2020 (11) TMI 591 - AT - Customs

Continuation of suspension of the CB licence - HELD THAT - Shri Babul Dey joined the Customs Broker firm in July 2018, but the Customs Broker did not get him duly approved by the Deputy Commissioner of Customs or Assistant Commissioner of Customs. It is alleged that M/s.M.K.Saha Company has violated the provision of Regulation 10(B) of CBLR, 2018. In the present case, the licence of CB was suspended under CB Order No.12/2019 dated 18.2.19. However, prior to the suspension, a Customs Broker Circular No.08/2019 dated 8.2.19 was issued in connection with the issue under consideration. The suspension was ordered by the Customs Authority on the basis of investigation report dated 31.1.19 issued by the Directorate of Revenue Intelligence, Kolkata Zonal Unit with respect to one export consignment of M/s. Skivvies Textile wherein apparently, scrap leathers of very low value were attempted to be exported as Vegtan Leather Shoe Sole Components . The DRI Authority had intercepted the same and during the course of investigation allegedly it is found that the CB had failed to fulfil their obligations under Regulation 10(b), 10(d), 10(e) and 10(n) of CBLR, 2018 by not verifying the correctness of export consignment and not collecting the authorisation and KYC from the exporter directly. In the present order, the Commissioner has not applied his mind on the aspect as to whether immediate action was necessary and thus, on this ground alone the order of continuation of suspension of the CB licence of the appellant fails. Moreover, apparently, the authorities have failed to complete the Regulation 17 proceeding within the time limit stipulated therein. The Hon ble High Court, Calcutta has also found that the inquiry proceeding was completed without supplying relied upon documents to the CB and hence, the said inquiry report has been set aside by the Hon ble High Court, Calcutta - On query, it is learnt that afresh inquiry proceeding is yet to be concluded by the newly appointed Inquiry Officer. In such scenario, the suspension of licence of appellant cannot be allowed to continue since the same has irreversible civil consequences on the appellant/ CB. There is no necessity to continue with the suspension of the CB licence any further. Justice may subserve and balance of convenience may be maintained by withdrawing suspension of the CB licence of the appellant and directing them to co-operate in the inquiry proceeding under Regulation 17 of CBLR, 2018. Hence, the proceeding of inquiry under Regulation 17 ibid shall continue in the case of the present appellant in accordance with law, but the authorities should not continue with the suspension of their licence - Appeal allowed in part.

Summary

Issues Involved:
1. Suspension of Customs Broker (CB) Licence.
2. Violation of Customs Brokers Licensing Regulations (CBLR), 2018.
3. Legality and necessity of immediate suspension.
4. Inquiry proceedings under Regulation 17 of CBLR, 2018.

Detailed Analysis:

1. Suspension of Customs Broker (CB) Licence:
The appellant's CB licence was suspended by the Commissioner of Customs (Airport & Administration), Customs House, Kolkata, under Regulation 16(2) of CBLR, 2018. The suspension was based on an investigation report by the Directorate of Revenue Intelligence (DRI) concerning an export consignment of M/s. Skivvies Textile. The DRI found that the CB had failed to fulfill obligations under Regulations 10(b), 10(d), 10(e), and 10(n) of CBLR, 2018. The Tribunal noted that the suspension order did not demonstrate the "immediate necessity" required under Regulation 16, thus failing to justify the suspension.

2. Violation of Customs Brokers Licensing Regulations (CBLR), 2018:
The CB was alleged to have violated Regulation 10(B) by not getting Shri Babul Dey approved by the Deputy Commissioner or Assistant Commissioner of Customs. The CB was also accused of not verifying the correctness of the export consignment and not collecting the authorization and KYC from the exporter directly, thus violating multiple provisions of Regulation 10. However, the Tribunal pointed out that the suspension was not warranted as the alleged violations did not necessitate immediate action.

3. Legality and Necessity of Immediate Suspension:
The Tribunal emphasized that the power of suspension under Regulation 16 should be exercised only in appropriate cases where immediate action is necessary. The Tribunal cited several judgments, including Rubee Air Freight Ltd. v/s CC (Airport & Administration), Kolkata, and N.C. Singha & Sons v/s. UOI, to underline that suspension should not be exercised routinely or mechanically. The Tribunal found that the Commissioner failed to provide reasons for the immediate necessity of suspension, thus rendering the suspension order unsustainable.

4. Inquiry Proceedings under Regulation 17 of CBLR, 2018:
The inquiry proceedings initiated under Regulation 17 were based on the impugned Order-in-Original dated 6.3.19. The Inquiry Report dated 19.7.19 was set aside by the Hon’ble High Court of Calcutta due to non-provision of relied-upon documents to the CB. The Tribunal noted that the authorities failed to complete the inquiry within the stipulated time and that a fresh inquiry was yet to be concluded. The Tribunal directed that the inquiry should continue but without the suspension of the CB licence, as the continued suspension had irreversible civil consequences on the appellant.

Conclusion:
The Tribunal modified the impugned Order-in-Original by setting aside the suspension of the CB licence while allowing the inquiry proceedings under Regulation 17 to continue. The Commissioner of Customs (Airport & Administration), Kolkata, was directed to issue an order allowing the operation of the CB licence immediately. The appeal was allowed partly, balancing justice and convenience.