Custom, Excise & Service Tax Tribunal
M/S Shri Balaji Logistics vs C.C. Noida on 16 April, 2026
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.II
(E-Hearing)
Customs Appeal No.70096 of 2026
(Arising out of Order-in-Appeal No.NOI-EXCUS-000-APP-30-25-26 dated
25/04/2025 passed by Commissioner (Appeals) Customs, Noida)
M/s Balaji Logistics, .....Appellant
(S-35/5, DLF Phase-III, Gurgaon)
VERSUS
Commissioner of Customs, Noida ....Respondent
(Concor Complex, Greater Noida) APPEARANCE:
Ms Surabhi Chandani, Advocate for the Appellant Smt Chitra Srivastava, Authorised Representative for the Respondent CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.70136/2026 DATE OF HEARING : 16 April, 2026 DATE OF DECISION : 16 April, 2026 SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Appeal No.NOI- EXCUS-000-APP-30-25-26 dated 25/04/2025 passed by Commissioner (Appeals) Customs, Noida. By the impugned order following has been held:-
"ORDER
I, hereby, reject the Appeal No.
146/CUS/NOIDA/APPL/NCUS/2024-25 dated 08.07.2024
filed by M/s Shri Balaji Logistics, S-35/5, DLF Phase-III, Gurgaon and uphold the impugned order to the extent of imposition of penalty of Rs. 50,000/- under Section 112 of the Customs Act, 1962 upon the appellant (M/s Shri Balaji Customs Appeal No.70096 of 2026 2 Logistics) only and remaining part of the impugned order is out of the purview of this order."
2.1 Appellant is a customs broker, who filed Bill of Entries for importation of goods by M/s Arjun Steel having IEC No.516940856 as detailed in table below:-
SI. BE No. Date Goods CHA Supplier
No.
1 5746312 19.11.2019
Cold Rolled MH Megah Maju
2 4598592 22.08.2019
Stainless M/s. Shri Enterprises 25-2
3 5252611 11.10.2019 Steel Balaji Lorong Batu Nilam 5,
4 5345700 18.10.2019 Coils J3 Size Logisicts Bukit Tinggi 41200
0.26 (Appellant) Klang Selangor,
5 5570509 06.11.2019 Malaysia
MM
6 5987031 07.12.2019
2.2 On the Bills of Entry exemption from payment of basic
customs duty as per Sl. No.967-(I) of the Notification
No.46/2011-Cus dated 01.06.2011, as amended from time to time under ASEAN-India Free Trade Agreement was claimed, on the basis of the country of origin certificate purported to be issued by the Secretary General, Ministry of International Trade and Industry Malaysia.
2.3 Verification of the Certificate of Origin was conducted. By the letter of OSD (FTA Cell), CBIC dated 07.10.2021 issued under F.No.466/11/2021-FTA-II, it was informed that the certificate of origin submitted by the importer was not authentic and had not been issued by the Ministry of International Trade and Industry of Malaysia.
2.4 A Show cause notice No.07/2022 dated 27.07.2022 was issued to the importer calling them to show cause as to why,-
a. The impugned goods having assessable value (in total) Rs 1,52,01,235/- imported vide Bills of Entry mentioned at para 1 should not be confiscated under Section 111(m) and 111(o) of the Customs Act, 1962.
b. The duty of Custom amounting to Rs 14,79,841/- should not be demanded and recovered from them along with applicable interest under sub-section (4) of Section 28 read along with Section 28A of the Customs Act, 1962.
Customs Appeal No.70096 of 2026 3 c. A penalty should not be imposed upon them under Section 112 and/ or 114A of the Customs Act, 1962.
d. A penalty should not be imposed upon them under Section 114AA of the Customs Act, 1962.
2.5 Appellant was also called upon to show cause as to why,-
a. A penalty should not be imposed upon them under Section 112 of the Customs Act, 1962.
2.6 The show cause notice was adjudicated as per the Order- in-Original No.07/ADC/NOIDA-CUS/2024-25 dated 30.05.2024 holding as follows:
"ORDER
8. In view of the above discussion and findings, I pass the following Order: -
i. I hereby reject the Country of Origin Certificates as a valid document issued as per Notification No.46/2011-Cus Dated 01.06.2011 read with Notification No. 189/2009-Customs (N.T.), dated 31st December, 2009 submitted by the Importer/Custom Broker purposefully, knowingly or intentionally for fraudulently claiming and availing Customs duty benefit covered under Bills of Entry as detailed in Table- 2 supra;
ii. I confirm demand of differential Customs duty amounting to Rs. 14,79,841/-(Rupees Fourteen Lach Seventy Nine Thousand Eight Hundred Forty One Only) under Section 28(4) of Customs Act 1962. However, as the duty of Rs.14,79,841/-has already been deposited by M/s Arjun Steel, therefore, the same is appropriated against the differential Customs duty;
iii. I hold that the proceedings for confirmation of Customs Duty amounting to Rs. 14,79,841/-(Rupees Fourteen Lakh Seventy Nine Thousand Eight Hundred Forty One Only) under Section 28(4) along with interest under Section 28AA and penalty under Section 112/114A and 114AA of the Customs Act, 1962 against the Importer M/s Arjun Steel are deemed to be concluded under Section 28(6)(i) of the Customs Act, 1962 Customs Appeal No.70096 of 2026 4 as the Importer paid the differential Customs duty of Rs. 14,79,841/-along with interest of Rs.4,95,898/-and penalty of Rs.2,21,976/-@15% vide TR-6challan No. 561 dt. 13.01.2022 and Challan No. 1596 dt. 24.08.2022 within stipulated time period of thirty days.
iv. I hereby impose penalty of Rs.50,000/-(Rupees Fifty Thousand Only) on Customs Broker M/s.Shri Balaji Logistics S-35/5, DLF Phase-III Gurugram under Section 112 of the Customs Act, 1962."
