Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
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Date of decision: 8 December, 2025
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Uploaded on 11 December, 2025
+ W.P.(C) 3434/2017
EASTERN BROADCAST SOLUTIONS PVT. LTD
& ORS. .....Petitioners
Through: Mr. Kamal Sawhney, Ms. Akansha
Wadhwani & Mr. Rishab Mishra, Mr.
Deepak Thackur,Advs.
versus
THE COMMISSIONER OF CUSTOMS (IMPORT)
& ORS. .....Respondents
Through: Mr. AkshayAmritanshu, Senior
Standing Counsel, Ms. Drishti Rawal,
Mr. Abhay Nair, Mr. Mayur Goyal,
Mr. Sarthak Srivastava, Adv.
Mr. Harpreet Singh, SSC with Mr.
Jatin Gaur, Ms. Suhani Mathur, Ms.
Shivani Saxena, Adv.
Ms. AnushreeNarain, SSC with Mr.
YamitJetley, Advs. for R-2.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE SHAIL JAIN
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner Firm i.e., Eastern
Broadcast Solutions Pvt. Ltd. (hereinafter “ EBSPL / the Petitioner Firm ”)
and its directors, inter alia, challenging the impugned order dated 23rd
March, 2017, passed by the Customs, Central Excise & Service Tax
Settlement Commission, Principal Bench, New Delhi (hereinafter “ the
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GUPTA
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Settlement Commission ”). The challenge is limited to the extent of the
settlement amount and the penalty imposed upon the Petitioners.
3. The brief facts of the case leading to the present petition are that one
M/s. Broadcast Solutions Pvt. Ltd. (hereinafter “ BSPL ”), a company
incorporated in Singapore, was awarded a contract in 2012 by the Board of
Control for Cricket in India (hereinafter “ BCCI ”) for providing broadcast
equipment and associated services for covering the Indian Premier League,
as also other international and domestic cricket events organised by the
BCCI.
4. EBSPL, a company incorporated under the Companies Act, 1956, is
stated to be an associate of BSPL, Singapore, was assigned performance of
the obligations under the said contract for broadcasting of the cricket events.
In order to perform its obligations, EBSPL had to import a substantial
amount of broadcasting equipment into India. In respect of the same it had
engaged one M/s. Broekman Logistics India Pvt. Ltd., a freight forwarder
and logistics agent, for customs clearance, etc., and the broadcasting
equipment was imported between the period December, 2012 and March,
2013.
5. It is the case of the Petitioners that as per the advice of the concerned
Customs Clearing Agent, the subject imports were imported on a temporary
basis andstored in the ‘ Arshiya Free Trade and Warehousing Zone ’ located
at Panvel, Mumbai, Maharashtra(hereinafter “ the Free Trade &
Warehousing Zone ”), which is a Special Economic Zone (hereinafter
“ SEZ ”). Thereafter, the subject equipment were removed from the Free
Trade & Warehousing Zone to the domestic tariff area. However, the
purpose for temporary removal of the subject imports was declared as
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GUPTA
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“DEMO” instead of declaring the actual purpose for the import of the
equipment i.e., ‘Commercial Purpose’.
6. On the basis of intelligence received by the Directorate of Revenue
Intelligence (HQ), New Delhi, (hereinafter “ DRI ”) an investigation was
initiated against the Petitioner. It is stated that during the course of
investigation, it was realized that the subject imports to the Free Trade and
Warehousing Zone was incorrect and the declaration of the purpose for
temporary removal as “DEMO” was also incorrect.
7. The investigations continued and various letters were issued to
EBSPL, documents were sought and the representatives of EBSPL also
appeared before the DRI and recorded their statements. Further, the subject
imports were also seized by the DRI, sometime in June, 2013. Pursuant to
the same, it is stated that EBSPL had sought provisional release of the
subject imports as it had already made a payment of approximately Rs. 8.69
Crores towards the customs duty, albeit , under protest.
