2016 (1) TMI 426 - AT - Customs

Suspension of customs brokers licence - the suspension was ordered and confirmed on the ground that the appellant had violated the provisions of Regulation 11(a) 11(d) 11(j) 11(m) and 11(n) of CBLR 2013. - Overvaluation to avail of undue benefits of Duty Draw Back and Focus Product Schemes - export of floor coverings - Investigation further revealed that several exporters were non-existent and the Import Export (IE) codes were obtained using identity of persons who were not actually exporters. Held that - the appellant was not engaged by any of the exporters to deal with the export of the impugned goods and therefore the question of violation of any of the above-quoted provisions of CHALR by the appellant simply does not arise. Thus the ground on which the suspension of licence was confirmed is totally unsustainable. While the appellant has denied receipt of any payments in respect of the clearances of the impugned goods we find that some of the exporters of the impugned goods had dealings with the appellant inasmuch as certain ledger accounts of the appellant show debit and credit entries in the name of some such exporters but that by itself would not make the appellant guilty of violation of CBLR 2013 when it has already held above that in the present case CBLR 2013 could not have been violated by the appellant when it was not the customs broker in relation to the impugned goods. - Decided in favor of appellant.

Summary

Issues:
- Appeal against suspension of customs broker license under CBLR, 2013.

Analysis:
1. The case involved an appeal against the suspension of a customs broker's license under CBLR, 2013. The Commissioner of Customs suspended the license based on violations by the appellant, a logistics company, in handling export consignments. The investigation revealed misdeclaration and overvaluation of goods by exporters, with the appellant allegedly involved in manipulation and misconduct.

2. The appellant contended that it was not the customs broker for the impugned exports and had not violated CBLR, 2013. They argued that the suspension was unjustified, citing legal precedents on immediate action requirements and suspension criteria. The Departmental Representative argued that the appellant was complicit in misconduct, receiving payments from exporters, and colluding with related entities.

3. The Tribunal analyzed the evidence and contentions. It clarified that the actual customs broker was a different entity, not the appellant. The legal principle of separate legal entities for companies was emphasized, absolving the appellant of direct responsibility for the violations. The Tribunal highlighted that the appellant's employees had no legal authority to handle the impugned goods, as they were not the customs broker.

4. Regarding the suspension process, the Tribunal examined the adherence to timelines prescribed by Circular No. 9/2010-Cus. It found that the Commissioner had followed the prescribed timelines for suspension and subsequent actions, contrary to the appellant's argument. The Tribunal dismissed the relevance of legal judgments cited by the appellant, as the Commissioner had adequately justified the suspension based on the circumstances.

5. Ultimately, the Tribunal set aside the impugned order, ruling in favor of the appellant. The decision was based on the lack of evidence supporting the appellant's direct involvement as a customs broker in the violations cited under CBLR, 2013. Despite some financial dealings with exporters, the Tribunal concluded that the appellant could not be held liable for violations it did not commit.

This detailed analysis of the judgment highlights the legal intricacies involved in the appeal against the suspension of the customs broker license, emphasizing the importance of distinct legal entities and adherence to procedural timelines in such cases.