2.7 Aggrieved appellant have filed appeal before Commissioner (Appeals) which has been dismissed as per the impugned order referred in para 1 above.
2.8 Aggrieved appellant have filed this appeal.
3.1 I have heard Ms Surabhi Chandani, Advocate for the appellant and Ms Chitra Srivastava Authorised Representative for the revenue.
3.2 Arguing for the appellant learned Counsel submits that- Appellant was only a CHA and has filed the documents as provided to him by the importer while filing these documents he complied with all the requirements under the Customs Broking CBLR, 2018 and he has undertaken proper KYC as expected to him. In the case, penalty should not be imposed on him as he has exercised due diligence on his part, as has been held in following cases:-
o Joshy M.J. Vs CC, Noida 2019 (369) ELT 1507 (Tri.- Allahabad);
o Freight Link Logistics Vs CC, Chennai 2022 (382) ELT 391 (T);
o G. Narayan & Co. Vs CC, Mangalore 2021 (378) ELT 298 (Tri.-Bang.);
o M/s M.S. Exim Services Vs CC, Ludhiana 2021 (377) ELT 615 (Tri.-Chan.);
Nothing has been brought on record to show that appellant had any malafide intention or knowledge about the fact certificate of origin provided by the importer. Penalties Customs Appeal No.70096 of 2026 5 should hot has been imposed for this reason on him, as has been held in following decisions:-
o CC, (Import) Vs M/s Trinetra Impex Pvt. Ltd. 2020 (372) ELT 332 (Del.);
o M/s Rajeev Khatri Vs CC, (Import) 2023 (9) Centax 412 (Del.);
o M/s Global Star Logistics (CHA) Vs CC, Tuticorin 2019 (370) ELT 675 (Tri.-Chennai);
o Prakash Poonia Vs CC, Kandla 2010 (252) ELT 442 (Tri.-Ahmd.);
3.3 Learned Authorised Representative reiterates the findings recorded in the orders of the lower authorities.
4.1 I have considered the impugned orders along with the submissions made in appeal and during the course of argument.
4.2 For upholding Order-in-Original, impugned order records as follows:-
"7. I find that the adjudicating authority has imposed penalty under the above Section by holding that the appellant failed to advise to the importer in respect of correct submission of requirements of documents i.e. COO certificate and did not exercise due diligence in imparting the correct information to the importer. The adjudication authority has held that a lot of trust has been placed upon the Custom Broker in a regime of trade facilitation, who acts as a vital link between the Customs department and Importer/exporter however, in the present case, the Customs Broker has failed to advise to the importer in respect of submission of correct documents i.e. COO Certificate and did not exercise due diligence in imparting the correct information to the importer. The adjudicating authority has also added that in the instant case, expression 'abet' in Section 112(a) of the Customs Act, 1962 makes it implicit that the person charged, who is alleged to have abetted the acts of omission or commission, has knowledge and is aware of the said acts, therefore the appellant has failed to discharge their duties Customs Appeal No.70096 of 2026 6 and responsibilities cast upon them as Customs Broker and are liable for penal action under Section 112(a) of the Customs Act, 1962.
8. Before deciding the moot question of this appeal i.e. imposition of penalty under Section 112(a) of the Customs Act, 1962 on the appellant who acted in the instant case as Customs Broker; it is imperative to examine role and responsibility of Customs House Agents (CHA) / Customs Brokers (CB). I find that CHAS/CBs are engaged by the importer/exporter for clearance of the goods from customs fold. Customs clearances which are given affect by the Customs Broker includes assessment, examination of export/import goods and clearance thereof as per extant provisions of law. For aforementioned Act, they are duly authorized by the importer/exporter to act on their behalf. The liability of principal and agent has been dealt in Section 147 of the Customs Act, 1962, which reads as under;
"Section 147 in the Customs Act, 1962
147. Liability of principal and agent:-
(1) Where this Act requires anything to be done by the owner, importer or exporter of any goods, it may be done on his behalf by his agent.
(2) Any such thing done by an agent of the owner, importer or exporter of any goods shall, unless the contrary is proved, be deemed to have been done with the knowledge and consent of such owner, importer or exporter, so that in any proceedings under this Act, the owner, importer or exporter of the goods shall also be liable as if the thing had been done by himself.
(3) When any person is expressly or impliedly authorized by the owner, Importer or exporter of any goods to be his agent in respect of such goods for all Customs Appeal No.70096 of 2026 7 or any of the purposes of this Act, such person shall, without prejudice to the liability of the owner, Importer or exporter of such goods for such purposes: Provided that where any duty is not levied or is short-levied or erroneously refunded on account of any reason other than any willful act, negligence or default of the agent, such duty shall not be recovered from the agent unless in the opinion of 1[Assistant Commissioner of Customs or Deputy Commissioner of Customs] the same cannot be recovered from the owner, importer or exporter.
