2022 (9) TMI 1503 - HC - Customs

Suspension of License of Customs Broker - concealment of red sanders, (prohibited for export), in a cargo of oil tankers exported using the services of the petitioner - HELD THAT - Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent- Department, this writ petition is disposed of, directing that the show cause notice issued to the petitioner on 13.09.2022 shall be adjudicated in accordance with law, within a period of three months from the date of receipt of a certified copy of this judgment. The interim order dated 29.08.2022 will continue till the final orders are passed (in the adjudication). Learned counsel appearing for the petitioner undertakes that the petitioner will co-operate with the adjudication proceedings and will adhere to the timelines for submission of reply etc., and no unnecessary adjournments will be sought in the matter. This is recorded. It is also clarified that the observations in the interim order dated 29.08.2022 are only for the purpose of considering the entitlement of the petitioner for interim relief and shall not be treated as a finding by this Court on any point.

Summary

Issues:
Proceedings under Customs Brokers Licensing Regulations (CBLR), 2018 initiated against the petitioner due to alleged violation of regulations leading to suspension of license.

Analysis:
The petitioner challenged the suspension of their license under the Customs Brokers Licensing Regulations, 2018, following the discovery of red sanders concealed in an exported cargo of oil tankers processed through the petitioner's services. The petitioner contended that they should not be held accountable for the exporter's actions, as all Know Your Customer (KYC) documents were genuine and in compliance with regulations. The petitioner argued that the suspension was an extreme measure affecting their business and employees' livelihood, emphasizing that the Customs Broker cannot be held responsible for all actions of the exporter if proper documentation is in place.

The respondent Department, represented by the Standing Counsel, highlighted the importance of compliance with Regulation 10(n) of the Customs Brokers Licensing Regulations, 2018, citing relevant judgments to stress the mandatory nature of these requirements. The Department emphasized the crucial role of Customs Brokers in import and export processes, asserting that any breach of obligations must result in regulatory action. Reference was made to prior judgments against the petitioner for similar violations.

Upon hearing both parties, the Court acknowledged the significance of the Customs Broker's responsibilities but opined that if the necessary documents verifying the exporter's identity and compliance were in order, the Customs Broker should not be penalized for the exporter's misconduct. The Court granted an interim order to the petitioner, subject to strict compliance with the Customs Brokers Licensing Regulations, 2018 until a specified date. The Court clarified that this order did not hinder ongoing proceedings against the petitioner.

Subsequently, the respondent Department informed the Court that the petitioner's license had been restored, and a show cause notice was issued for adjudication. The Court disposed of the petition, directing the adjudication of the show cause notice within three months while maintaining the interim order. The petitioner committed to cooperating with the adjudication process and adhering to timelines, with the Court clarifying that the interim order's observations did not constitute definitive findings.

In conclusion, the judgment addressed the petitioner's challenge against the license suspension under the Customs Brokers Licensing Regulations, emphasizing the importance of proper documentation and compliance with regulatory obligations for Customs Brokers while ensuring a fair adjudication process for the petitioner.