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2021 (6) TMI 919 - AT - CustomsRevocation of Customs Broker License - forfeiture of security deposit - levy of penalty - enhancement of the value of the said second hand vessel - failure to intimate the relation between Shri Anil Vohra, Chartered Engineer and the Customs Broker - contravention of Regulations 11(d), 11(e) and 11(f) of CBLR, 2013 - neutral party - Circular No. 25/2015-Cus dated 15.10.2015 - HELD THAT - It seems that the adjudicating authority in the impugned order merely carried away by the use of the expression neutral party mentioned in para 9 of the said Circular but not examined its contextual use by reading the circular as a whole. A plain reading of para 9 of the Circular dated 15.10.2015, makes it crystal clear that the procedure for computing the value of second hand machinery should reflect the commercial reality resulting into a fair value and needs to be arrived through uniform practice by all custom houses. To achieve such uniformity, it has been emphasized that inspection/ appraisement report should be from a qualified neutral party. Further reading it along with subsequent paras 10 and 11, it would be more clear that the certificate issued by the Chartered Engineer, shall in all circumstances whether given by Port of Loading or in India be accepted and no Customs house should insist that inspection/ appraisement report should be obtained from a particular Chartered Engineer. Keeping in mind the guidelines and applying the same to present case, it was found that Shri Anil Vohra is an empanelled Chartered Engineer by the customs authorities to determine the value of second hand imported machinery in the Mumbai Custom House. Neutral party - HELD THAT - The adjudicating authority confirmed the charges against the appellant-Customs Broker observing that since Chartered Engineer Shri Anil Vohra is also a consultant to one of their related company, therefore, not a neutral party to the transaction of import. The said interpretation is fallacious. The inspection/appraisement of the second hand machinery to ascertain its value by a neutral party definitely refers to a person, who is not connected with the importer or the seller of the imported goods, precisely with the transaction of the imported goods whose value he is asked to determine. It cannot be read to mean a person employed and remotely connected to the Customs Broker, who appoints the Chartered Engineer on behalf of the importer to assess the value, in absence of appraisal report at the load port, be said to be not a neutral person for the said job. There are no allegation in the notice nor any finding in this regard on the correctness of the value determined by the Chartered Engineer alleging bias on his part. Nor any second opinion/report obtained by the Revenue reflecting a higher or different value of the imported goods than determined by shri Anil Vohra. In these circumstances, in our view the observation of the learned Commissioner that charges under regulations 11(d), 11(e) and 11(f) of CBLR, 2013 stands proved against the appellant cannot be sustained. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Alleged violation of Regulations 11(d), 11(e), and 11(f) of the Customs Broker Licensing Regulations (CBLR), 2013. 2. Whether the appellant failed to disclose the relationship between the Chartered Engineer and the Customs Broker. 3. Validity of the adjudicating authority's decision to revoke the license, forfeit the security deposit, and impose a penalty. Issue-wise Detailed Analysis: 1. Alleged Violation of Regulations 11(d), 11(e), and 11(f) of CBLR, 2013: The core issue revolves around the alleged violations of the specific regulations by the appellant, a Customs Broker. The regulations in question pertain to the obligations of the Customs Broker to act with due diligence, ensure the correctness of information, and avoid any conflict of interest. The Commissioner of Customs (General), Mumbai, adjudicated that the appellant violated these regulations by failing to disclose the relationship between the Chartered Engineer, Shri Anil Vohra, and the Customs Broker. The Inquiry Officer, however, found no evidence supporting these allegations. 2. Disclosure of Relationship Between Chartered Engineer and Customs Broker: The appellant engaged Shri Anil Vohra, an empanelled Chartered Engineer, for the valuation of the imported used Tug "KNK Disha." The contention was that Shri Anil Vohra was also a consultant to another related company of the appellant, M/s Admiral Shipping Ltd., and this relationship was not disclosed to the customs authorities. The appellant argued that the Chartered Engineer was a neutral party and that his relationship with the related company did not affect his neutrality in the valuation process. The adjudicating authority disagreed, interpreting the non-disclosure as a violation of the regulations. 3. Validity of Adjudicating Authority's Decision: The adjudicating authority's decision was based on the premise that the appellant deliberately concealed the relationship, thereby violating the regulations. However, the Tribunal found that the interpretation of the term "neutral party" by the adjudicating authority was flawed. The Tribunal emphasized that neutrality refers to the Chartered Engineer's independence from the importer and the transaction, not necessarily from the Customs Broker. The Tribunal noted that there was no evidence of bias or incorrect valuation by the Chartered Engineer and that the valuation report was not challenged by the Department. Furthermore, the Tribunal highlighted that the Customs Circular No. 25/2015-Cus dated 15.10.2015, which provides guidelines for the valuation of second-hand machinery, supports the appellant's position that the Chartered Engineer's report should be accepted if he is empanelled by the Customs House. Conclusion: The Tribunal concluded that the charges of violating Regulations 11(d), 11(e), and 11(f) of CBLR, 2013, were not substantiated. The decision of the Commissioner to revoke the license, forfeit the security deposit, and impose a penalty was set aside. The appeal was allowed with consequential relief as per law. Final Order: The impugned order was set aside, and the appeal was allowed with consequential relief, if any, as per law.
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