ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 27.06.2025
CESTAT Chennai Quashes Penalties on Customs Broker in Export Overvaluation
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai Bench, has quashed heavy penalties imposed on M/s. Cochin Air Cargo Clearing House and its partners. The Tribunal ruled that there was no substantive evidence of the Customs Brokerβs connivance in the alleged overvaluation of goods intended for export or in the fraudulent MEIS claims.
Background of the Case
The case stemmed from an attempted export in June 2019 by M/s. Swiss Global, New Delhi, who sought to export substandard βair inlet automobile spare partsβ valued at βΉ3.46 crore through the Trichy Air Cargo Terminal. The shipments, declared under CTH 84212300, were allegedly overvalued to fraudulently claim Merchandise Exports from India Scheme (MEIS) benefits and IGST refunds.
The customs authorities at Trichy initiated an investigation based on specific intelligence and seized the export cargo. A Show Cause Notice was issued, followed by a harsh Order-in-Original dated 30.06.2020 imposing the following penalties:
- βΉ3 crore on Cochin Air Cargo Clearing House (Cochin unit)
- βΉ3 crore on its Trichy branch
- βΉ2 crore each on its Managing Partner and Manager
The department invoked Sections 114(iii), 114AA, and 147(3) of the Customs Act, 1962, treating the Customs Broker and its partners as βdeemed exportersβ liable for the attempted fraudulent export.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
Source: CESTAT Chennai
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