8.1 Plain reading of the section reveals that under the authorization of owner importer or exporter, the Customs Broker may affect the Customs transaction. Sub-section 147(2) provides that the liability would also be incurred by owner, importer or exporter when the act is done with their consent and knowledge by the CHA/CB. In view of this, the Custom Broker is liable for the omission/commission, as they are conducting business on their behalf in pursuance of their business interest under some authorization, as mandated by CBLR, 2018. 8.3 However, sometimes these clearances of cargo are found not in accordance with law due to mis-declaration of cargo in description, quantity, classification, wrong availment of exemption notification etc. In such cases, for the omission or commission of act or rules made thereunder, penalty is imposed on importer/exporter/owner of the goods for abetting the act of exporter. Here question arises whether penalty is imposable on Customs Broker in each and every case of omission/commission or only in cases of prior knowledge of omission/commission.
9. I observe that the Custom Broker occupies a very important position in the Customs working and is supposed to safeguard the interest of Importer/exporter and Customs department both in a lawful manner. The very Customs Appeal No.70096 of 2026 8 purpose of granting a licence to a person to act as a Customs House Agent is for transacting any business relating to the entry or departure of conveyance or the import or export of goods in any Customs station. For that purpose, under Regulation 9 of CBLR 2018, necessary examination is conducted to test the capability of the person in the matter of preparation of various documents determination of value procedures for assessment and payment of duty, the extent to which he is conversant with the provisions of certain enactments, etc. Therefore, the grant of licence to act as a Custom House Agent has got a definite purpose and intent. On a reading of the Regulations relating to the grant of licence to act as CHA, it is seen that while CHA should be in a position to act as agent for the transaction of any business relating to the entry or departure of conveyance or the import or export of goods at any Customs station, he should also ensure that he does not act as an Agent for carrying on certain illegal activities of any of the persons who avail his services as CHA. In such circumstances, the person playing the role of CHA has got greater responsibility. The very description that one should be conversant with the various procedures including the offences under the Customs Act to act as a Custom House Agent would show that while acting as CHA, he should not be a cause for violation of those provisions. A CHA cannot be permitted to misuse his position as CHA by taking advantage of his access to the Department. The grant of licence to a person to act as CHA is to some extent to assist the Department with the various procedures such as scrutinizing the various documents to be presented in the course of transaction of business for entry and exit of conveyances or the import or export of the goods. In such circumstances, great confidence is reposed in a CHA. Any misuse of such position by the CHA will have far reaching consequences in the transaction of business by the Customs house officials.
Customs Appeal No.70096 of 2026 9 Therefore, when, by such malpractices, there is loss of revenue to the custom house, there is every justification for the respondent in treating the action of the applicant as detrimental to the interest of the nation.
10. From the facts narrated in the impugned Order-in- Original, it appears that in compliance of CBEC Instruction No. 31/2016-Customs dated 12.09.2016, which stipulates that Country of Origin verification may also be undertaken on random basis as a measure of due diligence on the basis of various factors such as the quantum of duty being foregone, the nature of goods, vis-à-vis the Country of Origin, commodities that are prone to mis-declaration of county of origin, compliance record of the importer etc., the COO Certificate, presented by the importer in support of the exemption claimed by them, in respect of imports under AIFTA, made under the impugned B/E was sent to CBIC for verification. Further, I also note that the adjudicating authority, referring to the CBIC's letter dated 07.10.2021, has held that the COO Certificates presented by the appellant on behalf of the importer, are not authentic as the same was not issued by the MITI of Malaysia and hence not eligible for availing the exemption under the Notification No. 46/2011 dated 01.06.2011. 10.1 I find that since the CBIC has confirmed that the COO Certificates in respect of the subject consignments are not authentic, therefore, the exemption of preferential tariff rate, claimed by the importer on the basis of such a COO Certificates, has been correctly denied by the Customs department.
10.2 I further find that the appellant has failed to ensure authenticity of COO certificate in terms of Section 46(4) of the Customs Act, 1962. The said material facts came to the knowledge of the department only when the CBIC vide their letter dated 07.10.2021 informed that the impugned COO certificates are not authentic and had not been issued by the Ministry of International Trade & Industry (MITI) of Customs Appeal No.70096 of 2026 10 Malaysia in terms of instruction No. 31/2016-Customs dated 12.09.2016 that the COO certificates verification may be undertaken on random basis. Had the verification of the impugned COO certificate not done by the respondent department, short payment of Customs duty in the guise of fake COO certificate would have not been unearthed by the respondent department. In view of this, the Custom Broker is liable for omission/commission, as in the present case, the appellant is conducting business on behalf of the importer in pursuance of their business interest under some authorisation by the importer. Hence provisions of Customs Act, 1962 are applicable in the present case.
10.3 I find that in the present regime of liberalization, self- assessment and filing of returns online, the said appellant failed to provide correct information to the department and therefore the department would come to know about such incorrect information only during the verification conducted by the CBIC. As already held above that the appellant cannot be presumed to have acquired a wrong interpretation of the legal provisions, and thus is definitely a deliberate non-disclosure of correct fact and as such suppression of fact. As the Importer had indulged into suppression with the intent to avail wrong Customs duty benefit based upon invalid document i.e. fake COO certificate. These facts came into notice of the Revenue only when the verification of the said COO certificate was conducted by the department.
11. In the present case, it is evident that the appellant has filed false and incorrect Country of Origin (COO) Certificates on behalf of the importer with the sole intention to evade the payment of duty in the guise of a genuine COO certificate. In the present era of self- assessment of duty, the appellant was completely responsible to submit only genuine documents before the Customs authorities whereas in the present case, the Customs Appeal No.70096 of 2026 11 appellant failed to comply with their responsibility to submit genuine COO certificates and mis-stated and suppressed the facts in the impugned Bill of Entry by way of submission of a fake/false COO certificate. Thus, the appellant is liable to be penalized under the provisions of Section 112 of the Customs Act, 1962.
