2018 (4) TMI 1790 - AT - Customs

Revocation of CHA License - imposition of penalty - import of Defective C.R. Coils and Defective Hot Rolled Coils claiming benefit of Notification Nos. 46/2011-Cus. and 69/2011-Cus - allegation that importer had not submitted AIFTA Certificate of origin in the formats as prescribed in the notifications - violation of Regulation 11(d) of the CBLR. HELD THAT - There is no allegation that the certificates were not issued by the authority in the exporting country or that they did not cover the goods imported. In any case, on being pointed out about the discrepancy, the importers have paid up the differential customs duty - This being the case, no fraud or connivance can be attributed to the appellants. At the most, they could be hauled up for not having advised the importers suitably even after the discrepancy was flagged to them. However, the revocation of the licence, is surely, an over-kill; the same cannot be sustained and is therefore set aside - However, the penalty of ₹ 50,000/- imposed by the adjudicating authority need not be interfered with. Appeal allowed in part.

Summary

Issues: Revocation of Customs Broker Licence and Penalty Imposition under CBLR

Revocation of Customs Broker Licence:
The dispute centered around the revocation of the Customs Broker Licence issued to the appellants, along with the imposition of a penalty of ?50,000 under the Customs Broker Licencing Regulations, 2013 (CBLR). The appellants had represented importers who had imported "Defective C.R. Coils" and "Defective Hot Rolled Coils" claiming benefits under specific notifications. The issue arose as the importers had not submitted the required AIFTA Certificate of origin in the prescribed formats, leading to non-compliance with Regulation 11(d) of the CBLR. The appellants argued that they had exercised due care and diligence, emphasizing that the certificates were not forged or fraudulent but were not in the prescribed format.

Due Care and Diligence:
The appellants contended that they had taken necessary care in representing the importers, and while there was a lack of diligence when informed by Customs authorities about the incorrect nature of the certificates, they had not committed fraud or connivance. The appellants were faulted for not advising the importers appropriately after being made aware of the discrepancy in the certificates. Despite the non-compliance, the importers rectified the situation by paying the differential customs duty. The Tribunal acknowledged the lack of diligence on the part of the appellants but noted that the certificates were genuine and covered the imported goods. The Tribunal found the revocation of the licence to be excessive and set it aside, while upholding the penalty of ?50,000 imposed by the adjudicating authority.

Conclusion:
The Tribunal partially allowed the appeal by setting aside the revocation of the licence but upheld the penalty. The decision highlighted the importance of advising importers appropriately and complying with regulatory requirements, emphasizing the need for customs brokers to exercise due diligence in ensuring compliance with all prescribed formats and procedures under the Customs Broker Licencing Regulations.