2023 (3) TMI 1405 - HC - Customs

Interpretation of statute - the word 'issue' as mentioned in Regulation 20(1) of Customs Broker Licensing Regulation, 2013/2018 has to mean simpliciter issuance or to be read as 'served' or not - for the goods stored in Customs Bonded Warehouse, after its clearance from the port, a CHA can be charged for violation Customs Broker Licensing Regulation or not - Revocation of Customs Broker License - forfeiture of security deposit - penalty. Whether the word 'issue' as mentioned in Regulation 20(1) of Customs Broker Licensing Regulation, 2013/2018 has to mean simpliciter issuance or to be read as served ? - HELD THAT - The same is covered against the appellant by a recent judgment of this Court in Commissioner of Customs (Airport General) v. M/s R.P. Cargo Handling Services 2023 (3) TMI 250 - DELHI HIGH COURT where it was held that In the present case, there is no ambiguity in the language of Regulation 20(1) of the CBLR. It requires that the Commissioner issues a notice within the period of ninety days from the receipt of the offence report. There is, thus, no reason to construe the expression issue any different from its plain meaning. Whether, for the goods stored in Customs Bonded Warehouse, after its clearance from the port, a CHA can be charged for violation Customs Broker Licensing Regulation, 2013/2018? - HELD THAT - There is an allegation regarding the appellant not complying with the KYC conditions. It is contended that the importer firm had been constituted by one Mr. Ramesh Wadhera, who had allegedly financed the said firm, and there is an allegation that his employees were reflected as the owners of the said firm. According to the appellant, it had dealt with one Mr. Sanjeev Maggu, who had represented himself as the Chief Manager of the firm in question - there is no analysis in the impugned order as to whether the appellant had any obligation in law to report any offence in relation to the goods after the same had been imported and after the professional role of the customs broker in clearance of the goods had ended. The impugned order on merits ought to be set aside and the Tribunal be directed to consider the allegations afresh as well as to decide the question of proportionality of the punitive measure imposed on the appellant - At her request, list on 06.04.2023.

Summary

Issues:
1. Interpretation of the term 'issue' in Customs Broker Licensing Regulation, 2013/2018.
2. Liability of a Customs House Agent (CHA) for goods stored in Customs Bonded Warehouse after clearance.

Analysis:
1. The appellant challenged the rejection of their appeal against the revocation of their Customs Broker Licence, forfeiture of security deposit, and imposition of a penalty. The first issue raised was the interpretation of the term 'issue' in Regulation 20(1) of Customs Broker Licensing Regulation, 2013/2018. The Court referred to a previous judgment and held that the term 'issue' should not be read as 'served.'

2. The second issue was whether the appellant could be held liable for the violation of Customs Broker Licensing Regulations, 2018 due to goods being diverted from Customs Bonded Warehouses after clearance. The appellant claimed they had no role in the diversion. The punitive measures were imposed based on non-compliance with certain clauses of the Regulations. However, there was no evidence that the appellant did not carry out the work personally or through an authorized employee.

3. The appellant had filed nineteen shipping bills allegedly at the instance of another individual. The Court noted that there was no allegation of illegal importation or irregularity in filing bills of entry. The main issue was the diversion of goods after clearance, not related to the appellant's compliance with the Act and Regulations.

4. Allegations were also made regarding non-compliance with KYC conditions and dealings with individuals representing the importer firm. The appellant admitted to not informing Customs Authorities about the re-export of goods stored in warehouses, acknowledging their mistake. However, there was no analysis in the impugned order regarding the appellant's obligation to report offenses post-clearance.

5. The Court found that the impugned order lacked an assessment of the appellant's legal obligation to report offenses after the goods were imported and cleared. The question of whether the punitive measures imposed were warranted and proportional was raised. A similar case involving another customs broker was referred to the Tribunal for fresh consideration.

6. Ultimately, the Court decided to set aside the impugned order and directed the Tribunal to reevaluate the allegations against the appellant and consider the proportionality of the punitive measures. The respondent sought time for further instructions and submissions, leading to the case being listed for a future date.