Failure to Verify Importer's Credentials by CHA Employees Attracts Penalty: Delhi HC Dismisses Appeals Upholding CESTAT Order [Read Order]
The Delhi High Court concluded that no substantial question of law arose, as the penalty was rightly imposed and CESTAT had already shown leniency
![Failure to Verify Importers Credentials by CHA Employees Attracts Penalty: Delhi HC Dismisses Appeals Upholding CESTAT Order [Read Order]](https://images.taxscan.in/h-upload/2025/10/12/2095847-importers-credentials-cha-employees-penalty-delhi-hc-cestat-order-taxscan.webp "Failure to Verify Importers Credentials by CHA Employees Attracts Penalty: Delhi HC Dismisses Appeals Upholding CESTAT Order [Read Order]")
In a recent ruling, the Delhi High Court dismissed appeals filed by two employees of a Customs House Agent (CHA), upholding the penalty imposed on them for failing to verify the credentials of an importer and facilitating the clearance of misdeclared goods.
The appeals were filed by Sushil Sharma and Shekhar, challenging the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The case stemmed from the seizure of foreign-origin cigarettes valued at over Rs. 3.4 crores, concealed within a consignment of mattresses imported by M/s Digital Exports and cleared by the CHA firm, M/s Dilip Kumar Thakur.
The Original Authority had imposed a penalty of Rs. 50 lakhs each on the appellants along with another person for their role in the illegal importation. CESTAT, while acknowledging their role, reduced the penalty to Rs. 10 lakhs each, taking a sympathetic view considering they were salaried employees. Aggrieved by this reduced penalty, the appellants approached the High Court.
The counsel for the appellants argued that they were mere salaried employees with a limited role and limited means. The Revenue, on the other hand, submitted that Shekhar was an 'H' card holder and Sharma was a supervisor, and CESTAT had correctly assessed their active involvement and liability.
The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain, after perusing the CESTAT's detailed findings, noted that Shekhar was actively involved in clearing the consignment and was aware of its illegal nature. The Court observed that Sharma, as the supervisor, was responsible for overseeing the clearances and his concurrence was necessary, making him equally culpable for failing to discharge his duties under the Customs House Agent Regulations.
The Delhi High Court concluded that no substantial question of law arose, as the penalty was rightly imposed and CESTAT had already shown leniency. Accordingly, the High Court dismissed the appeals and directed the appellants to deposit the penalty of Rs. 10 lakhs each within three months.
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