2018 (11) TMI 1230 - AT - Customs

Jurisdiction - Revocation of CHA License - fraudulent availment of draw back by some fictitious firm - it was alleged that the appellant and M/s. Pawan Kumar Tiwari has facilitated the customs clearance of the exported goods of certain fictitious exporting firms. Held that - The cause of action arose in Delhi Customs and prohibition order was issued to them, which resulted suspension and revocation of the appellant s licence in Kolkata Customs House. It is on record that Hon ble Cestat, New Delhi has set aside the prohibition order issued by the Commissioner of Customs (General), New Delhi. It is also on record that the said order of the Cestat, New Delhi has been accepted by the Commissioner of Customs, Kolkata vide letter dated 04.12.2017 . No other evidence regarding involvement of appellant is on record before the respondent Commissioner - there is no justification for revoking the CHA licence of the appellant at the strength of allegation contained in the order of the Commissioner of Customs, Delhi, which has been set aside by Hon ble CESTAT, New Delhi and Revenue has not preferred any appeal against the order. Appeal allowed - decided in favor of appellant.

Summary

Issues: Revocation of Customs Brokers License under Regulation 20 of Customs Brokers Licensing Regulation, 2013 (now Regulation 17 of Customs Brokers Licensing Regulation, 2018) based on alleged involvement in fraudulent activities.

Detailed Analysis:
1. The appellant held a Customs House Brokers License issued by the Commissioner of Customs, Kolkata, valid until 07.01.2026, allowing operations in both Kolkata and Delhi Customs jurisdictions.
2. The license suspension was based on a report from Delhi Customs regarding alleged involvement in a fraudulent drawback case, where the appellant facilitated customs clearance for fictitious exporting firms.
3. The appellant's defense included appointing a manager for Delhi operations, claiming compliance with necessary export documentation, and emphasizing the approval of exports by the proper officer of Delhi Customs.
4. The Delhi DRI investigation revealed discrepancies in export documentation and fictitious exporters availing drawback benefits, leading to the appellant's license suspension.
5. The appellant challenged the suspension, citing a Cestat, New Delhi order setting aside the prohibition order from Delhi Customs, but the suspension was not withdrawn, and an inquiry confirmed violations of licensing regulations.
6. The appellant argued against the inquiry report, highlighting procedural irregularities and the lack of consideration for facts presented.
7. The respondent Commissioner revoked the license and forfeited the security deposit based on the inquiry report, ignoring the Cestat order and appellant's submissions.
8. The Tribunal found no justification for license revocation, as the Cestat order nullified the Delhi Customs allegations, with no additional evidence supporting the appellant's involvement.
9. Consequently, the Tribunal set aside the revocation order and allowed the appeal, providing any consequential benefits.

This detailed analysis outlines the sequence of events leading to the revocation of the Customs Brokers License, the appellant's defense, procedural challenges faced, and the Tribunal's decision based on the lack of evidence supporting the allegations after the Cestat order nullified the initial prohibition from Delhi Customs.