Illegal Export of ‘Red Sanders’ by Freight Forwarder: Delhi HC Upholds Rs.10 Lakh Penalty [Read Order]
While these actions were crucial to the attempted export, the Court found that an additional penalty under Section 114AA was not warranted, as he had no knowledge of misdeclaration in a document filed for the purposes of the Customs Act.
Illegal Export - Delhi HC - Upholds - taxscan
Illegal Export - Delhi HC - Upholds - taxscan
The High Court of Delhi, upheld a Rs.10 lakh penalty on a freight forwarder, for his role in the attempted illegal export of Red Sanders.
The Revenue-appellant filed an appeal under Section 130A of the Customs Act, 1962, against the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT )’s judgment dated 18th October 2024 in Customs Appeal No. 50016/2020, which rejected the imposition of a penalty under Section 114AA on the Ravindra Kumar, respondent-assessee.
This Court had earlier considered an appeal by assessee against the same judgment and had rejected it on 12th August 2025.
The facts of the case arose from intelligence received by the Customs Department about the illegal export of ‘Red Sanders’. Consignments were intercepted containing Red Sandal Wood, but the documents declared the goods as household items.
Red Sandal Wood is an endangered species under CITES and cannot be exported without a valid certificate. Investigation showed that the baggage declaration in Mr. Vipin Dua’s name was linked to a forged company, M/s Sikki Auto India Pvt. Ltd. Mr. Sarvesh Kumar, a Customs broker, prepared the documents, and the assessee, Mr. Ravindra Kumar of M/s Vin Global Logistics, acted as a freight forwarder providing the papers to another freight forwarder, Mr. Mayank Gupta.
The consignment was seized, and penalties were imposed on the individuals involved. The Adjudicating Authority, in its order dated 25th July 2019, imposed a penalty of Rs. 10 lakh on the assessee. CESTAT, in its order dated 18th October 2024, dismissed the Revenue’s request to impose an additional penalty under Section 114AA on the assessee, while confirming the Rs. 10 lakh penalty under Section 114. Hence, the Revenue filed the present appeal.
Justice Prathiba M Singh and Justice Shail Jain considered the matter and reviewed the role of the assessee. It noted that he had helped obtain documents from Shri Sarvesh Kumar, arranged airway bills in the name of the fictitious company M/s Sikki Auto, and coordinated changes to consignor, consignee, and goods description to match a fake baggage declaration filed in the name of Shri Vipin Dua.
The bench found that his actions were crucial to the attempted export of red sanders. Although he claimed to have performed due diligence and gained no personal benefit, the Court held that the penalty under Section 114 of the Customs Act, 1962 was justified.
The Court observed that a penalty under Section 114AA would have applied only if he had knowledge of misdeclaration in a document filed for the Act. Since he dealt only with the airway bill, which was related to the airline, no penalty under Section 114AA was warranted. It noted that such a penalty would have entailed five times the value of the goods, which was excessive given his limited role.
The High Court upheld the Rs. 10 lakh penalty under Section 114, declined to entertain the appeal, and left the legal question open for consideration in an appropriate proceeding. The appeal and any pending applications were disposed of.
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