12. In most of the Customs cases, during investigation and at the time of issuance of SCN, often investigating Officers and Adjudicating Authorities are seen grappling with the issue of proposal and imposition of penalty under Section 112, 114 or 117 of the Customs Act, 1962 on the CHA/CB. In view of this, it is a matter of discussion whether only absolute liability will be fastened on CB/CHA or as to whether importer/exporter or owner is vicariously liable for the omission/commission, as CB/CHA is conducting business on their behalf in pursuance of their business interest under some authorization, as mandated by Regulation 10(a) of CBLR, 2018.
12.1 In the above context I find that it is of utmost importance to understand that the Customs law is a Civil Proceedings barring Chapter XVI which deals with "Offence and Prosecution". In civil law any violation is punishable with corresponding penal provisions irrespective of the animus. In other words, even if the act is bereft of criminal intention, damage has been caused, therefore imposing penalty is equivalent to recovering compensation. Therefore, regardless of intention, penal clause is attracted for the act of omission and commission by the offender. 12.2 I am also of the opinion that, with regard to imposition of penalty on CHA/CB, his/her omission/commission will attract penalty as during the clearance work of importer / exporter, the Custom Broker acts on behalf of the importer/exporter and the CB is bound to facilitate the authorized clearance work of importer/exporter. Therefore, as CHA/CB is only facilitating the customs transaction on behalf of principal Customs Appeal No.70096 of 2026 12 (importer/exporter), therefore, the Customs Broker is liable to be penalize under the provisions of Customs Act, 1962.
12.3 For better understanding of the fact, let us suppose that an importer has imported certain goods and after clearance of the imported goods, on post verification of documents, some documents were found invalid/not authentic then on detection, question is whether CHA/CB will be punishable along with importer or importer alone or CHA/CB only. The answer lies in finding out whether CHA/CB has facilitated the transaction with any prior knowledge of any such mis-declaration as discussed above. If the answer is affirmative, penalty is imposable on both CB and importer both by considering that the CHA/CB has facilitated the transaction with knowledge, means as an agent he abetted the act of principal. I find that in the present case, the importer has used the false/fake COO certificate to avail the exemption from payment of duty and thus used document which is false or incorrect and have mis-stated the country of origin as Malaysia in the subject Bill of Entry with the intent to evade payment of Customs duty. The above act of the importer is clearly liable to be penalized under the Section 114AA of the Customs Act, 1962.
13. I observe that the appellant has pleaded that they has been in this field for more than 10 years and has not been found to have contravened any provisions of Customs Act and has got an unblemished track record. In this context, I find that several Orders have been issued by the department in the similar cases against the appellant during the previous 1-2 years finding the appellant as guilty and penalty was also imposed upon the appellant in all such cases by the department. Out of above stated cases, appeals have been filed by the appellant before this office during the previous financial year itself. From the above, it is clear that such matter have also occurred in Customs Appeal No.70096 of 2026 13 past period however, the appellant has not tokenany preventive measure/checks to prevent repetition of such matters. It clearly shows the lethargic approach of the appellant towards discharging their duties promptly as CB.
14. The act of CHA/CB is covered under definition of abetment given under General Clauses Act, 1897 and IPC, 1860. The word abetment is not defined in the Customs Act, therefore the meaning assigned to it in Section 3(1) of the General Clauses Act, 1897 and under Section 107 of the Indian Penal Code, would be taken. An abetment would include by definition intentional aiding. In other words, the imposition of penalty on CB is warranted, when there is a case of collusion/connivance. In the present case, it is clear that the CB has filed the fake COO certificates before the Customs authorities on behalf of the importer with the sole intention to provide undue benefits to the Importer. Thus, the appellant is liable to be penalized in the present case.
15. In the present case, Show Cause Notice is issued to the Importer and the Customs Broker for demand of Customs duty under Section 28(4) along with interest under Section 28AA and penal action under Section 112, 114A and 114AA of the Customs Act, 1962 in addition to proposed confiscation of goods under Section 111(m) and 111(0) of the Customs Act, 1962. The impugned differential Customs duty, involved in 06 Bills of Entry has been confirmed under Section 28(4), along with interest and penal action under Section 114A & 114AA of the Customs Act, 1962 has been invoked upon the importer in the present case. In view of the entire facts stated above, I find that the penalty under Section 12 of the Customs Act, 1962 is rightly imposed upon the appellant."
