Case Details: Mathuradas Narandas and Sons Forwarders Ltd. vs. Union of India (2026) 39 Centax 378 (Guj.)
Judiciary and Counsel Details
- A.S. Supehia & Pranav Trivedi, JJ.
- S/Shri Devan Parikh, Sr. Adv. with Rahul L. Gajera, for the Petitioner.
- S/Shri Ankit Shah & Shashvata U. Shukla, for the Respondent.
Facts of the Case
The petitioner, a Customs Broker, was engaged to facilitate the clearance of imported consignments of carpets by filing into-bond Bills of Entry. Pursuant to an investigation into alleged misdeclaration by the importer involving overvaluation, misclassification, and incorrect declaration of origin, a notice was issued proposing confiscation of goods and imposition of penalties. It was submitted that it had merely filed documents provided by the importer and had no knowledge or involvement in any irregularity. Despite recording that the petitioner might not have knowledge also alleging failure to advise the importer and lack of due diligence under Regulation 10 of Customs Brokers Licensing Regulations, 2018. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that the imposition of a penalty under Sections 112(a), 112(b) and 114AA of the Customs Act, 1962, necessarily requires the existence of mens rea or abetment, which was absent in the present case, as acknowledged by the adjudicating authority itself. It was observed that the second part of Section 112(a) and entire Section 112(b) and Section 114AA inherently incorporate the requirement of mens rea, and mere failure to advise the importer constitutes a civil obligation which cannot attract penal consequences. It was held that such obligation is primarily connected with the importer and would not extend to a Customs Broker unless it is established that the broker’s act or omission contributed to improper import. Accordingly, the penalty orders were quashed.
List of Cases Cited
- Commissioner v. VAZ Forwarding Ltd. — 2011 (266) E.L.T. 39 (Guj.) — Referred [Para 8]
List of Departmental Clarification Cited
- C.B.E. & C. Circular No. 9/2010-Cus., dated 8-4-2010 [Para 21]
- Principal Chief Commissioner of Customs, JNCH, Nhava Sheva, Advisory No. 02/2024 JNCH, dated 23-10-2024 [Paras 8, 22, 23]
