2021 (9) TMI 258 - AT - Customs

Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - submission of learned Counsel appearing for the Appellant is that if the Commissioner decides not to continue with the suspension order and in fact revokes the suspension order, then the procedure contemplated under regulation 17 cannot be resorted to revoke the license - HELD THAT - This submission advanced by learned Counsel for the Appellant cannot be accepted. Proceedings for revocation of license contemplated under regulations 14 and 17 are independent of the proceedings for suspension of the license under regulation 16. Merely because the Commissioner of Customs decides not to continue with the suspension order after hearing the Customs Broker, would not divest the Commissioner of Customs of his power to proceed under regulations 14 and 17 for revocation of the license. The power exercised by the Commissioner under regulation 16 (2) is summary in nature. An order under regulation 16(2) to either revoke the suspension or continue with it is passed after giving an opportunity of hearing to the Customs Broker. On the other hand, the procedure under regulation 17 contemplates a full fledged inquiry. A notice has to be issued to a Customs Brokers stating the grounds on which it is proposed to revoke the license or impose penalty and a Customs Broker has to submit a reply to the Deputy Commissioner of Customs nominated by the Commissioner to submit statement of defense and also to specify whether the Customs Broker desires to be heard in person - It is on a consideration of the report submitted by the Deputy Commissioner and the representation made by the Customs Broker that the Commissioner is required to pass an order either revoking the suspension of the license or revoking the license. In this view of the matter, the findings recorded under regulation 16(2) cannot in any manner have any bearing on the findings recorded under regulation 17. It needs to be noted that a finding has been recorded in the order dated June 11, 2021 that an attempt was made by the Appellant to export restricted items by mis-declaring the Customs Tariff Heading of the goods by M/s Balaji International through the Appellant as a Customs Broker and the Appellant failed to exercise due diligence at the time of filing the shipping bill. A finding has also recorded that both the exporter and the Customs Broker had stated at the time of personal hearing that goods were restricted at the time when the Shipping Bill was filed. Appeal dismissed.

Summary

Issues Involved:
1. Legality of proceeding under regulation 17 after revocation of suspension under regulation 16(2).
2. Distinction between suspension and revocation proceedings.
3. Findings of the Commissioner regarding the Appellant's conduct.

Issue-wise Detailed Analysis:

1. Legality of proceeding under regulation 17 after revocation of suspension under regulation 16(2):
The Appellant contended that once the suspension of the Customs Brokers License was revoked under regulation 16(2), the Commissioner could not proceed under regulation 17 for revocation of the license. The argument was that the Commissioner could only proceed under regulation 17 if he had decided to continue the suspension. However, this submission was rejected. The Tribunal clarified that proceedings for revocation of license under regulations 14 and 17 are independent of suspension proceedings under regulation 16. The Commissioner retains the power to initiate revocation proceedings irrespective of the suspension status. Regulation 16(2) only dictates that if the suspension is continued, the procedure under regulation 17 must follow, but it does not preclude the Commissioner from invoking regulation 17 separately.

2. Distinction between suspension and revocation proceedings:
The Tribunal highlighted the procedural differences between suspension under regulation 16 and revocation under regulation 17. Suspension under regulation 16 is a summary action taken when immediate action is necessary, and it involves a preliminary hearing. In contrast, revocation under regulation 17 involves a comprehensive inquiry process, including issuing a show cause notice, allowing for defense submission, conducting an inquiry with documentary and oral evidence, and permitting cross-examination. The findings from the summary suspension process do not influence the detailed inquiry required for revocation. This distinction ensures that the revocation process is thorough and fair, providing ample opportunity for the Customs Broker to present their case.

3. Findings of the Commissioner regarding the Appellant's conduct:
The Commissioner found that the Appellant attempted to export restricted items by mis-declaring the Customs Tariff Heading of the goods through M/s Balaji International. The Appellant failed to exercise due diligence in filing the shipping bill, a critical responsibility of a Customs Broker. Both the exporter and the Appellant admitted during the personal hearing that the goods were restricted at the time of filing the Shipping Bill. These findings were crucial in the decision to revoke the license, underscoring the Appellant's failure to comply with regulatory obligations and maintain the integrity required in customs transactions.

Conclusion:
The Tribunal upheld the Commissioner’s order dated June 11, 2021, revoking the Customs Brokers License of the Appellant, forfeiting the security deposit, and imposing a penalty of ?50,000/-. The appeal was dismissed, affirming that the Commissioner acted within the regulatory framework and that the Appellant's conduct warranted the revocation of the license. The decision reinforces the importance of due diligence and compliance in customs brokerage activities.