4.3 I find that appellant is a custom broker with eligibilities as provided under Customs Act and CBLR, 2018 to insure the correctness of the documents to be filed for undertaking directions with the Customs. He is required to insure due Customs Appeal No.70096 of 2026 14 diligence while filing these documents with the Customs and should cause necessary verification in form of KYC, address verification etc. He would not be made responsible for determining the documents which are to be provided to him for being filed with Customs are forged or fake. In fact he has no means to verify authenticity of certificate of origin on the basis of which the benefit of exemption was claimed by the importer. It was only on the basis of the verification caused by the customs authorities with the concern authorities in Malaysia that it was found that the Certificate of Origin was fake and was not issued by the authorities in Malaysia. That being so I find that appellant was having any malafide intention or mensrea while filing these documents nor was he gaining anything. Bangalore Bench of this Tribunal in the case of G. Narayan & Co. Vs CC, Mangalore 2021 (378) ELT 298 (Tri.-Bang.) has held as follows:-
"6.After considering the submissions of both the parties and on perusal of the record, I find that the Revenue has not been able to bring any evidence on record which shows that the appellant had prior knowledge regarding the violation of the provisions of the Customs Act. Further I find that this Tribunal in its Final Order No. 20523/2019, dated 4-7-2019 reduced the penalties imposed on the passenger after holding that there was no suppression of facts by the passenger. Once the passenger has not suppressed any material fact then how it can be said that the appellant has abetted the passenger in the commission of certain violation of the Customs Act. Further I find that in the case of Triways Transportation Pvt. Ltd. v. Commissioner of Customs, New Delhi - 2018 (363) E.L.T. 1027 (Tri. - Del.) wherein it was held that penalty under Section 112(a) of the Act is not imposable on the CHA when no proceedings are initiated against him under the Customs Brokers Licensing Regulations, 2013. In the present case, no proceedings were initiated against the appellant under the Customs Broker Licensing Regulations, 2013. Moreover, issuance of show cause notice in de novo Customs Appeal No.70096 of 2026 15 remand proceedings is not permitted under law. In view of my discussion above, I am of the considered opinion that in the facts and circumstances of the present case, the imposition of penalty of Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand only) on the appellant is not sustainable in law and therefore I set aside the same by allowing the appeal of the appellant."
4.4 Chandigarh Bench of this Tribunal in the case of M/s M.S. Exim Services Vs CC, Ludhiana 2021 (377) ELT 615 (Tri.-Chan.) has held as follows:-
"6.I find that in show cause notice, the allegation against the appellant is that the appellant being customs broker had filed 4 bills of entry for clearance of consignment of cold rolled coil (non-alloy) and cold rolled sheets (non- alloy) of prime nature which were found on examination as secondary and defective nature and the appellant being an experienced customs broker was expected to understand the difference between prime material and secondary & defective material. Therefore, he has made a false declaration in respect of the said import consignment.
7.Admittedly, no where it has been placed on record that the appellant was having prior knowledge of defective/secondary material. In fact, in the invoices, high-
seas agreements, test certificates, it is mentioned that the material is of prime nature. Moreover, whatever documents have been supplied to the appellant by the importer, the appellant has filed bills of entry for clearance. On the basis of those documents merely being the appellant an experienced person it cannot be alleged that the appellant was having mala fide intentions for clearance of the said goods by misdeclaring the same. The Revenue has failed to establish against the appellant that he has omitted to do any act which act or omission would render the such goods liable to confiscation. The Revenue has further failed to establish the fact that the appellant Customs Appeal No.70096 of 2026 16 abats the doing omission of the act which would render the goods liable for confiscation.
8.A similar issue came in the knowledge of the Hon'ble Delhi High Court in the case of Trinetra Impex Pvt. Ltd. (supra) where the Hon'ble High Court has held as follows :-
In the present case, there is no element of mens rea or conscious knowledge which can be attributed to the CHA. The investigation carried out by the CBI and other facts reveal that the CHA acted bona fide and merely facilitated the imports on the strength of the documents which were handed over to him by the importer. There is no sufficient material on record to show that the CHA was actively involved in the fraudulent availment of the exemption by the importer, warranting levy of personal penalty. Therefore, we do not find any ground to interfere with the findings of the Tribunal vis-a-vis the respondent.
Therefore, the penalty is imposable on the appellant.
9.Further, in the case of P.S. Bedi & Company (supra) this Tribunal again has observed as under :-
Considering the submissions, I note that, 5. before proceeding to impose a penalty on the CHA under Section 112(a) of the Customs Act, it is incumbent on the Departmental authorities to record a finding in the first instance that some commission or omission of the CHA had rendered the goods confiscable. Such a finding is not forthcoming in the order of the Deputy Commissioner or that of the Commissioner (Appeals). In the absence of such a finding, penalty cannot be imposed under Section 112(a) of the Act. The adjudicating authority has not even mentioned the provision of law under which the penalty was imposed. The order of the adjudicating authority has been upheld by the lower appellate authority. This is a clear case of non-application of mind on the part of the Commissioner (Appeals), to the findings of the Customs Appeal No.70096 of 2026 17 adjudicating authority. I further observe that, apart from stating that the case law relied on by the appellant is not relevant the Commissioner (Appeals) has not stated as to why the case law was not relevant. The impugned order is, therefore, not a speaking order on the point.
10.Further, the case laws relied by the Ld. AR are not relevant to the facts of this case as in those case, it is in the knowledge of CHA regarding the description of goods before filing the shipping bills. There is no allegation in the show cause notice in respect of the test certificate produced by the appellant. The mere allegation is that the appellant being an experienced person should know the difference between prime and secondary/defective material. The act of filing the test certificate shows that the appellant has no mens rea and filed the documents being a bona fide facilitator.
11.In view of the above discussion, no penalty is imposable upon the appellant, therefore, the penalty imposed on the appellant under Section 112 along with 114AA of the Customs Act, 1962 is set aside and the appeal is allowed with consequential relief, if any."
