2020 (1) TMI 489 - AT - Customs

Revocation of CHA License - forfeiture of security deposit - no physical interaction with the exporter was made - smuggling of Red Sanders - export consignment which was cleared by the appellant through the impugned Shipping Bill which pertained to HB wires contained logs of Red Sanders, which is banned for export in terms of export and import policy - violation of provisions of Section 11A, 11 (d), 11 (1), 11 (n) of CBLR - HELD THAT - The appellant has not obtained the job of clearance of export consignment directly through exporter M/s. Panel Pin Manufacturing, but through series of intermediary which included manipulation of Red Sander smuggling. Though the necessary verification about such KYC etc., was conducted by the appellant, however, no physical interaction with the exporter was made. This in itself will not be a major infraction of the Provisions of CBLR which does not envisage the physical verification of the exporters and antecedent including the verification of factory premises of the exporter and the goods contained in the container. The revocation of the license of CHA is disproportionate of the offence committed by them under the various provisions of CBLR 2013 as amended. So is the case of forfeiture of the Security Deposit - But in the fact and circumstances of the case, we also find that the appellant deserves to be cautioned and vigilant in future for taking appropriate precaution while entering into the business through intermediaries. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Revocation of Customs Broker License.
2. Forfeiture of Security Deposit.
3. Alleged Violations of CBLR Provisions.
4. Procedural Lapses and Due Diligence.
5. Proportionality of Punishment.

Detailed Analysis:

1. Revocation of Customs Broker License:
The Customs Broker License of the appellant, M/s. Mallick Clearing Agency, was revoked by the Commissioner of Customs under Regulation 18 of CBLR, 2013. The revocation was based on the involvement of the appellant in the attempted smuggling of Red Sanders logs, which were found in a mis-declared export consignment. The Tribunal found that although the appellant obtained the job through intermediaries and did not have direct interaction with the exporter, this did not constitute a major infraction under the CBLR provisions. The Tribunal noted that the goods were container-stuffed in the presence of a Central Excise Officer, and the seals were found intact at the time of the attempted export. Therefore, the revocation of the license was deemed disproportionate to the offense committed.

2. Forfeiture of Security Deposit:
Along with the revocation of the license, the appellant's security deposit was forfeited under Regulation 18 of CBLR, 2013. The Tribunal found this action to be excessive, considering the nature of the appellant's involvement. It was noted that the appellant had conducted necessary KYC verifications, and there was no evidence of mala fide intent. The Tribunal emphasized the need for proportionality in punishment and concluded that forfeiture of the security deposit was not justified.

3. Alleged Violations of CBLR Provisions:
The appellant was charged with violating several provisions of CBLR, 2013, including Regulations 11A, 11(d), 11(k), and 11(n). The Tribunal examined these alleged violations in detail:
- Regulation 11A: The appellant had obtained authorization before filing the Shipping Bill, and therefore, it could not be alleged that Regulation 11A was violated.
- Regulation 11(d): The goods were found in a sealed container, and there was no failure on the appellant's part to advise the client to act as per law.
- Regulation 11(k): The required documentation was already with the appellant and was handed over to DRI.
- Regulation 11(n): The appellant had verified the exporter’s credentials from Central Excise and Registrar of Companies records.

4. Procedural Lapses and Due Diligence:
The Tribunal acknowledged that the appellant had obtained the job through intermediaries and did not have direct interaction with the exporter. However, it was noted that the appellant had conducted necessary verifications and had followed the required procedures. The Tribunal found that the lack of physical interaction with the exporter did not constitute a significant procedural lapse under CBLR provisions. The Tribunal also noted that the Commissioner had disallowed the cross-examination of Central Excise Officers, which was a procedural shortcoming.

5. Proportionality of Punishment:
The Tribunal placed reliance on the decisions in the cases of Ashiana Cargo Services Vs. CC and C. J. Joshi & Sons Vs. Commissioner of Customs, which emphasized the need for proportionality in punishment. The Tribunal concluded that the revocation of the license and forfeiture of the security deposit were disproportionate to the offense committed. The Tribunal highlighted that revocation of a license is a grave punishment, depriving the person of their livelihood. The Tribunal set aside the impugned order, restored the appellant’s license, and cautioned the appellant to be vigilant in future dealings.

Conclusion:
The Tribunal set aside the impugned order, allowed the appeal, and restored the appellant’s Customs Broker License, including the security deposit. The Tribunal emphasized the need for proportionality in punishment and cautioned the appellant to exercise due diligence in future transactions.