Customs House Agent cleared of duty drawback fraud allegations after proving proper verification and due diligence procedures

CESTAT overturned penalties imposed under Customs Act sections 114(i), 114(iii), and 114AA against appellant CHA regarding alleged duty drawback fraud through overvalued garment exports. The Tribunal found appellant conducted proper due diligence by verifying KYC documents, obtaining necessary authorizations, and following standard clearance procedures. Exports underwent physical examination without objections to quality or value. No evidence demonstrated appellant's involvement in fraudulent activities or receipt of benefits from duty drawbacks. Following precedents from Mauli Worldwide Logistics and Kunal Travels cases, CESTAT held CHAs are not required to verify authenticity beyond standard document processing. Given lack of evidence supporting allegations, penalties were set aside and appeal allowed. .....

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