4.5 Hon'ble Delhi High Court in the case of CC, (Import) Vs M/s Trinetra Impex Pvt. Ltd. 2020 (372) ELT 332 (Del.) has held as follows:-
"10. Now coming to the facts of the present case. The facts noted above are not disputed before us, however, the Customs Department is aggrieved by the deletion of the penalties imposed on the CHA. In respect of the show cause notice dated 6-3-2013, penalty has been imposed under Section 112(b) as well as 114AA of the Act. A perusal of the said provisions clearly reveals that the penalty under the said provisions can be imposed wherever there is an element of mens rea or conscious knowledge, which is a sine qua non for imposition of the penalty. This is evident from a plain reading of Sections Customs Appeal No.70096 of 2026 18 112 and 114AA of the Act, which uses the expressions "does or omits to do" , "or abets the doing or omission of such act", "which he knows or has reason to believe are liable to confiscation under Section 111"- in Section 112 and "knowingly or intentionally" in Section 114AA. The facts of the case in hand do not reveal any such element of mens rea or conscious knowledge qua the importer. There is no active role attributed to the respondent, which justifies the imposition of the penalty under Section 112(b) and Section 114AA of the Act. Nothing has emerged even in the criminal investigation.
11. In respect of the show cause notice dated 8-7-2011, the imposition of the penalty has been made under Section 112(a) of the Act in respect of the goods which have been held to be liable to be confiscated under Section 111 of the Act. Here, the imposition of the penalty on the CHA is founded on the ground that he has abetted the offence. Though, for imposition of penalty in respect of the cases falling under Section 112(a) of the Act, mensrea may not be required to be proved as condition precedent, however, when it comes to imposition of the penalty on an abettor, it is necessary to show that the said essential element/ingredient is present. [Ref.: Amritlakshmi Machine Works v. The Commissioner of Customs (Import), [2016 SCC OnLine Bom 66 = 2016 (335) E.L.T. 225 (Bom.)].
12. In the present case, there is no element of mens rea or conscious knowledge which can be attributed to the CHA. The investigation carried out by the CBI and other facts reveal that the CHA acted bona fide and merely facilitated the imports on the strength of the documents which were handed over to him by the importer. There is no sufficient material on record to show that the CHA was actively involved in the fraudulent availment of the exemption by the importer, warranting levy of personal penalty. Therefore, we do not find any ground to interfere with the findings of the Tribunal vis-à-vis the respondent."
Customs Appeal No.70096 of 2026 19 4.6 Hon'ble Delhi High Court in the case of M/s Rajeev Khatri Vs CC, (Import) 2023 (9) Centax 412 (Del.) has held as follows:-
"20. The Tribunal had appreciated the facts and had found that there was no case of connivance established against the appellant and that he had unknowingly abetted or been instrumental in the import of the prohibited goods by the actual importer - Sh. Ramesh Wadhera. The concluding paragraph of the impugned order is set out below:
"26. Further, the appellant under the influence of Mr. Deepak Kapoor, filed the bills of entry without completing the KYC formalities. Further, from the appreciation of the facts and on perusal of the impugned order, it is evident that no case of connivance is made out against the appellant/employee i.e. no allegation or finding of any additional gain or reward received by him. At best, it appears that this appellant has unknowingly abetted or been instrumental in the nefarious activity of the import of the prohibited goods, by the actual importer - Mr. Ramesh Wadhera, and the lender of the IEC code. In this view of the matter, I find that the penalty imposed is very high and disproportionate to the offence by this appellant. Accordingly, the penalty imposed under section 112(a) of the Customs Act is reduced from Rs. 34,14,020/- to Rs. 10,00,000/-. This appeal is allowed in part. The appellant is entitled to consequential benefit."
REASONS AND CONCLUSION
21. The Revenue does not contest the finding of the Tribunal that no case of connivance has been made out against the appellant and that he had no knowledge that the goods sought to be imported were prohibited and their import was illegal.
Customs Appeal No.70096 of 2026 20
22. Thus, in view of the above, the principal question to be addressed is whether a person, who has no knowledge that the goods imported are liable for confiscation, can be mulcted with penalty under section 112(a) of the Customs Act for abetting such an offence.
23. In terms of Section 112(a) of the Customs Act, penalty for improper importation of goods is chargeable from any person specified in Clauses (a) and (b) of the said Section. For the purposes of the present controversy, clause (a) of Section 112 of the Customs Act is relevant and is reproduced below:
"112. Penalty for improper importation of goods, etc. Any person--
(a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act"
24. It is clear from the above that Section 112(a) of the Customs Act includes two category of persons, who may be liable for fine. The first category of persons are those who, in relation to any goods, do or omit to do any act which renders the goods liable for confiscation under section 111 of the Customs Act. The second category of persons comprises of those who abet the doing or omission of such acts. In the present case, penalty has been imposed on the appellant on the allegation that he had abetted the acts of misdeclaration, importation of prohibited goods and not of committing those acts.
25. Ms Narain, learned counsel who appeared for the Revenue contended that penalty imposed under section 112(a) of the Customs Act was civil in nature. Therefore, there is no necessity for imputing any knowledge of the acts that rendered the goods liable for confiscation. She submitted that the fact that the appellant had filed the Bill Customs Appeal No.70096 of 2026 21 of Entry for the import of goods, which were found to be prohibited, was sufficient to impose penalty under section 112(a) of the Customs Act. She contended that it was not essential to establish mensrea for imposing such penalty.
26. There is no cavil that the appellant's role in the offending import was confined to the ministerial act of filing the Bill of Entry. Indisputably, the said ministerial act is not the reason why the goods have been held to be liable for confiscation under section 111 of the Customs Act. The Adjudicating Authority has directed confiscation of the goods, inter alia, on the ground that the goods were prohibited goods; the goods were not disclosed and described; and that their correct value was not declared.
