Pranav B Prem

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench, Kolkata, has held that once proceedings are initiated under the Customs Brokers Licensing Regulations, 2018 (CBLR), a separate penalty under the Customs Act, 1962 for the same set of allegations cannot be sustained.

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The Tribunal was dealing with appeals filed by M/s Sri Durga Impex and Logistics, a licensed Customs Broker, and Shri Srimanta Rakshit, a G-card holder working with the firm. Both appellants challenged the imposition of penalties under Sections 112(a)(i) and 114AA of the Customs Act, 1962, imposed through a common order passed by the Adjudicating Authority. The penalties stemmed from allegations of mis-declaration in export goods and failure to fulfill obligations under the CBLR.

The appellants argued that the alleged violations of the Customs Broker Licensing Regulations were already being addressed through separate proceedings under the CBLR, and that no offence under the Customs Act had been established against them. Therefore, they contended, the imposition of penalties under the Act was unjustified and legally unsustainable.

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The CESTAT bench comprising Judicial Member R. Muralidhar and Technical Member K. Anpazhakan agreed with the appellants. The bench noted that the violations alleged against the Customs Broker and the G-card holder related entirely to their conduct as Customs Broker license holders, and that the alleged lapses — such as failure to verify the credentials of the exporter or mis-declaration of goods — fall squarely within the scope of CBLR.

The Tribunal emphasized that any dereliction of duty by the Customs Broker must be examined strictly under the CBLR framework and not through penal provisions of the Customs Act, unless a separate offence under the Act is established through clear evidence. In the present case, the show cause notice issued under Section 124 of the Customs Act did not contain sufficient material to prove that the appellants committed any offence that warranted penal action under Sections 112(a)(i) or 114AA.

It further held that in the absence of independent evidence pointing to smuggling or intentional mis-declaration attributable directly to the Customs Broker, proceedings under the Customs Act for the same conduct already addressed under CBLR would amount to double jeopardy.

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In light of this finding, the Tribunal allowed the appeals and set aside the penalties imposed under the Customs Act. It reiterated the principle that where proceedings under CBLR are underway for specific regulatory lapses, Customs authorities should not resort to parallel penalty proceedings under the Customs Act unless distinct offences under the latter are clearly made out.

Appearance

Counsel for Appellant/ Assessee: Srikanta Kumar Mohapatra

Counsel for Respondent/ Department: Faiz Ahmed

Cause Title: Shri Srimanta Rakshit v. Commissioner of Customs (Port)

Case No: Customs Appeal No. 75674 of 2025

Coram: R. Muralidhar (Judicial Member), K. Anpazhakan (Technical Member)