2018 (12) TMI 31 - AT - Customs

Revocation of CHA License - forfeiture of security deposit - involvement of CHA in the offence - contravention of the Regulation 10 of the CBLR, 2013 - penalty - Held that - The involvement of the appellant or its partner in the alleged customs offence detected and investigated by the DRI is not established. The bill of entry for the import was filed in the name of the appellant using his Customs Broker Licence number. In the statements recorded from Shri Arup Mukherjee, he has submitted that the import declaration form bears his signature, but he could not explain how the blank form signed by him found its way into the hands of Shri Barun Chanak. But what stands established is that the partner of the appellant has signed and handed over the import declaration form without filling up the details of any particular import. This has given room for misuse of such form subsequently. The contravention of the Regulation 10 of the CBLR, 2013 stands established against them - the ends of justice would be met by imposition of penalty of ₹ 25,000/- on the appellant - revocation of the Customs Broker Licence is not justified - appeal allowed in part.

Summary

Issues:
Revocation of customs broker license and forfeiture of security deposit based on alleged contravention of Customs Broker Licensing Regulations.

Analysis:
The appellant, a licensed customs broker, filed an appeal against the revocation of their license and the forfeiture of the security deposit by the adjudicating authority. The case stemmed from an investigation by the Directorate of Revenue Intelligence (DRI) into import consignments, specifically a bill of entry filed by the appellant for M/s. A.G. Enterprises. The DRI found undeclared high-value items in the consignment, leading to a show cause notice for alleged customs offenses. The Licensing Authority suspended and later revoked the appellant's license, citing contravention of Customs Broker Licensing Regulations. The appellant challenged the order, arguing against the allegations.

The appellant's advocate contended that the main charge of contravention of Regulation 10, prohibiting the sale or transfer of the license, was unfounded. They disputed the alleged violations of Regulation 11 and highlighted discrepancies in the DRI investigation, pointing out that another individual had filed the bill of entry using a blank form obtained from a former employee of the appellant. The advocate emphasized that the appellant was not properly informed of the allegations or given the opportunity for cross-examination, thus challenging the basis for the license revocation.

On the other hand, the Departmental Representative supported the adjudicating authority's decision, citing admissions by the partner of the appellant firm regarding the signed blank declaration form used in the bill of entry. The representative argued that the partner's actions amounted to sub-letting the license, and the lack of filing an FIR or reporting the incident indicated complicity. After hearing both sides and reviewing the records, the Tribunal found that while the appellant had contravened Regulation 10, the extent of their involvement in the customs offense was not conclusively established.

Ultimately, the Tribunal determined that a penalty of &8377; 25,000 was appropriate considering the gravity of the violation, but the revocation of the customs broker license was unjustified. The decision to set aside the revocation was based on the lack of clear evidence linking the appellant to the customs offense. The judgment highlighted the importance of establishing culpability and proportionate penalties in regulatory enforcement, leading to the partial allowance of the appeal on 29.11.2018.