The High Court of Delhi has set aside a ₹10 lakh penalty imposed on a Ludhiana-based Customs House Agent (CHA), Harish Goyal, under Section 112(b)(i) of the Customs Act, 1962. The decision came after the court observed that the penalty was grounded merely on third-party statements without independent corroborative evidence, and that key co-noticees in the case had already been exonerated.
Background
The case stems from a September 2016 interception by the Directorate of Revenue Intelligence (DRI) at the Inland Container Depot (ICD), Tughlakabad. DRI officers examined two containers declared to contain bicycle parts imported from China. Upon inspection, officials discovered concealed Chinese firecrackers behind a small batch of bicycle pumps and parts.
Customs authorities alleged that the import was orchestrated using the KYC documents of M/s Kirat Sales. The department penalized Harish Goyal ₹10 lakh, claiming he had knowledge of the misdeclaration and had facilitated meetings between the importers and Delhi-based clearing agents. Goyal appealed the penalty, but the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) affirmed the order in May 2022, prompting his appeal to the High Court.
A Division Bench comprising Justice Avneesh Jhingan and Justice Shail Jain observed that the department failed to produce direct or documentary evidence connecting Goyal to the unlawful import. The court pointed out that the consignment was seized prior to the filing of the Bill of Entry. Additionally, penalties against main co-noticees, including the alleged main importer, had already been set aside by CESTAT in separate proceedings.
Refusal of cross-examination requests also drew scrutiny from the court.
"The case set up by the Department that M/s Rahul Traders was the actual importer fell flat when Rahul Sehgal succeeded before the CESTAT... The foundation of the allegations against the appellant for proceeding under Section 112(i) (b) of the Act were eroded by quashing of penalty against Rahul Sehgal."
"The penalty imposed on the appellant was upheld despite the fact that the goods were seized before filing of the BOE and no documentary evidence directly indicating the role of the appellant in import of the goods came in the possession of the Department. In absence of independent evidence against the appellant the different treatment of the appellant from co-noticees cannot be sustained."
Answering the substantial question of law in favor of the appellant, the High Court set aside both the CESTAT order and the original penalty order, allowing the appeal.
Case Details
Case Title: Harish Goyal v. Commissioner of Customs
Case Number: CUSAA 132/2022
Judge: Justice Avneesh Jhingan and Justice Shail Jain
Decision Date: 06.11.2026