27. There is no cavil that mensrea is not a necessary element for imposing penalty under section 112(a) of the Customs Act. The penalty imposed for failure to perform a civil obligation is required to be distinguished from a penalty imposed as a punishment for committing a crime. Whereas in the latter case, it would be necessary to establish that a person committing the crime had the intent or the knowledge of committing such a crime; there is no such requirement in case of penalty for default in compliance of a statue imposing a civil obligation, unless the words of that statute indicate otherwise. The aforesaid proposition has been stated in Corpus Juris Secundum1 in the following words:
"A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws."
"Accordingly, we hold that the element of mens rea was not required to be proved in the proceedings taken by the Income-tax Officer under section 271(1)(a) of the Income-tax Act against the Customs Appeal No.70096 of 2026 22 assessee for the assessment years 1965-66 and 1966-67."
28. In Gujarat Travancore Agency, Cochin v. Commissioner of Income Tax, Kerala, Ernakulam: (1989) 3 SCC 52/ 1989 (42) E.L.T. 350 (S.C.)/[1989] 44 Taxman 218 (S.C.), the Supreme Court had noted the aforesaid obligations and held that it is not necessary to establish an element of mensrea for imposing a penalty under section 271(1)(a) of the Income-tax Act, 1961; that is, penalty leviable if the assessee without reasonable cause, fails to furnish the return of total income within the stipulated time.
29. In Indo-China Steam Navigation Co. Ltd v. Jasjit Singh, Additional Collector of Customs Calcutta & Ors.: AIR 1964 SC 1140/ 1983 (13) E.L.T. 1392 (S.C.)/1964 taxmann.com 2 (S.C.), the Constitution Bench of the Supreme Court had rejected the contention that it was essential to establish mensrea in respect of levy of penalty under the Sea Customs Act, 1878 for violating the provision of Section 52A of the Sea Customs Act, 1878.
30. Thus, indisputably, persons who have committed the acts of omission or commission in relation to goods that rendered them liable for confiscation, are liable to pay the penalty as stipulated under section 112(a) of the Customs Act, without any requirement to establish their mal intent. However, the same principle would not apply to persons who are alleged to have abetted such acts of omission or commission. This is because, abetment, necessarily requires, at the minimum, knowledge of the offending Act.
31. The use of the expression 'abet' in Section 112(a) of the Customs Act, makes it implicit that the person charged, who is alleged to have abetted the acts of omission or commission, has knowledge and is aware of the said acts. A plain meaning of the word 'abet' means instigation, aid, encouragement of an offence2. It Customs Appeal No.70096 of 2026 23 necessarily involves the knowledge that the act being abetted is wrong.
32. The Black's Law Dictionary3 defines the expression 'abet' as under:
"1. To aid, encourage, or assist (someone), esp. in the commission of a crime <abet a known felon>. 2. To support (a crime) by active assistance <abet a burglary>."
33. In Queen v. Coney & Ors. (1882) 8 Q.B.D. 534: the Court for Crowned Cases Reserved held as under:
"To constitute an aider or abettor, some active steps must be taken, by word or action, with intent to instigate the principal or principals. Encouragement does not, or necessity, amount to aiding and abetting. It may be intentional or unintentional. A man may unwittingly encourage another in fact by his presence, by misinterpreted gestures, or by his silence or non-interference - or he may encourage intentionally by expressions, gestures, or actions, intended to signify approval. In the latter case, he aids and abets; in the former he does not. It is no criminal offence to stand by a mere passive spectator of a crime, even of a murder.
Noninterference to prevent a crime is not itself a crime. But the fact that a person was voluntarily and purposely present witnessing the commission of a crime, and offered no opposition to it, though he might reasonably be expected to present it, and had the power so to do or at least to express his dissent, might, under some circumstances, afford cogent evidence upon which a jury would be justified in finding that he willfully encouraged, and so aided and abetted. But it would be purely a question for the jury whether he did so or not."
Customs Appeal No.70096 of 2026 24
34. Section 3(1) of the General Clauses Act, 1897 expressly provides that the expression 'abet'4 would have the same meaning as in the Indian Penal Code, 1860 (hereafter 'the IPC').
35. Section 107 of the IPC explains the meaning of the expression 'abetment of a thing'. The said Section of the IPC reads as under:
"107. Abetment of a thing. --A person abets the doing of a thing, who--
First. -- Instigates any person to do that thing; or Secondly. -- Engages with one or more other person or persons in any conspiracy for the doing of that thing, if an act or illegal omission takes place in pursuance of that conspiracy, and in order to the doing of that thing; or Thirdly. -- Intentionally aids, by any act or illegal omission, the doing of that thing.
Explanation 1. -- A person who, by wilful misrepresentation, or by wilful concealment of a material fact which he is bound to disclose, voluntarily causes or procures, or attempts to cause or procure, a thing to be done, is said to instigate the doing of that thing.
Illustration A, a public officer, is authorised by a warrant from a Court of Justice to apprehend Z, B, knowing that fact and also that C is not Z, wilfully represents to A that C is Z, and thereby intentionally causes A to apprehend C. Here B abets by instigation the apprehension of C. Explanation 2. -- Whoever, either prior to or at the time of the commission of an act, does anything in order to facilitate the commission of that act, and thereby facilitates the commission thereof, is said to aid the doing of that act."
36. Thus, in the context of Section 112(a) of the Customs Act, by definition, the expression 'abet' means instigating, Customs Appeal No.70096 of 2026 25 conspiring, intentionally aiding the acts of commission or omission that render the goods liable for confiscation.