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8. Thereafter, a Show Cause Notice was issued on 18 March, 2015
(hereinafter “ the SCN” ), inter alia, demanding differential duty and penalty
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was also proposed to be imposed. An addendum to the SCN dated 30
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December, 2015, was issued on 5 January, 2016, inter alia, in respect of the
imposition of penalty.
9. While the SCN proceedings were pending, EBSPL approached the
Settlement Commission under Section 127A of the Customs Act, 1962
(hereinafter “ the Act ”), for resolving the dispute. In the settlement
application, the stand of EBSPL was that a substantial part of the applicable
customs duty was already paid and the declaration of the purpose of the
subject imports as ‘DEMO’ was nothing but a bonafide mistake. EBSPL
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also challenged the valuation of the subject imports and the calculation of
the applicable duty which was done by the DRI.
10. The settlement application was filed in both branches of the
Settlement Commission, i.e., Bombay and Delhi, and finally the settlement
application before the Bombay branch was also transferred to the Principal
Bench, at New Delhi. The Settlement Commission had considered the report
from the DRI and the final hearing took place before the Settlement
Commission. The Settlement Commission then passed the impugned final
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order dated 23 March, 2017 as per which the following duties and penalties
were imposed upon the Petitioner.
“ 20. In view of the above, and the facts of the circumstances of
the case, the Bench hereby settles the case under Section l27C(5)
of the Act on the following terms and condition :-
DUTY :Custom duty in case of imports made through different
ports is settled as detailed below:-
The amount of Rs.9,67,72,280/- deposited by the applicant is
ordered to be appropriated towards the settled amount of duty.
The remaining amount of duty i.eRs 6,06,405/- should be
deposited within 15 days of receipt of this order under intimation
to the Jurisdictional Commissioner and the Settlement
Commission.
Interest : The applicant has admitted and claimed to have
deposited an amount of Rs. 75,186 /- as interest in respect of
imports made through JNPT Nhava Sheva. This amount is ordered
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GUPTA
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to be appropriated. No interest has been paid by the applicant in
respect of imports made through Air Cargo (Import), New Delhi
and ICD TKD (Import). The concerned Jurisdictional
Commissioners should check the correctness of the interest
amount paid by the applicant in respect of imports made through
Nhava Sheva and calculate the interest payable in respect of
imports made through Air Cargo (Import) New Delhi and ICD
TKD (Import) and the applicant should be informed of the details
of the same with in 15 days of the receipt of this order. The
applicant shall pay the remaining amount within 15 days from the
date of receipt of such communication from the jurisdictional
Commissioner underintimation to the Jurisdictional
Commissioner and the Settlement Commission.
Penalty :Taking into account the facts and circumstances of the
case, the Bench imposes a penalty of Rs. 90,00,000/- (ninety
lakhs) in respect of imports made through JNPT Nhava Shava, Rs
100,00,000/- (one crore) in respect of imports made through Air
Cargo import), New Delhi and Rs 10,00,000/- (ten lakhs) in
respect of imports made through ICD TKD (Import) on the
applicant.
The Bench also imposes a penalty of Rs 10,00,000/- on Shri
Sandeep Mehta and Rs 10,00,000/- on Shri Saeed Izadi, co-
applicants in respect of imports made through JNPT Nhava
Sheva.
The Bench also imposes a penalty of Rs 14,00,000/- on Shri
Sandeep Mehta and Rs 14,00,000/- on Shri Saeed Izadi, co-
applicants in respect of imports made through Air Cargo (Import),
New Delhi.
The Bench also imposes a penalty of Rs 1,00,000/- on Shri
Sandeep Mehta and Rs 1,00,000/- on Shri Saeed Izadi, co-
applicants in respect of imports made through ICD TKD (Import),
New Delhi.
The Bench grants immunity to the applicant and co-applicants
from penalty in excess of the above amounts.
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GUPTA
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The settled amount of duty, penalty and interest should be paid by
the applicant with in 30 days of receipt of this order.
Shri Manoj Govindan Nair, Senior Manager, Broekman Logistics
India Pvt Ltd and Arshiya Supply Chain Management Pvt Ltd,
who have been asked to show cause to Commissioner of Customs
(General), JNPT Nhava Sheva, as to why penalty should not be
levied upon them under Section 112 (a) & (b) of the Customs Act,
1962 as applicable have not approached Settlement Commission.
Therefore, the action as proposed in SCN dated 18.3.15 against
Shri Manoj Govindan Nair and Arshiya Supply Chain
Management Pvt Ltd should be taken by Jurisdictional
Commissioner of Customs (General), JNPT Nhava Sheva.
Prosecution: Subject to payment of duty, interest if any, penalty,
the Bench grants immunity to the applicant and co-applicant from
prosecution under the Act and Rules framed there under as
applicable in so far as this case is concerned.”
11. As can be seen from the impugned order extracted above, the
applicable customs duty was settled at Rs. 9,73,78,685/- and penalty was
imposed in the following terms:
st
12. When the matter was listed initially, vide order dated 21 April, 2017,
an interim order was granted in the following terms:
“2. It is pointed out by Mr. Tarun Gulati, learned counsel for the
Petitioner, that a sum of Rs. 9,67,72,280 out of total settled
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GUPTA
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amount of duty of Rs. 9,73,78,685 was paid by the Petitioners even
during the course of the investigation. The penalty amount in the
aggregate of Rs. 2.5 crores imposed by the impugned order dated
23rd February, 2017 of the Customs, Central Excise and Service
Tax Settlement Commission (CCESTSC) on the Petitioners is
approximately 25% of the total duty demanded. According to the
Petitioners this is excessive and unreasonable considering that the
Petitioners had fully cooperated in the proceedings and paid the
above duty amount even during investigation and the balance sum
of Rs. 6,06,405 after the impugned order. Mr Narula, however,
disputes this contention and urges that the penalty amounts were
justified.
3. Having considered the above submissions the Court directs that
subject to the Petitioner No.l, on behalf of all Petitioners,
depositing with the Respondent Department a sum of Rs.
25,00,000 in relation both the show cause notices dated 18th
March, 2015 and 5th January, 2016 within a period of four weeks
from today, no coercive steps will be taken against the Petitioner
as regards the penalty amount as ordered by the CCESTSC.”
13. The amount of Rs. 25,00,000/- in terms of the above order stands
deposited with the Department. Accordingly, the interim order dated 21st
April, 2017 was made absolute during the pendency of the present petition
vide order dated 16th August, 2017.
14. The submission of Mr. Kamal Sawhney, ld. Counsel for the
Petitioners is that EBSPL had temporarily imported the subject equipment,
for covering the cricket events organised by the BCCI, including the IPL
tournament, and the customs duty itself was not liable to be paid. It was only
under professional advice from the Customs Clearinghouse Agent that the
subject equipment was imported to the Free Trade & Warehousing Zone and
then declared as ‘DEMO’.
15. There was no ill intention of the Petitioner Firm to avoid payment of
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GUPTA
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duty. Infact prior to the issuance of the SCN itself, the applicable customs
duty was paid.
16. Further, reliance is placed upon the following decisions:
a. Jaswant Rai and Ors. vs. Central Board of Direct Taxes and
Revenue and Ors. [1998 (5) SCC 77]
b. In re: Yamaha Motors Pvt. Ltd [2007 (214) ELT 129 (Set
Comm.)]
c. In re: Kitex Garments Ltd. [2007 (212) ELT 254 (Set Comm)]
d. In re: Chandra Industries [2004 (177) ELT 775 (Set Comm)]
e. In re: Pee Jay International Ltd. [2004 (178) ELT 1069 (Set
Comm)]
f. In re: Kansal Industries [2007 (220) ELT 619 (Set Comm)]
17. It is further argued that the EBSPL had imported similar subject
equipment even in the past and since the said equipment was to be re-
exported, infact, no duty was payable by EBSPL. In the normal course, if the
imports were made, even if the duty was deposited, EBSPL would have
been entitled to drawback of the said duty. Thus, EBSPL has suffered
immensely already and the penalty ought to be waived/quashed.
18. On behalf of the Respondent Department, Mr. Harpreet Singh, ld.
SSC has made his submissions and has taken the Court through the
impugned order, wherein, there are specific findings of the Settlement
Commission that there was a deliberate attempt to evade customs duty. It is
his further argument that EBSPL is a well-established broadcasting
equipment and service provider. Thus, it was fully aware of the customs
duty that would be imposed and in order to avoid payment of the duty, this
modus operandi was adopted by EBSPL.
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19. The ld. SSC submits that the statements of the Customs
Clearinghouse Agents, etc., which are recorded by the Settlement
Commissioner in the impugned order would infact show that there was a
deliberate attempt to evade duty by mis-declaration. He relies upon the
following decisions:
a. Chawla Enterprises Ltd. v. Commissioner of Customs (Acc),
New Delhi 2004 (175) E.L.T. 61 (Del.)
b. Chawla Enterprises Ltd. v. Commissioner of Customs &Ors.
Review Petition No. 1578/2023 in SLP (C) No. 14263/2003.
c. Ashwani Tobacco Co. Pvt. Ltd. v. Union of India 2010 (251)
E.L.T. 162 (Del)
d. Ashwani Tobacco Co. Pvt. Ltd. v. Union of India Special
Leave to Appeal (Civil) No. 8902/2010
e. Union of India v. Ind-Swift Laboratories Ltd. 2011 (265)
E.L.T. 3 (S.C.)
f. Viva HerbaPvt. Ltd. v. Union of India 2023 (383) E.L.T. 423
(Bom.)
20. The Court has considered the matter. The Settlement Commission has
in the impugned order, disagreed with the Petitioners on both counts of
arguments raised by them. Firstly, it holds that there was a mis-declaration
and even on the value, the Settlement Commission does not agree with the
value proffered by the Petitioners. Some of the findings of the Settlement
Commission are relevant and are set out below:
“ 19. W e find that the applicant made an incorrect declaration at
the time of removal of goods from SEZ showing the purpose of
removal as "DEMO", whereas the goods were in fact removed
from SEZ for commercial purposes and thus in correctly availed
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benefit under Rule 50(1)(b) of SEZ Rules for Custom duty
exemption. In this manner, the applicant evaded payment of
appropriate Custom duty. The applicant has admitted this lapse
during investigation and in his Settlement application. As a
consequence, the applicants are liable to penalty and the goods
in question are liable to confiscation .
[...]
In the instant case, the applicant has not submitted any report
from overseas chartered engineer or equivalent agencies in
India notified by DGFT, or locally empaneled chartered
engineers, but has claimed that duty should be calculated on the
book value of the goods. This is not the prescribed procedure for
arriving at the value of the goods in view of the conditions laid
down in Customs Circular No 25/2015-Cus dated 15.10.2015. In
the absence of any of the reports laid down in Custom Circular
No 25/2015-Cus dated 15.10.2015, detailed above, the
Department had no alternative but to resort to apply the
depreciation rates as laid down in CBEC Circular No 493/124/86-
Cus VI dated 19.11.1987 on the invoice value of the goods which
was furnished by the applicant himself during the course of
investigations. Further, though the applicant has claimed that the
rates of depreciation as laid down in CBEC Circular No
493/124/86-Cus VI dated 19.11.1987 ought not to be applied in
the case of high end broadcasting equipment's which depreciate
very fast due to change in technology, but he has failed to produce
any instructions in circular, or notification to support his claim.
On the contrary, we find that Authority for Advance Rulings in its
order dated 5.8.2016 in case of M/s First Concept Production
Services Pvt Ltd, Gurgaon, has held that: 'determination of value
of the second-hand Broadcasting Equipment proposed to be
imported shall also be as per said Circular' i.e. Circular No
25/2015-Cus dated 15.10.2015.
As a result, and in view of specific procedure having being laid
down for allowing depreciation in value of imported goods, we do
not agree with the contention of the applicants and hold that DRI
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GUPTA
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has correctly reassessed the value of the imported goods in
accordance with CBEC Circular No 493/124/86-Cus VI dated
19.11.1987.
