ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 05.09.2025
CESTAT Delhi Sets Aside Penalties on Customs Broker in Misclassificationβ β β β β
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
In a significant ruling, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has set aside penalties imposed on M/s PS Bedi & Co (P) Ltd., a Customs Broker, under Sections 112(a)(ii) and 114AA of the Customs Act, 1962. β This decision, delivered on August 5, 2025, highlights the importance of procedural fairness and the role of Customs Brokers in import transactions. The case revolved around alleged misclassification of imported goods, leading to penalties imposed by the Principal Commissioner of Customs. β
Background of the Case
The appellant, M/s PS Bedi & Co (P) Ltd., was penalized for filing Bills of Entry for AMR/Non-AMR Water Flow Meters imported by M/s SPML India Ltd. from Israel. The Directorate of Revenue Intelligence (DRI) alleged that the goods were misclassified under Customs Tariff Item (CTI) 9026 10 10 instead of CTI 9028 20 00, resulting in revenue loss. Despite having Certificates of Origin indicating CTI 9028, the Customs Broker filed the Bills of Entry based on the import documents provided by the importer. β
A show cause notice was issued, accusing the Customs Broker of deliberate misclassification and suppression of material facts, making the goods liable for confiscation under Section 111(m) of the Customs Act. β Penalties were imposed under Sections 112(a)(ii) and 114AA of the Customs Act.
Source: CESTAT Delhi
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