37. It is apparent from the above that the knowledge of a wrongful act of omission or commission, which rendered the goods liable for confiscation under section 111 of the Customs Act, is a necessary element for the offence of abetting the doing of such an act.
38. In Shree Ram v. State of U.P.: 1975 3 SCC 495, the Supreme Court held as under:
"6........Section 107 of the Penal Code which defines abetment provides to the extent material that a person abets the doing of a thing who "Intentionally aids, by any act or illegal omission, the doing of that thing". Explanation 2 to the section says that "whoever, either prior to or at the time of the commission of an act, does anything in order to facilitate the commission of that act, and thereby facilitates the commission thereof, is said to aid the doing of that act". Thus, in order to constitute abetment, the abettor must be shown to have "intentionally" aided the commission of the crime. Mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough compliance with the requirements of Section 107. A person may, for example, invite another casually or for a friendly purpose and that may facilitate the murder of the invitee. But unless the invitation was extended with intent to facilitate the commission of the murder, the person inviting cannot be said to have abetted the murder. It is not enough that an act on the part of the alleged abettor happens to facilitate the commission of the crime. Intentional aiding and therefore active complicity is the gist of the offence of abetment under the third para of Section 107."
Customs Appeal No.70096 of 2026 26
39. In Amritlakshmi Machine Works v. The Commissioner of Customs (Import), Mumbai: 2016 (335) E.L.T. 225 (Bom.) (FB)/[216] 66 taxmann.com 49 (Bom.)(FB), a Full Bench of the Bombay High Court had considered the aforesaid issue and held that the word 'abetment' is required to be assigned the same meaning as under
section 3(1) of the General Clauses Act, 1897. The court further opined as under:
"31. .....Mere facilitation without knowledge would not amount to abetting an offence. Parliament has specifically included abetment in Section 112(a) of the Act, to include acts done with knowledge, otherwise the first portion thereof "Any person - (a) who in relation to any goods does or omits to do any act ...." would cover acts done or omitted to be done on account of instigation and/or encouragement without knowledge. However, the first portion of Section 112(a) of the Act is only to make person of first degree in relation to the act or omission strictly liable. Persons who are not directly involved in the act or omission to act, which has led the goods becoming liable for confiscation cannot be made liable unless some knowledge is attributed to them. Therefore, it is to cover such cases that Section 112(a) of the Act also includes a person who abets the act or omission to act which has rendered the goods liable to confiscation. Imposing penalty upon an abettor without any mens rea on his part would bring all business to a half as even innocent facilitation provided by a person which has made possible the act or omission to act possible could result in imposing of penalty."
40. We respectfully concur with the aforesaid view. This view has also been consistently followed by the Tribunal.
41. In Commissioner of Customs (Import) v. Trinetra Impex Pvt. Ltd.: (2020) 372 E.L.T. 332 (Del.), a Co-
Customs Appeal No.70096 of 2026 27 ordinate Bench of this Court had rejected the Revenue's appeal against an order of the Tribunal setting aside the levy of penalty on a CHA under section 112(a) of the Customs Act. This Court had referred to the decision of the Bombay High Court in Amritlakshmi Machine Works v. The Commissioner of Customs (Import), Mumbai (supra) and held as under:
"11. In respect of the show cause notice dated 8-7- 2011, the imposition of the penalty has been made under section 112(a) of the Act in respect of the goods which have been held to be liable to be confiscated under section 111 of the Act. Here, the imposition of the penalty on the CHA is founded on the ground that he has abetted the offence. Though, for imposition of penalty in respect of the cases falling under section 112(a) of the Act, mens rea may not be required to be provided as condition precedent, however, when it comes to imposition of the penalty on an abettor, it is necessary to show that the said essential element/ingredient is present."
4.7 Chennai Bench of this Tribunal in the case of M/s Global Star Logistics (CHA) Vs CC, Tuticorin 2019 (370) ELT 675 (Tri.- Chennai) has held as follows:-
"9. We note the penalties imposed on the CHA who only processed the import documents are not legally sustainable. For penalty to be imposed for abetting a violation by another person, intentional action has to be shown. No such evidence has been brought out. Accordingly, we hold the penalties imposed on CFIAs are not sustainable. The same are set aside."
4.8 Ahmedabad Bench of this Tribunal in the case of M/s Prakash Poonia Vs CC, Kandla 2010 (252) ELT 442 (Tri.-Ahmd.) has held as follows:-
Customs Appeal No.70096 of 2026 28 "7.On examination of statements and records, we, no-
where found any corroborative evidence against the appellants that they were having knowledge of bogus/forged licenses before clearance of goods. Although the licenses were examined by the Customs authorities and they also did not find any discrepancy in the licenses and allowed the clearances of goods. From the facts and circumstances of the case, Revenue has not made out the case that the appellants were having any knowledge of the forged/bogus licenses, during the process of clearances of the goods. The reliance placed by the SDR has no support to him, as in that case the appellants were having knowledge of mis-declaration before clearances of the goods. Whereas, the reliance placed on by the advocate for the appellants support their contention and we are also with agreement that when the appellants were not having any knowledge of bogus/forged licenses during the process of clearances of goods, the appellants are not liable to any penal action. With this observation, we allow all the appeals with consequential relief to the appellants, if any."
4.9 In view of above decisions, I do not find any merits in the impugned order to the extent of imposition of penalty upon a customs broker-appellant.
5.1 Appeal is allowed.
(Operative part of the order pronounced in open court) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp