2019 (10) TMI 1288 - AT - Customs

Suspension of CHA License - exporter had not filed BRCs against their draw back claim - HELD THAT - The suspension have been made by way of interim measure for alleged misgivings and/or or inaction on the part of the appellant for imports in the year 2015, almost after four years and as such interim suspension, pending enquiry is not warranted. The ruling of the Hon ble Bombay High Court in the case of COMMISSIONER OF CUSTOMS VERSUS NATIONAL SHIPPING AGENCY 2008 (1) TMI 400 - HIGH COURT OF JUDICATURE AT BOMBAY , wherein the Hon ble High Court have noted that the power to suspend as an interim measure is to be used in those cases, where it is required that the Customs Broker Licence be immediately suspended - In the instant case, the alleged violation was of the year 2015 and the order of suspension has been issued in 2019, itself indicates that there is no emergency which requires that the licence be suspended. It is therefore ordered that the continuation of the suspension of the appellant s CHA firm vide the impugned order is set aside. The Principal Commissioner of Customs (Preventive) is directed to complete the enquiry proceedings expeditiously preferably within a period of six months from the date of receipt of a copy of this order. The appellant CHA/CB firm is entitled to carry on its business as Customs House Agents/Customs Broker with immediate effect. Appeal allowed.

Summary

Issues involved:
- Alleged suspension of appellant's license for transacting export business without filing BRCs
- Appellant's compliance with Customs Broker Licensing Regulations
- Allegations of fraudulent export and manipulation by the Customs Broker
- Applicability of Regulation 16(1) of CBLR 2018
- Suspension order validity and necessity of immediate action
- Bombay High Court ruling on interim suspension of license
- Direction for expeditious completion of enquiry proceedings

Issue 1: Alleged suspension of appellant's license for transacting export business without filing BRCs

The appellant's license was suspended due to their involvement in handling export consignments where the exporter failed to submit Bank Realization Certificates (BRCs) against draw back claims. The department observed discrepancies in the export process, suspecting that certain consignments were not physically exported but only documented. The suspension was made under Regulation 16(1) of CBLR 2018.

Issue 2: Appellant's compliance with Customs Broker Licensing Regulations

The appellant argued that they complied with the provisions of Regulation 10(d) and 10(e) of CBLR 2018. They claimed to have verified the exporter's credentials and maintained proper documentation before handling the export consignments. The appellant contended that the allegations were based on assumptions and that they fulfilled their obligations as a Customs Broker.

Issue 3: Allegations of fraudulent export and manipulation by the Customs Broker

It was alleged that the Customs Broker facilitated the exporter in claiming export benefits without ensuring actual exportation. The Customs Broker's responsibility includes handling all documents until actual exportation occurs. The department suspected manipulation of the system to benefit the exporter without verifying the physical export of goods.

Issue 4: Applicability of Regulation 16(1) of CBLR 2018

The appellant contested the applicability of Regulation 16(1) of CBLR 2018 to their case, arguing that immediate suspension was not warranted. They emphasized that the duty drawback was paid to exporters without timely submission of BRCs, questioning the necessity of immediate action under the regulation.

Issue 5: Suspension order validity and necessity of immediate action

The Tribunal found that the suspension order was an interim measure based on alleged misgivings from 2015, issued in 2019. Citing a Bombay High Court ruling, the Tribunal concluded that the suspension lacked urgency as the alleged violation occurred several years prior. The Tribunal set aside the suspension order, allowing the appellant to resume business as a Customs Broker.

Issue 6: Bombay High Court ruling on interim suspension of license

The Tribunal referenced a Bombay High Court ruling emphasizing that interim suspension should only be used in cases requiring immediate action. In this instance, the delay between the alleged violation and suspension indicated no emergency warranting immediate license suspension.

Issue 7: Direction for expeditious completion of enquiry proceedings

The Tribunal directed the Principal Commissioner of Customs to conclude the enquiry proceedings promptly, preferably within six months. This direction aimed to ensure a timely resolution of the case while allowing the appellant to continue operating as a Customs Broker.

This detailed analysis covers the key issues addressed in the judgment, providing a comprehensive overview of the legal aspects and arguments presented by the parties involved.