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2021 (6) TMI 779 - AT - CustomsRevocation of Customs Broker License - forfeiture of security deposit - imposition of penalty - export of Pseudo Ephedrine concealed in the declared cargo, namely Chow Chow - violation of Regulations 11(a), 11(d) and 11(n) of CBLR, 2013 - HELD THAT - The employees of the appellant Customs Broker at the time of investigation of attempt to export illegally white crystalline powder suspected to be Pseudo Ephedrine by the ACIU, in their respective statements voluntarily disclosed that they had not obtained proper authorization from the exporter and the export documents were handed over by the elder brother of Shri M. Amrithalingam. The said statements were not retracted nor assailed by requesting cross-examination particularly when charge of contravention of Regulation 11(a) of non-receipt of authorization from the exporter was framed against the appellant. The authorities below have also observed that not only in connection with the present consignment but also in the past five export consignments the appellant had not obtained proper authorization from the exporter - much importance cannot be placed on the said authorization letter at this stage when the statements furnished remained unchallenged. In these circumstances, it is to be accepted that the appellant contravened the provisions of Regulation 11(a) of CBLR, 2013. Contravention of Regulation 11(d) - HELD THAT - The learned Commissioner reasoned that since the appellant could not produce the valid authorization for whom they were transacting the business or whom he has represented, the question of advising the said client to comply with the provisions of the CBLR, 2013 is out of question, therefore, the violation of Regulation 11(d) on the part of the Customs Broker has been established. Also, in support of the said finding, the learned Commissioner observed that the appellant had not only filed the shipping bill in question without obtaining authorization but also had filed five such shipping bills in the past of the said exporter without any authorization or verification of the antecedents of the exporter - as per Regulation 11(d), the Customs Broker is required to advise his client to comply with the provisions of the Customs Act, whereas in the present case, since Customs Broker has not interacted with the exporter advising him to comply with the provisions of Customs Act, 1962 does not arise. Consequently, the learned Commissioner has correctly concluded that there is violation of Regulation 11(d) of CBLR, 2013 also. Violation of Regulation 11(n) - HELD THAT - There are merit in the observation of the learned Commissioner as verification of antecedents, identity etc. be required to be done using the reliable independent authentic documents, data or information by the CB. Mere claim in this regard cannot suffice the requirement of production of authentic documents, data, information etc. in support of their claim of verification as required under the said Regulation particularly when the export documents were not directly handed over to the appellant and the same was received through a third party i.e. the elder brother of Shri M. Amrithalingam. Therefore, violation of Regulation 11(n) of the CBLR, 2013 as concluded by the learned Commissioner also does not call for interference. There are contravention of the Regulations by the appellant Customs Broker, but no evidence is brought on record establishing the involvement of or in the knowledge of the Appellant Custom Broker the attempt to export the crystalline white powder suspected to be Pseudo Ephedrine by the exporter concealing the same in the declared export cargo namely, Chow-Chow (vegetables). In these circumstances imposition of harsh penalty by revoking the license of the appellant is not warranted and hence deserves to be set aside. The impugned order is modified to the extent of setting aside the direction of revocation of license under Regulation 18 of the CBLR, 2013; the imposition of penalty and forfeiture of security deposit and imposition of penalty of ₹ 50,000/-as directed is upheld - Appeal allowed in part.
Issues Involved:
1. Violation of Regulation 11(a) of CBLR, 2013. 2. Violation of Regulation 11(d) of CBLR, 2013. 3. Violation of Regulation 11(n) of CBLR, 2013. 4. Justification for revocation of license, forfeiture of security deposit, and imposition of penalty. Detailed Analysis: Violation of Regulation 11(a) of CBLR, 2013: The appellant, a licensed customs broker, was accused of not obtaining necessary authorization from the exporter, M/s Pure Food Products, for an export consignment of fresh vegetables. During the investigation, it was found that the consignment contained 40.370 kgs of Pseudo Ephedrine. The appellant contended that the authorization letter was submitted during adjudication, but the authorities found that the authorization was not provided during the initial investigation. The statements of the appellant’s employees indicated that the export documents were handled by an unauthorized person. The Tribunal found that the appellant contravened Regulation 11(a) by failing to obtain proper authorization. Violation of Regulation 11(d) of CBLR, 2013: The appellant was also charged with failing to advise the client to comply with the provisions of the Customs Act. The Commissioner concluded that since the appellant did not interact with the exporter, they could not have advised them to comply with the regulations. The Tribunal upheld this finding, noting that the appellant had not obtained authorization for multiple consignments in the past, indicating a pattern of non-compliance. Violation of Regulation 11(n) of CBLR, 2013: The charge under Regulation 11(n) related to the appellant’s failure to verify the antecedents and identity of the exporter using reliable documents. The appellant claimed to have verified the exporter’s details, but the Commissioner found no corroborative evidence to support this claim. The Tribunal agreed with this finding, emphasizing the importance of producing authentic documents to substantiate the verification process. Justification for Revocation of License, Forfeiture of Security Deposit, and Imposition of Penalty: The Tribunal noted that while the appellant violated the specified regulations, there was no evidence of their involvement or knowledge of the attempted smuggling of Pseudo Ephedrine. The Tribunal referenced previous judgments indicating that harsh penalties, such as revocation of the license, are not justified without evidence of the customs broker’s involvement in defrauding the revenue. Consequently, the Tribunal set aside the revocation of the license but upheld the imposition of a penalty of ?50,000 and the forfeiture of the security deposit, considering the overall circumstances of the case. Conclusion: The appeal was partly allowed, with the revocation of the license set aside, but the penalty and forfeiture of the security deposit were upheld. The Tribunal emphasized the importance of compliance with CBLR regulations and noted that penalties should be proportionate to the evidence of involvement in fraudulent activities.
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