2026 (4) TMI 888

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.... and disposed of. 2. Re: Admission of Appeal 2.1. The matter is now taken up for hearing on the point of admission. This statutory appeal, preferred under Section 130 of the Customs Act, 1962, is directed against the Final Order passed by the Learned Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, dated 24th January 2025. By the impugned judgment, the Learned Tribunal set aside the penalties imposed upon the Respondent, who was acting as a Director of a Customs Broker firm, under Sections 112(a) and 114AA of the Act. 2.2. The Tribunal held that the Respondent was not liable for the alleged tax evasion, finding no evidence of mens rea or active participation in the fraud. The Tribunal further observed that the Respondent had merely discharged a ministerial duty by submitting documents provided by the importer. Aggrieved by this total exoneration and the consequent dropping of all penal proceedings, the Revenue has moved this Court, contending that the Tribunal failed to appreciate the vital and intentional role played by the Customs Broker in a high-value fraud. 3. FACTUAL MATRIX 3.1. The dispute originated from a specialized investigation conduc....

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....cipal importer without any proven knowledge of the alleged underlying forgeries. 3.5. The Tribunal also addressed the procedural legality of the demand, observing that the adjudication order was passed beyond the one-year statutory mandate prescribed under Section 28(9) of the Customs Act. Finding the proceedings hit by limitation and lacking evidence of mala fide intent on the part of the Broker, the Tribunal vacated the penalties in toto. It is this comprehensive exoneration that the Appellant/Revenue seeks to challenge in the present appeal, asserting that the Respondent's role was more than just clerical and had a direct impact on the massive loss of revenue. 4. SUBMISSIONS OF THE APPELLANT 4.1. Mr. Kaushik Dey, Learned Advocate appearing on behalf of the Appellant/Revenue, while pressing for the admission of this appeal, has first submitted that the Learned Tribunal failed to appreciate the gravity of the contraventions committed by the Respondent in his professional capacity. He contends that the Respondent, as a Customs Broker, was under a statutory mandate to verify the correctness of the information handled by him. Ld. Advocate alleges that the Respondent acted in....

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....Finally, Mr. Dey submits that the Tribunal's finding on limitation under Section 28(9) is fundamentally flawed. He argues that the Tribunal failed to consider the various COVID-19 relaxation notifications which legally extended the time-limits for adjudication. He maintains that these errors of law, coupled with the factual misappreciation of the Broker's role, constitute substantial questions of law that necessitate the intervention of this Court under Section 130 of the Customs Act. 5. SUBMISSIONS OF THE RESPONDENT 5.1. Mr. Shovendu Banerjee, Learned Advocate appearing on behalf of the Respondent, has vehemently opposed the admission of the appeal by raising a primary preliminary objection on maintainability alongside a substantial defence regarding the legal standing and obligations of a Customs Broker. He contends that the present appeal is not maintainable in light of the National Litigation Policy. Reliance is placed on the parent Instruction F. No. 390/Misc/163/2010-JC dated 17.08.2011 and the latest Instruction F. No. 390/Misc/30/2023-JC dated 02.11.2023. The relevant portion of the Instruction dated 02.11.2023 is reproduced below: "In exercise of the pow....

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....d as a mere conduit in the transaction of business. This finding of fact, the Respondent argues, precludes the existence of any "substantial question of law" necessary for admission under Section 130. He asserts that the Revenue is merely attempting to re-appreciate evidence which has already been conclusively decided in favor of the Respondent. 5.5. To bolster the argument on maintainability and the scope of a Broker's liability, Mr. Banerjee places heavy reliance on the judgment of this Hon'ble Court in CUSTA 77 of 2026 (Shri Pramod Nahata vs. Commissioner of Customs) dated 12.03.2026. It is submitted that in that matter, which involved an identical set of facts and the same Respondent, this Court held that if the Tribunal finds a Customs Broker innocent of fraud and the penalty remains unquantified, the Revenue's appeal is hit by the monetary limits of the 2023 Instruction. The Respondent argues that the ratio of the said judgment squarely applies to the present case, and as the Appellant has failed to show any "exceptional circumstances" or recurring questions of law, the appeal ought to be dismissed at the admission stage itself. 5.6. Therefore, Mr. Banerjee concludes th....