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2015 (8) TMI 489 - HC - CustomsRenewal of Customs Brokers License Rejected Misconduct and suppression of information Respondents application for renewal of License was rejected by Appellant, on ground of information of misconduct received from various port of country, therefore, show cause notice was issued Tribunal by impugned order reversed decision of Commissioner Held that - Commissioner denied renewal of licence primarily on ground that there was complaint of misconduct and also because respondent had suppressed material information required to be declared under Regulation Conditions to be fulfilled by applicant for grant of licence were provided for in Regulation 5 In said application, respondent had given declaration which explicitly make it clear that it was categorical statement made by respondent that there was no judicial/quasi judicial cases pending against it Explanation provided by respondent does not deserves to be accepted This clearly amounts to suppression of material information required to be furnished by respondent at time of making declaration Appeal hereby allowed Decided in favour of Revenue.
Issues Involved:
1. Whether the CESTAT ignored relevant evidence regarding pending prosecution against the respondent firm. 2. Whether the CESTAT's order is sustainable given the agreement with the Commissioner's finding that a complaint need not be proven. 3. Whether the CESTAT correctly held that the Commissioner must independently examine the gravity of the offense before any authority's order. 4. Whether the CESTAT's order is valid considering the allegations of misconduct relating to the Customs Act's administration. 5. Whether the CESTAT's order is valid in light of Regulation 5(d) of the Customs Broker Licensing Regulations, which debars individuals with pending criminal prosecution from obtaining a license. Detailed Analysis: Issue 1: Ignoring Relevant Evidence Regarding Pending Prosecution The appellant argued that the CESTAT ignored relevant evidence about the pending prosecution against the respondent firm. The Commissioner of Customs denied the renewal of the license because the respondent suppressed material information about a pending criminal case under Sections 120B, 420, 468, and 471 of the Indian Penal Code. The respondent contended that the declaration was correct as no judicial/quasi-judicial case was pending in Bengaluru. However, the court found that the respondent, being a seasoned Customs Broker operating in multiple ports, should have disclosed the pending criminal case in Kolkata. This non-disclosure amounted to "suppression of truth and suggesting falsehood." Issue 2: Sustainability of CESTAT's Order The appellant contended that the CESTAT's order was unsustainable as it overlooked the Commissioner's finding that a complaint need not be proven to deny license renewal under Regulation 9(2) of the 2013 Regulations. The court agreed, noting that the respondent's suppression of the pending criminal case was sufficient grounds for rejecting the renewal application. The court emphasized that the respondent's deliberate non-disclosure was a material suppression of information required under Regulation 5(d). Issue 3: Independent Examination of Offense Gravity The CESTAT held that the Commissioner must independently examine the gravity of the offense before any authority's order. The appellant argued that the CESTAT wrongly directed the renewal of the license without considering the factual aspects. The court found that the respondent's suppression of the pending criminal case was a clear violation of the required declarations, justifying the Commissioner's decision to deny the renewal. Issue 4: Allegations of Misconduct and Customs Act Administration The appellant argued that the CESTAT's order was invalid given the allegations of misconduct directly related to the Customs Act's administration. The court noted that the respondent's failure to disclose the pending criminal case, which was related to its activities as a Customs Broker, was a significant factor. The court held that the respondent's conduct justified the denial of the license renewal, supporting the appellant's position. Issue 5: Regulation 5(d) and Pending Criminal Prosecution The appellant contended that the CESTAT's order was invalid under Regulation 5(d) of the Customs Broker Licensing Regulations, which prohibits individuals with pending criminal prosecutions from obtaining a license. The court agreed, stating that the respondent's suppression of the pending criminal case was a clear violation of Regulation 5(d). The court emphasized that the respondent's deliberate non-disclosure was a material suppression of information required under the regulations. Conclusion: The court allowed the appeal, answering the substantial questions of law in favor of the revenue-appellant and against the respondent. The court found that the CESTAT's direction for the renewal of the license was unjustified both in law and on the facts of the case. The respondent's suppression of the pending criminal case was a significant factor justifying the denial of the license renewal.
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