2021 (6) TMI 780 - AT - Customs

Revocation of Customs Broker license - forfeiture of security deposit - levy of penalty - evasion of duty by undervaluation and misdeclaration of quantity - HELD THAT - Instead of rendering a finding on each of the four articles of charge, on the basis of evidence furnished and response of the customs broker, the enquiry authority has rendered a finding on a charge that was, apparently, not levelled against the appellant. The licensing authority, while sustaining the proposal in the show cause notice on the basis of the report of the enquiry officer, failed to take note of this aberration. That colourable exercise of jurisdiction, thereby, stands transferred to the impugned order. The license of the appellant having been revoked by the first of the impugned orders, the subsequent revocation, and forfeiture of security deposit, should, in normal circumstances, be held as infructuous. However, as the procedure laid down in law, under Customs Broker Licensing Regulations, 2018, have been departed from in the stages leading to the first order of revocation rendering the original revocation to be lacking in legality and propriety, it would be appropriate to set aside both the impugned orders and remand them to the original authority for deciding afresh after instituting a fresh enquiry, as prescribed under Customs Broker Licensing Regulations, 2018, for ascertaining the correctness, or otherwise, of each of the articles of charge appended to the two show cause notices. Appeal allowed by way of remand.

Summary

Issues:
Revocation of license under Customs Broker Licensing Regulations, 2018, forfeiture of security deposit, and imposition of penalties based on alleged evasion of duty through undervaluation and misdeclaration of quantity.

Analysis:

1. Revocation and Forfeiture of License:
The case involved two separate orders revoking the license of the appellant under Customs Broker Licensing Regulations, 2018, and forfeiting the security deposit while imposing penalties. The Commissioner of Customs (General), Mumbai, invoked regulations 14 and 18 of the said regulations for revocation, forfeiture, and penalty imposition. The investigations revealed alleged evasion of duty facilitated by an employee of the appellant, leading to the license revocation. The appellant argued lack of evidence of active participation and premature proceedings under the regulations before adjudication under the Customs Act, 1962.

2. Contentions of the Parties:
The appellant contended that revocation was unwarranted without active connivance of the employer, citing precedents. The Authorized Representative argued that the appellant's employee colluded in undervaluing imports, justifying the revocation and penalties. The findings of the inquiry authority were highlighted, emphasizing the breach of obligations by the appellant.

3. Enquiry and Findings:
The enquiry officer's report established charges against the appellant for non-compliance with various regulations under the Customs Broker Licensing Regulations, 2018. The officer held the appellant responsible for the employee's actions, leading to the license revocation. However, the officer's findings did not align with the charges leveled against the appellant, indicating a procedural flaw in the inquiry process.

4. Judgment and Remand:
The Tribunal noted discrepancies in the orders and procedural lapses in the inquiry process, leading to a lack of legality and propriety in the revocation. Consequently, the Tribunal allowed the appeals by remanding the case for a fresh enquiry to ascertain the correctness of the charges. The direction was given for timely completion of the inquiry and issuance of the order within specified periods.

In conclusion, the Tribunal set aside the impugned orders, emphasizing the need for a fair and proper inquiry process in compliance with the Customs Broker Licensing Regulations, 2018, before revoking a license and imposing penalties based on alleged duty evasion.