Legal principle

A customs broker who knowingly advises mis-classification to enable an importer to claim an inadmissible exemption or clear prohibited goods is liable to penalty under Sections 112 and 114AA, and a voluntary, unretracted Section 108 statement — customs officers not being police officers — is admissible substantive evidence of that knowledge.

Court decision

The Tribunal upheld the impugned orders, holding that the department had sufficiently proved that advising the importers on mis-classification and under-valuation was done knowingly and intentionally by the appellants; penalties on the CHA and its director Shri Ashish Gupta under Section 112 (Rs.10,00,000) and Section 114AA (Rs.20,00,000) were sustained and all three appeals were dismissed.

Facts

DRI (Delhi Zonal Unit) received intelligence that areca nuts ('supari') imported from Indonesia by three importers — M/s SYM Company, M/s Gorgeous Apparels and M/s Vikash Trading — were mis-declared and mis-classified under CTH 21069030 instead of CTH 08028090 to wrongly claim exemption under S.No.103 of Notification 50/2017-Cus, with value declared at Rs.90.48/kg. The consignments, all filed through the common CHA M/s Entire Logistics Pvt Ltd, were examined by SIIB ICD Tughlaqabad, samples drawn, and the goods seized on 30/05/2022; CRCL and the Areca Nut Research and Development Foundation, Mangalore reported broken/cut pieces of substandard areca nuts with moisture content inconsistent with CTH 21069030. In Section 108 statements the importers acknowledged the goods were classifiable under CTH 08028090 and prohibited for non-compliance with DGFT Notification 20/2015-2020 dated 25/07/2018. SCNs to the importers and the CHA culminated in confiscation of goods valued Rs.3,01,52,233 under Sections 111(d) and 111(m), and penalties of Rs.10,00,000 under Section 112 and Rs.20,00,000 under Section 114AA on the CHA (whose director Shri Ashish Gupta was also an appellant), confirmed by the adjudicating and appellate orders challenged before the Tribunal.

Key provisions

• Section 108, Customs Act, 1962 — Power to summon persons to give evidence and produce documents
• Section 114, Customs Act, 1962 — Penalty for attempt to export goods improperly etc
• Section 111(d), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Regulation 10(d), Customs Brokers Licensing Regulations, 2018 — Obligations of Customs Broker
• Section 112, Customs Act, 1962 — Penalty for improper importation of goods