Customs broker penalty for forged documents was unsustainable absent knowledge, active involvement, or revenue implication.

Penalty under Regulation 22 of the Customs Broker Regulations, 2013 was held unsustainable where the alleged contravention was attributed to an employee and there was no evidence that the customs broker or its director was actively involved in or aware of the use of forged documents. The record showed attempts to obtain the required NOC, the false documents originated from another agent, and the later issuance of NOC by FSSAI supported the absence of deliberate misconduct. With no proof of revenue implication or knowledge of the illegal act, mere inability to control employees did not justify penal action, and the penalty was set aside.

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Issues: Whether penalty under Regulation 22 of the Customs Broker Regulations, 2013 was sustainable against a customs broker where the contravention was attributed to an employee and there was no evidence of active involvement or knowledge on the part of the broker.

Analysis: The appellant was found not to have been shown as actively involved in the use of forged documents. The record indicated that the concerned employee had made efforts to obtain the required NOC, the false documents were supplied by another agent, and the subsequent issuance of NOC by FSSAI supported the absence of deliberate misconduct by the broker. The order also recorded that there was no proof of revenue implication and no material to show that the director or the broker had knowledge of the illegal act. In these circumstances, mere inability to control employees was not sufficient to justify penal action.

Conclusion: Penalty under Regulation 22 was not justified and was set aside in favour of the assessee.

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