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2025 Supreme(Online)(Cal) 3312
CALCUTTA HIGH COURT
T.S SIVAGNANAM, CJ, CHAITALI CHATTERJEE (DAS), J
M/s. BOSE ENTERPRISE – Appellant
Versus
COMMISSIONER OF CUSTOMS (PORT), KOLKATA – Respondent
CUSTA/12/2025
For the Appellants/Petitioners: Mr. Shaunak Ghosh, Mr. Ashok Bhowmik, Ms. Shsreyashi Maity
For the Respondents: Ms. Manasi Mukherjee, Mr. Bijitesh Mukherjee
Failure to adhere to KYC norms by a Customs House agent justifies the imposition of penalties under the Customs Act for complicity in illegal activities.
Headnote:(A) Customs Act, 1962 - Section 130, Section 114(i), CHALR 2013 - Appeal by a Customs House agent against penalty imposed for failure to meet KYC norms and for the attempted export of smuggled goods. - The application of penalties under section 114(i) requires adherence to KYC norms and failure to do so can lead to legal liability. (Paras 2, 6, 11)
(B) Legal requirement of KYC - The responsibility of a Customs House agent to assure compliance with KYC norms and act upon verified information rather than oral assumptions.
Facts of the case:
The appellant was penalized for involvement in an attempted export of illegally sourced goods due to lack of KYC verification and authorization. Despite acknowledging failure, the Tribunal reduced the penalty from Rs.50 Lacs to Rs.4 Lacs based on the appellant's arguments and compliance history.
Findings of Court:
The learned Tribunal rightly reduced the penalty while affirming that it cannot ignore the violation of KYC norms. The appeal was deemed without substantial questions of law.
Issues: Key issues included whether the Tribunal misdirected itself regarding the liability for KYC compliance and the appropriateness of the imposed penalty.
Ratio Decidendi: The Tribunal upheld that penalties under the Customs Act are justified upon failure to comply with KYC due diligence requirements, which the appellant neglected.
Result: The appeal is dismissed.
The Court : This appeal has been filed by a Customs House agent under section 130 of the Customs Act , 1962, challenging the final Order dated 23rd September, 2024 passed by the Customs, Excise and Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata (Tribunal) in Customs Appeal no.75060 of 2017.
The appellant has raised the following substantial questions of law for consideration :
i) Whether the learned Tribunal all along proceeded in the matter putting the petitioner in the same footing with the other appellant which is wrongful and incorrect inasmuch as the case of the petitioner and the case of the other appellant are not the same and cannot be treated on the same footing ?
ii) Whether the learned Tribunal at the time of passing the impugned order misdirected itself in holding that the petitioner, the appellant therein, could not make out a convincing case for non-imposing penalty upon the petitioner ?
iii) Whether during the proceeding initiated under CBLR/CHLR, an enquiry officer was nominated by the Commissioner of Customs (A & A) vide letter No. F.No.S45-12/2005-Estt(CHA) Pt dated 31/12/2014 to look into the charges leveled against the petitioner for alleged violation of provisions contained in CHALR , 2013 and to file a report under section 22 of the CHALR 2004 (now regulation 20 of the Customs Broker Licensing Regulations, 2013) ?
iv) Whether the Learned Tribunal failed to appreciate that penalty was imposed upon the petitioner under section 114(i) of the Customs Act , 1962 for violation of the provision of CBLR 2013 cannot be sustained in law and/or in the facts and circumstances and for any violation of CBLR, 2013, no penalty can be imposed upon the petitioner under section 114(i)
of the Act ?
We have heard Mr. Shaunak Ghosh, learned Counsel for the appellant and Ms. Manasi Mukherjee, learned standing Counsel for the respondent/Department.
The appellant filed the appeal before the learned Tribunal against the Order-in-Original dated 8th April, 2016 passed with reference to the show- cause notice issued under section 124 of the Act in connection with an attempted export of Red Sanders detected in Customs Transit Declaration (CTD) consignment (Nepal Export) and by the said order the Adjudicating authority imposed penalty of Rs.50 Lacs each on the appellant and another namely, Arup Mukherjee, proprietor of M/s. Shiva Trading Company. Based on intelligence gathered, the DRI officers of Calcutta Zonal Unit, intercepted a consignment of export of an attempted smuggling of Red Sander wood logs in the guise of Nepalese can handicrafts by CTD dated 30.3.2014. Upon examination of the consignment, the goods were seized which consisted of 210 Red Sander wood logs against 56 packages of Nepalese cane handicraft as declared. Dilip Kumar Sarkar of the appellant informed the Investigating Officers that he was unaware of the stuffing of the container but had heard from the lorry driver that the stuffing was done somewhere in Darbhanga. The details of the transporter were also mentioned. Upon further investigation the F. Card holder and owner of the appellant Sudipta Bose, informed the authorities that they had taken up the dock clearance for export of the consignment through Shri Srikanta Adhikary, who was well-known to him for several years in the course of business. However, in the adjudication order it has been recorded that the appellant did not pay to Shri Adhikary and would rather determine his clearing charges depending on the nature of job and communicate the same to Shri Adhikary, as it was the latter who negotiated with the party (exporter) in money matters. It has been noted that the proprietor of the appellant had admitted before the authorities of deputing Dilip Kumar Sarkar on behalf of his firm to carry out the export clearance and that he had no contact with the firm at Nepal and the job was entrusted to him by Shri Adhikary for professional services of customs clearance. It has been further noted that the app
