The Delhi High Court has set aside a Rs.10 lakh customs penalty on a customs house agent in a firecracker-import case. It found no independent evidence establishing his role, noted that penalties on other noticees had already been quashed, and held that the tribunal wrongly proceeded as though he had not requested cross-examination of the witnesses relied on against him.
New Delhi: Harish Goyal had asked to cross-examine the three witnesses whose statements were used against him, yet the tribunal proceeded as if he never had. The Delhi High Court has ruled that the customs penalty could not be sustained on the evidentiary record presented against him, allowing his statutory appeal against the Commissioner of Customs [Harish Goyal v. Commissioner of Customs].
The reportable judgment was delivered on November 6, 2026, by Justices Avneesh Jhingan and Shail Jain. They set aside both the CESTAT order upholding the penalty and the underlying penalty order under Section 112(b)(i) of the Customs Act, 1962.
Cross-examination request was actually made
Goyal had specifically sought to cross-examine Ajay Sagar, Purshottam and Jaskirat Singh, whose statements were relied on against him. The request was refused on the stated grounds that it would serve no useful purpose and delay proceedings.
The High Court found that CESTAT had proceeded on the incorrect factual premise that no such request had been made. In paragraph 15, the bench recognised that cross-examination is not an absolute right, while explaining that it falls within natural justice and is consistent with Section 138B of the Customs Act.
Allegations required evidentiary support
Goyal argued that he neither filed the bill of entry nor handled clearance at Tughlakabad, and that the case rested on third-party statements. Customs maintained that the statements and shipping-line correspondence, taken together, established his knowledge and involvement.
The High Court noted that the adjudicating authority had not found his role in importing the seized consignment proved, but had nevertheless penalised him on the basis of alleged knowledge and arranging a meeting. The Court found no evidence against him apart from statements of co-noticees.
The Department’s allegation that Rahul Sehgal was the actual importer had also lost its foundation when the penalty against him was quashed by CESTAT. A penalty on another co-noticee, Saurabh Aggarwal, had likewise been set aside for absence of evidence beyond Goyal’s statement.
Against that background, the bench held that different treatment of Goyal could not be sustained without independent evidence against him. The ruling turns on the evidentiary deficiencies in this case; it does not make non-filing of a bill of entry an automatic exemption from customs liability.
The seized consignment and the penalty
The dispute arose from two containers declared to contain bicycle parts. Revenue Intelligence officers examined them at the Inland Container Depot in Tughlakabad in September 2016 and allegedly found Chinese-made firecrackers concealed behind bicycle parts and pumps. The goods were seized before a bill of entry was filed.
Goyal, proprietor of Krishna Clearing & Forwarding Agency in Ludhiana, worked as a customs house agent for Rahul Traders and Kirat Sales. The Department alleged that he knew of the misdeclaration, arranged meetings with Delhi-based customs agents and facilitated misuse of Kirat Sales’ documentation.
The adjudicating authority imposed a Rs.10 lakh penalty in February 2018. CESTAT dismissed Goyal’s appeal in May 2022.
The combined effect of the missing independent evidence, the treatment of the other noticees and the cross-examination error led the Court to answer the substantial question of law in Goyal’s favour. His appeal was allowed and the penalty was set aside.
Case: Harish Goyal v. Commissioner of Customs
Case No.: CUSAA 132/2022
CNR: DLHC010333192022
Bench: Justices Avneesh Jhingan and Shail Jain, Delhi High Court
Date: November 6, 2026
Outcome: Appeal allowed; CESTAT order and Rs.10 lakh penalty order set aside.