CESTAT Chennai Quashes ₹10 Lakh Penalty on Freight Forwarding Executive

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 02.07.2025

CESTAT Chennai Quashes ₹10 Lakh Penalty on Freight Forwarding Executive

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai has set aside a penalty of ₹10 lakhs imposed on Appellant, Assistant Manager-Sales at Al-Barrak Shipping Agencies Pvt. Ltd., in a red sanders smuggling case. The Tribunal ruled that there was no evidence of abetment or knowledge on the part of the appellant in the attempted illegal export of red sanders, a prohibited item.

Background of the Case

• A consignment falsely declared as “Ragi” was intercepted by the DRI at Chennai Port.
• Upon inspection, red sander logs—a prohibited export item—were discovered instead.
• The shipping bill was filed by a CHA on behalf of M/s A.I Enterprises, and Shri Elango had facilitated documentation and logistics.
• The adjudicating authority imposed a penalty of ₹10,00,000 on Appellant under Section 114(i) of the Customs Act, 1962, alleging abetment of smuggling.

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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