2018 (7) TMI 107 - AT - Customs

Revocation of CHA License - penalty - time limitation - Held that - Regulation 18 of CBLR provides for revocation of licence of the Custom House Broker and forfeiture of part or whole of security or imposition of a penalty not exceeding ₹ 50,000/- on the Customs Broker for misconducts mentioned therein. The procedure to be followed either in revoking the licence or imposing penalty is given in Regulation 20. Thus, it is evident that revocation of licence is not the only penalty which can be imposed for acts of omission or commission by the Custom Broker; even a penalty can be imposed on him. Detailed procedure has been laid down in the Regulation 20 for either revocation of licence or for imposing penalty. The process starts with a notice to be issued by the Commissioner of Customs to the Custom House Broker within a period of 90 days from the date of receipt of offence report stating the grounds on which it is proposed to revoke the licence or impose penalty. The suspension of the licence cannot be a substitute for either revocation or imposition of penalty on the appellant, although Regulation 19 does not indicate for how long the licence can be suspended. It does indicate that licence may be suspended where immediate action is necessary where an enquiry against the Customs Broker is pending or contemplated. Now, neither the enquiry can be completed nor action taken under Regulation 18 against appellant unless the offence report is received from the New Customs House, Delhi, which is not forthcoming despite reminders by the Principal Commissioner of Customs, Hyderabad. The suspension of licence of the Customs broker is no longer justified and cannot be used as a substitute for revocation of his licence or imposition of penalty on him under CBLR - the continuation of the suspension of the appellant s licence vide the aforesaid Order-in-Original needs to be set aside - appeal allowed.

Summary

Issues:
Appeal against suspension of Customs Broker Licence under Regulation 19 of CBLR, 2013 pending investigation and enquiry.

Analysis:
The case involved an appeal against the suspension of a Customs Broker Licence under Regulation 19 of the Customs Brokers Licensing Regulations, 2013. The appellant, a licensed Customs House broker based in Hyderabad, was prohibited from operating in New Customs House, Delhi, following allegations of involvement in fraud committed by exporters. The Principal Commissioner of Customs, Hyderabad, suspended the appellant's licence pending further investigation and enquiry based on a letter from New Customs House, Delhi. The appellant argued that the suspension was unjustified as no further action had been taken to revoke their licence, and they had submitted an application for renewal under Regulation 19(2) of CBLR, 2013. The appellant contended that the suspension should not be a substitute for penalty and that they were not involved in the frauds committed by the exporters.

The appellant relied on various case laws to support their argument that suspension under Regulation 19 is a temporary measure and cannot replace the due process for revocation of licence or imposition of penalties under the regulations. The Departmental Representative (DR) argued that the suspension was justified as the appellant failed to verify the credentials of the exporters involved in fraud. The Tribunal examined the provisions of Regulation 18 and Regulation 20 of CBLR, which provide for revocation of licence or imposition of penalties on Customs Brokers for misconduct. The process for revocation or penalty imposition involves issuing a notice to the broker within a specified period, which was not followed in this case.

The Tribunal noted that despite reminders, the offence report from New Customs House, Delhi, had not been received by the Principal Commissioner of Customs, Hyderabad. It was observed that the suspension of the licence could not be a substitute for revocation or penalty imposition, and the suspension could not continue indefinitely without following the due process outlined in the regulations. The Tribunal cited relevant case laws to support the view that suspension should not be prolonged without proper grounds and due process. Additionally, the acknowledgment of the appellant's renewal application indicated a positive step towards renewing their licence till 2028. Therefore, the Tribunal allowed the appeal, setting aside the suspension of the appellant's licence with immediate effect, pending the receipt of the offence report for further action under the regulations.