- 1 - CSTA No. 8 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE K. V. ARAVIND CUSTOMS APPEAL No. 8 OF 2024 BETWEEN: 1. PRINCIPAL COMMISSIONER CUSTOMS, BANGALORE, AIRPORT AND AIR CARGO COMPLEX, COMMISSIONERATE, MENZIES, AVIATION BOBBA BUILDING, DEVANAHALLI, BANGALORE URBAN, KARNATAKA-560300. …APPELLANT (BY SRI UNNIKRISHNAN M., ADVOCATE) AND: 1. M/S ORBIT TRANS EXPRESS AND FREIGHT PVT. LTD., HAVING ITS REGISTERED OFFICE AT No.6/1, 11TH CROSS, 4TH MAIN, S. R. NAGAR, BENGALURU 560 027, REPRESENTED BY DIRECTOR. …RESPONDENT (BY SRI NAGARAJ G. E., ADVOCATE) Digitally signed by VALLI MARIMUTHU Location: HIGH COURT OF KARNATAKA - 2 - CSTA No. 8 of 2024 THIS CSTA / CUSTOMS APPEAL IS FILED UNDER SECTION 130 OF THE CUSTOMS ACT, PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE HON'BLE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, BANGALORE, IN DATED 30.04.2024 IN CUSTOMS APPEAL No.20767/23 VIDE ANNEXURE A AND CONFIRM THE ORDER IN ORIGINAL No. 293/2023-24 AP AND ACC DATED 27.09.2023 PASSED BY THE PRINCIPAL COMMISSIONER OF CUSTOMS, BANGALORE. THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 17.09.2025, THIS DAY K. V. ARAVIND J., PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MR. JUSTICE S.G.PANDIT and HON'BLE MR. JUSTICE K. V. ARAVIND C.A.V. JUDGMENT (PER: HON'BLE MR. JUSTICE K.V. ARAVIND) Heard Sri.Unnikrishnan M., learned counsel for the appellant and Sri.G.E. Nagaraj, learned counsel for the respondent. 2. The appeal by revenue under Section 130 of the Customs Act, 1962, challenging the Final Order No. 20319/2024 dated 30.04.2024 passed by the Customs, Excise and Service Tax Appellate Tribunal, Bangalore (for short 'CESTAT'). 3. The following substantial questions of law were admitted on 13.08.2025: - 3 - CSTA No. 8 of 2024 "(i) Whether the respondent is liable to for penalty under Section 117 of the Customs Act 1962 and also under Regulation 14 of the Courier Imports and Exports (Electronic Declaration & Processing) Regulation, 2010? (ii) Whether the Tribunal could interfere and set aside a validity executed contract like Bank Guarantee which are guided by the provisions of the Indian Contract Act being an independent contract executed by a Financial Institution which stipulates that payment has to be made without any demur? (iii) Whether the Hon'ble Tribunal could exercise discretion on the ground of equity and reduce the penalty which is not provided in law?" 4. The respondent was granted a license as an authorized courier agent by the Airport & Air Cargo Commissionerate, Bengaluru. The investigation conducted by the revenue intelligence found that M/s. K.T. Technologies, New Delhi, imported goods through Bengaluru Airport by misdeclaring the value. The respondent has acted as an authorized courier agent in respect of the alleged imported goods. In the course of investigation, M/s. K. T. Technologies, represented by Ms.Kajal Thakur, contended that GSTIN was created without her knowledge and used for the clearance of the goods. Initially, Ms. Kajal Thakur disowned the imported goods. However, during the investigation, they owned up to the imported goods and paid duty, interest, and penalty as - 4 - CSTA No. 8 of 2024 determined. Thereafter, the authorities released the goods in her favor. 5. The proceedings against the respondent continued for violation of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 (for short '2010 Regulations'). After a detailed inquiry, a show-cause notice was issued inviting a response from the respondent. The respondent filed a reply to the show-cause notice. Show-cause proceedings came to be concluded by determining the violation of the 2010 Regulations and the provisions of the Customs Act, 1962 (for short, 'the Act'). Accordingly, the authorized courier license issued to the respondent came to be revoked under Regulation 13 of the 2010 Regulations, and the bond and bank guarantee executed were ordered to be enforced. Additionally, a penalty of Rs.50,000/- for violation of Regulation 14 of 2010 Regulations and Rs.50,000/- for violation of Section 117 of the Act came to be levied. 6. The CESTAT under the impugned order proceeded to hold that the respondent has acted in the capacity of a facilitator of the customs transactions. The respondent had no mens rea to commit any illegality; hence, the imposed penalty - 5 - CSTA No. 8 of 2024 is unsustainable. The CESTAT further held that the revenue commenced proceedings as bogus imports were made in the name of M/s. K.T. Technologies. Ms. Kajal Thakur initially denied the consignment. However, subsequently, claimed ownership of seized goods and paid duty, interest, and penalty, and got the shipment released. In that view, the allegation of fraud using dummy and bogus imports is unsustainable. In that view, the CESTAT held that there is no violation of Regulation 12. The CESTAT further held that once the importer is identified, duty, interest and penalty is accepted, the revenue cannot turn around and allege bogus import. Accordingly, the CESTAT set aside the order, revocation of the authorized courier license, order to enforce the bond and bank guarantee, and also set aside the penalty imposed under the 2010 Regulations as well as under the Act. 7. We have heard Sri. Unnikrishnan M., learned counsel for the appellant, and Sri. G.E. Nagaraj, learned counsel for the respondent. Today we have passed judgment in CSTA No.7/2024 involving identical facts, and some of the parties involved in the alleged transactions are also the same. Learned counsel for the respondent has reiterated the contentions raised by learned counsel in CSTA No.7/2024. In - 6 - CSTA No. 8 of 2024 CSTA No.7/2024, after detailed consideration of the contentions urged, we have modified the order of the CESTAT only to the extent of restoring the penalty imposed under the 2010 Regulations and the penalty under Section 117 of the Act. As the facts and the legal issues are identical to the above- referred case, we deem it appropriate to dispose of this appeal in terms of the judgment in CSTA No.7/2024, which we have pronounced today. 8. Accordingly, the following: O R D E R (i) Appeal is allowed-in-part. (ii) The order of the CESTAT is set aside to the extent stated above. (iii) Substantial questions of law Nos.1 and 3 are answered in favour of the appellant and against the respondent. (iv) Substantial question No.2 does not arise from the order of the CESTAT. Hence, same is not answered. - 7 - CSTA No. 8 of 2024 (v) Penalty of Rs.50,000/- under Regulation 14 of 2010 Regulations is restored. Penalty of Rs.50,000/- imposed under Section 117 of the Act is restored. (vi) No order as to costs. Sd/- (S.G.PANDIT) JUDGE Sd/- (K. V. ARAVIND) JUDGE VBS