Madras HC quashes ₹20 lakh penalty on customs broker due to lack of evidence of knowledge, involvement, or abetment in prohibited export.
Madras HC Quashes Broker Penalty in Prohibited Export Case
The Madras High Court set aside a ₹20 lakh penalty imposed on a customs broker under the Customs Act, 1962, holding that the department failed to establish abetment or collusion in a prohibited export. The record showed no evidence of the broker’s knowledge or active participation.
The Court reiterated that intermediaries like brokers cannot be penalized merely for procedural association unless there is clear proof of conscious wrongdoing. Section 112 penalties require demonstration of an “act of omission or commission” leading to the offense.
Practitioner Takeaway: Brokers and agents should document due diligence in export transactions. Absent evidence of collusion, liability cannot be imputed purely based on professional involvement.
Citations
- Customs Act, 1962, Section 112