21. The Settlement Commission thus came to the conclusion that there
was a lapse by EBSPL in mis-declaration of the purpose for which the
subject equipment was imported, which was also admitted by EBSPL, for
which it is liable to penalty and confiscation. Thereafter, the Settlement
Commission also holds that the value assessed by the DRI was the correct
value.
22. The Settlement Commission also came to the finding that both the
Directors of EBSPL were well aware of the mis-declaration of the purpose
of removal of the goods and therefore, even the attribution of the blame to
the Customs Clearing house Agent would not absolve themselves from the
liability. The relevant paragraph from the impugned order is set out below:
“We also find from the statement dated 1.4.13 of Shri Saeed
Izadi that he himself and Shri Sandeep Mehtawere well aware of
the mis-declaration of the purpose of removal of goods, which
led to evasion of Custom duty. Both of them are therefore liable
to penal action . Their contention that the entire work relating to
clearance of impugned goods was outsourced to Brokeman
Logistics India Pvt Ltd is of no consequence since they cannot
absolve themselves of the liability in terms of the provisions of
Section 147 of the Customs Act, 1962.”
23. The Petitioner had obviously imported the subject broadcasting
equipment for the purposes of covering the IPL tournament and other cricket
events organised by the BCCI, which was in the nature of a temporary
import. The equipment were not being sold or disposed of in India. Thus,
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under normal circumstances, no duty would have been liable to be paid if
the declaration was properly made by the EBSPL. EBSPL would have been
entitled to claim duty drawback on the subject imports, as per applicable
norms.
24. However, for whatever reasons, may be under incorrect advice from
the Customs Clearinghouse Agent or otherwise, EBSPL resorted to import
the subject equipment through the Free Trade & Warehousing Zone by
wrongly declaring the same to be DEMO equipment. This misdeclaration
was clearly investigated by the DRI and thereafter, EBSPL had paid the
applicable customs duty for release of the subject equipment, albeit , prior to
the issuance of the SCN.
25. The Settlement Commission has considered the entire matter and has
imposed a substantial amount of penalty on the Petitioners. The Penalty has
also been imposed on the Directors to the tune of Rs. 10,00,000/- each. The
applicable customs duty which has already been paid by EBSPL to the tune
of approximately Rs. 9.73 crores, which in this case is a substantial amount.
26. Under normal circumstances, this duty would have been liable to be
refunded to the Petitioner if there was no misdeclaration, as the import was
merely temporary in nature.
27. Further, the total penalty imposed upon the Petitioner is to the tune of
Rs. 2 crores. Both the Directors were also well aware of misdeclaration.
Under such circumstances, in view of the findings of the Settlement
Commission and the fact that the misdeclaration was intentional, may be not
at the behest of the Petitioner but at the behest of the Customs Clearing
Agents, a benefit was sought to be gained by the Petitioner.
28. In these overall circumstances, the benefit that the Petitioner has
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obtained despite the misdeclaration is the immunity from the prosecution
and penalty under Section 127H of the Act.
29. In the opinion of the Court, the Settlement Commission cannot be
faulted for having imposed the penalty as was done.
30. However, in the overall facts, this Court is of the opinion that the
penalty upon the individual Directors deserves to be quashed, as the benefit
was sought to be obtained by the Company and not the Directors in their
individual capacity.
31. Bearing in mind the substantial customs duty that has already been
deposited to the tune of Rs.9.73 crore (approx), insofar as penalty on EBSPL
is concerned, the penalty is restricted to Rs. 50,00,000/-, out of which Rs.
25,00,000/- has already been deposited.
32. Let the remaining Rs. 25,00,000/- be deposited within a period of
three months with the Department. Subject to payment of the same, all
remaining penalties shall remain quashed.
33. The present petition is disposed of in the above terms. Pending
applications, if any, are also disposed of.
PRATHIBA M. SINGH
JUDGE
SHAIL JAIN
JUDGE
/tg/msh
DECEMBER 8, 2025
Signature Not Verified
Signed By:TANISHKA
GUPTA
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