Wilful misrepresentation is essential for Section 114AA penalty; Customs Broker not liable absent proof of fraudulent intent.

Penalty under Section 114AA of the Customs Act, 1962 requires proof that a false declaration, statement, or document was knowingly made or used with wilful misrepresentation or fraudulent intent. A Customs Broker who merely filed shipping bills on the exporter's instructions, without material showing mala fide conduct, could not be fastened with penalty. The adverse inference drawn from common premises and ICE code was unsupported by the record, and the penalty order was therefore unsustainable.

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Issues: Whether penalty under Section 114AA of the Customs Act, 1962 was sustainable against the Customs Broker in the absence of proof of wilful misrepresentation or fraudulent conduct.

Analysis: The Customs Broker had only filed the shipping bills on the basis of documents furnished by the exporter. The record showed that the drawback claim by the exporter was still under challenge and that the confirmed drawback demand itself was only partial, which did not by itself establish culpability of the Customs Broker. Section 114AA is attracted only where a false declaration, statement, or document is knowingly made or used, and the material on record did not establish that the Customs Broker had acted with mala fide intent or wilful misrepresentation. The adverse factual inference drawn by the lower authority regarding common premises and ICE code was found to be unsupported by the record.

Conclusion: Penalty under Section 114AA was not imposable on the Customs Broker and the penalty order was unsustainable.

Ratio Decidendi: Penalty under Section 114AA of the Customs Act, 1962 requires proof of knowing falsity or wilful misrepresentation, and cannot be sustained against a Customs Broker merely for filing shipping bills on the exporter's instructions without evidence of fraudulent intent.

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