBA BUILDING,
DEVANAHALLI, BANGALORE URBAN,
KARNATAKA-560300.
...APPELLANT
(BY SRI UNNIKRISHNAN M., ADVOCATE)
Digitally signed
by VALLI AND:
MARIMUTHU
Location: HIGH
COURT OF 1. M/S ORBIT TRANS EXPRESS AND
KARNATAKA
FREIGHT PVT. LTD.,
HAVING ITS REGISTERED OFFICE
AT No.6/1, 11TH CROSS,
4TH MAIN, S. R. NAGAR,
BENGALURU 560 027,
REPRESENTED BY DIRECTOR.
...RESPONDENT
(BY SRI NAGARAJ G. E., ADVOCATE)
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CSTA No. 8 of 2024
THIS CSTA / CUSTOMS APPEAL IS FILED UNDER
SECTION 130 OF THE CUSTOMS ACT, PRAYING TO ALLOW THE
APPEAL AND SET ASIDE THE ORDERS PASSED BY THE HON'BLE
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
BANGALORE, IN DATED 30.04.2024 IN CUSTOMS APPEAL
No.20767/23 VIDE ANNEXURE A AND CONFIRM THE ORDER IN
ORIGINAL No. 293/2023-24 AP AND ACC DATED 27.09.2023
PASSED BY THE PRINCIPAL COMMISSIONER OF CUSTOMS,
BANGALORE.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 17.09.2025, THIS DAY K. V. ARAVIND J.,
PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE S.G.PANDIT
and
HON'BLE MR. JUSTICE K. V. ARAVIND
C.A.V. JUDGMENT
(PER: HON'BLE MR. JUSTICE K.V. ARAVIND)
Heard Sri.Unnikrishnan M., learned counsel for the
appellant and Sri.G.E. Nagaraj, learned counsel for the
respondent.
2. The appeal by revenue under Section 130 of the
Customs Act, 1962, challenging the Final Order
No. 20319/2024 dated 30.04.2024 passed by the Customs,
Excise and Service Tax Appellate Tribunal, Bangalore (for short
'CESTAT').
3. The following substantial questions of law were
admitted on 13.08.2025:
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CSTA No. 8 of 2024
"(i) Whether the respondent is liable to for
penalty under Section 117 of the Customs Act
1962 and also under Regulation 14 of the
Courier Imports and Exports (Electronic
Declaration & Processing) Regulation, 2010?
(ii) Whether the Tribunal could interfere and
set aside a validity executed contract like Bank
Guarantee which are guided by the provisions
of the Indian Contract Act being an
independent contract executed by a Financial
Institution which stipulates that payment has
to be made without any demur?
(iii) Whether the Hon'ble Tribunal could
exercise discretion on the ground of equity
and reduce the penalty which is not provided
in law?"
4. The respondent was granted a license as an
authorized courier agent by the Airport & Air Cargo
Commissionerate, Bengaluru. The investigation conducted by
the revenue intelligence found that M/s. K.T. Technologies, New
Delhi, imported goods through Bengaluru Airport by
misdeclaring the value. The respondent has acted as an
authorized courier agent in respect of the alleged imported
goods. In the course of investigation, M/s. K. T. Technologies,
represented by Ms.Kajal Thakur, contended that GSTIN was
created without her knowledge and used for the clearance of
the goods. Initially, Ms. Kajal Thakur disowned the imported
goods. However, during the investigation, they owned up to
the imported goods and paid duty, interest, and penalty as
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CSTA No. 8 of 2024
determined. Thereafter, the authorities released the goods in
her favor.
5. The proceedings against the respondent continued
for violation of the Courier Imports and Exports (Electronic
Declaration and Processing) Regulations, 2010 (for short '2010
Regulations'). After a detailed inquiry, a show-cause notice
was issued inviting a response from the respondent. The
respondent filed a reply to the show-cause notice. Show-cause
proceedings came to be concluded by determining the violation
of the 2010 Regulations and the provisions of the Customs Act,
1962 (for short, 'the Act'). Accordingly, the authorized courier
license issued to the respondent came to be revoked under
Regulation 13 of the 2010 Regulations, and the bond and bank
guarantee executed were ordered to be enforced. Additionally,
a penalty of Rs.50,000/- for violation of Regulation 14 of 2010
Regulations and Rs.50,000/- for violation of Section 117 of the
Act came to be levied.
6. The CESTAT under the impugned order proceeded
to hold that the respondent has acted in the capacity of a
facilitator of the customs transactions. The respondent had no
mens rea to commit any illegality; hence, the imposed penalty
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CSTA No. 8 of 2024
is unsustainable. The CESTAT further held that the revenue
commenced proceedings as bogus imports were made in the
name of M/s. K.T. Technologies. Ms. Kajal Thakur initially
denied the consignment. However, subsequently, claimed
ownership of seized goods and paid duty, interest, and penalty,
and got the shipment released. In that view, the allegation of
fraud using dummy and bogus imports is unsustainable. In
that view, the CESTAT held that there is no violation of
Regulation 12. The CESTAT further held that once the importer
is identified, duty, interest and penalty is accepted, the revenue
cannot turn around and allege bogus import. Accordingly, the
CESTAT set aside the order, revocation of the authorized
courier license, order to enforce the bond and bank guarantee,
and also set aside the penalty imposed under the 2010
Regulations as well as under the Act.
7. We have heard Sri. Unnikrishnan M., learned
counsel for the appellant, and Sri. G.E. Nagaraj, learned
counsel for the respondent. Today we have passed judgment
in CSTA No.7/2024 involving identical facts, and some of the
parties involved in the alleged transactions are also the same.
Learned counsel for the respondent has reiterated the
contentions raised by learned counsel in CSTA No.7/2024. In
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CSTA No. 8 of 2024
CSTA No.7/2024, after detailed consideration of the contentions
urged, we have modified the order of the CESTAT only to the
extent of restoring the penalty imposed under the 2010
Regulations and the penalty under Section 117 of the Act. As
the facts and the legal issues are identical to the above-
referred case, we deem it appropriate to dispose of this appeal
in terms of the judgment in CSTA No.7/2024, which we have
pronounced today.
8. Accordingly, the following:
ORDER
(i) Appeal is allowed-in-part.
(ii) The order of the CESTAT is set aside to the extent stated above.
(iii) Substantial questions of law Nos.1 and 3 are answered in favour of the appellant and against the respondent.
(iv) Substantial question No.2 does not arise from the order of the CESTAT. Hence, same is not answered.
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(v) Penalty of Rs.50,000/- under Regulation 14 of 2010 Regulations is restored. Penalty of Rs.50,000/- imposed under Section 117 of the Act is restored.
(vi) No order as to costs.
Sd/-
(S.G.PANDIT) JUDGE Sd/-
(K. V. ARAVIND) JUDGE VBS