2020 (6) TMI 185 - AT - Customs

Revocation of Customs Broker license - forfeiture of security deposit - imposition of penalty - allegation that the appellant had colluded with the exporters to over value the goods for obtaining excess duty drawback - non-fulfilment of requirement of Regulations 11(b), 11(d), 11(e) and 11(n) of CBLR 2013 - HELD THAT - In the impugned order, the Commissioner has held that the appellant has not directly interacted with the IEC holders and is guilty of violation of Regulation 17(d) of CBLR 2013. This finding is factually incorrect because in the statements of Mr. Mohammad Yusuf Siddique, G Card holder and Power of Attorney of the appellant at Mumbai, he has stated in his statement dt. 25/05/2017 that he had interacted with the IEC holders. As per the Commissioner, the appellant has not brought to the knowledge of the Department that IEC holders have lent their IECs to other persons. There is no evidence on record brought by the Department to show that the appellant had knowledge regarding the lending of IEC. Further, the lending of IEC is not an offence under the Customs Act, 1962. Non-verification of antecedents of IEC holders - HELD THAT - As per Regulation, the Customs Broker is to verify the correctness of IEC number, identity of client and functioning of them at the declared address using reliable, independent, authentic documents data or information. Further physical inspection of the premises of the importer or exporter is not required under the law as well as under the Board s Circular No.9/2010-Cus dt. 08/04/2010. In the present case, the appellant had obtained copies of PAN card, Aadhaar Card, GST registration certificate, IEC certificate from all the three exporters concerned. Time limit prescribed under Regulation 17(7) of CBLR - HELD THAT - The Inquiry Report is dated 15/07/2019 and if we accept that the said report was submitted on the same date, even then, as per Registration 17(7) of CBLR 2018, the Commissioner is supposed to pass the order within 90 days but the Commissioner in this case has passed the order on 20/09/2019 which is beyond the time limit prescribed under Regulation 17(7) of the CBLR 2018 - the time limit prescribed under CBLR is mandatory and not directory. The impugned order is set aside on merits as well as on limitation - appeal allowed - decided in favor of appellant.

Summary

Issues:
Revocation of Customs Broker license under CBLR, 2018 and imposition of penalty.

Analysis:
The appeal challenged the revocation of the appellant's Customs Broker license and imposition of a penalty under Regulation 14 of the Customs Broker License Regulations, 2018 (CBLR, 2018). The Commissioner of Customs had revoked the license, forfeited the security deposit, and imposed a penalty of ?50,000 based on allegations of collusion with exporters to overvalue goods for excess duty drawback. The appellant operated in Mumbai and Nhava Sheva and faced prohibition orders for alleged non-compliance with CBLR 2013 obligations. The Inquiry Officer dropped some charges but sustained violations of Regulations 11(d) and 11(n) of CBLR 2013. The appellant argued that findings were factually incorrect and cited precedents to support their case.

The appellant contended that the impugned order failed to appreciate CBLR provisions and relevant judicial decisions. They argued against the Commissioner's findings, stating that interactions with IEC holders did occur, and lack of evidence regarding knowledge of IEC lending. The appellant also claimed compliance with KYC norms and criticized the delay in the process. The appellant cited judgments to support their stance on the time limit prescribed by CBLR 2018.

The respondent supported the impugned order's findings and defended the revocation of the license due to alleged violations of Regulations 11(d) and 11(n) of CBLR 2013. They highlighted the appellant's lack of cooperation with the Inquiry Officer and alleged awareness of IEC misuse without reporting it to the Department.

The Tribunal analyzed the allegations against the appellant under Regulations 11(d) and 11(n) of CBLR 2013. They found factual inaccuracies in the Commissioner's findings, noting interactions with IEC holders and lack of evidence on IEC lending knowledge. The Tribunal emphasized that physical verification of premises was not mandatory and cited precedents to support their decision. Regarding the time limit violation under Regulation 17(7) of CBLR 2018, the Tribunal held it to be mandatory and set aside the impugned order both on merits and limitation grounds, ultimately allowing the appellant's appeal.