#Penalty Proportionality

CESTAT Kolkata has ruled that importers who submit a valid emission certificate issued by a Ministry-empanelled laboratory cannot be penalized under Sections 112(a) and 114AA of the Customs Act merely because the Type Approval certificate is missing. This sets a critical precedent for environmental compliance in customs clearance, protecting bonafide importers from disproportionate penalties when core environmental standards are met.

The Securities Appellate Tribunal ruled that personal WhatsApp messages of a former employee cannot be used to impose liability on a registered investment adviser firm, emphasizing that penalties under the SEBI Act must be strictly proportionate to the adviser’s own conduct. This sets a critical precedent for digital evidence attribution and limits regulatory overreach in adviser misconduct cases.

The Securities Appellate Tribunal struck down a ₹5.69 crore penalty imposed on M. Prasad & Co. for reversal trades with its sister concern, ruling that penalizing both gross profit and gross loss sides without proving intent constitutes double punishment. This sets a critical precedent for brokers and NBFCs: penalties must be calculated on net gains, not aggregate transaction volumes, ensuring fairness under securities regulation.