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2019 (4) TMI 398 - HC - CustomsRevocation of CHA License - Forfeiture of security deposit - whether there was violation of Regulations 18 and 20 of Customs Broker Licensing Regulations, 2013 or not - Held that - In this case the Customs Authorities have not held that any clandestine material was brought or that the goods were misdeclared or the contraband was the subject matter of the Bill of Entry in question. The role of the appellant was merely one of a facilitator. There is no material on record to show that the KYC documents were fraudulent or incorrect or in any manner irregular. In these circumstances, to expect the CB holder to carry out further investigations and independent inquiry not only about the existence of importing firm but also about its real owner is beyond the mandate of the law. Appeal allowed - the question of law is answered in favour of the appellant.
Issues:
Violation of Customs Broker Licensing Regulations, 2013 - Regulations 18 and 20; Forfeiture of security deposit. Analysis: Issue 1: Violation of Customs Broker Licensing Regulations, 2013 - Regulations 18 and 20 The case involved a Customs License holder who was alleged to have facilitated a Bill of Entry for an importing firm, M/s. Shiva Enterprises. The appellant was accused of impropriety in facilitating the entry, leading to a show cause notice under the Customs Broker Licensing Regulations, 2013. The Commissioner imposed penalties based on violations of Regulations 11(a), 11(d), 11(e), and 11(h) of the CBLR Regulations, 2013. The Tribunal set aside the revocation order but upheld the forfeiture and penalty. The appellant argued that using correct documents of an existing firm did not imply a violation of the regulations, especially when the true owner was different from the apparent owner. The High Court agreed, noting that the appellant's role was that of a facilitator, and there was no evidence of fraudulent documents or illegal activities related to the goods in question. The Court held that expecting the Customs Broker to conduct extensive investigations beyond legal requirements was unreasonable, ultimately ruling in favor of the appellant. Issue 2: Forfeiture of Security Deposit The primary issue regarding the forfeiture of the security deposit was intertwined with the alleged violation of the Customs Broker Licensing Regulations. The Commissioner's order included the forfeiture of security along with other penalties. However, the High Court, after analyzing the facts and the legal obligations of the Customs Broker, found no substantial evidence to warrant the forfeiture. Since the appellant's actions were deemed within the scope of a facilitator and there were no indications of fraudulent activities or irregularities in the documentation, the Court concluded that the forfeiture was not justified. As a result, the Court set aside the concurrent findings of the Commissioner and the Tribunal, allowing the appeal and ruling in favor of the appellant. In conclusion, the High Court's judgment in this case revolved around the appellant's alleged violation of Customs Broker Licensing Regulations, 2013, specifically Regulations 18 and 20, and the subsequent forfeiture of the security deposit. The Court found in favor of the appellant, emphasizing the lack of evidence supporting the alleged violations and the reasonable expectations from a Customs Broker in verifying the authenticity of documents. The decision highlights the importance of considering the specific roles and responsibilities of individuals within the customs framework when determining liability and penalties.
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