2021 (10) TMI 718 - AT - Customs

Revocation of Customs Broker License - Forfeiture of security deposit - levy of penalty - mis-declaration on part of the Exporter - enquiry report was submitted holding that charges were Not Proved - disagreement memo issued, alleging that the Enquiry officer has not properly appreciated the statements and gave report based on assumptions and presumptions - violation of Regulation 10(d) of CBLR, 2018 - HELD THAT - While the investigation conducted may or may not lead to the confirmation of the offenses by the exporter (which is any way beyond the purview of the present appeal), it would not be a conclusive evidence to establish gross negligence or misconduct on the part of the appellants. No documents whatsoever have been produced by the Adjudicating Authority or the respondents to substantiate the allegation that the appellants were in the knowledge of actual port of discharge. Under the circumstances, negligence or lack of due diligence is not established. It can also be seen that in the instant case the timeline prescribed in the Regulations have not been adhered by the enquiry officer and the adjudicating authority notwithstanding the discussion as to whether the timelines prescribed in the said regulation are mandatory or advisory. In the instant case, the alleged offence took place in 2015 and the custom broker licence was suspended in 2019 after a period of four years. Normally, a punitive action like suspension is to be taken immediately, if the same is taken after four years, the sanctity of the same is vitiated - the custom broker has already suffered a lot. The livelihood of the custom broker and the employees dependent upon is at stake. Even if one concludes only on the basis of contradictory statement of the director of exporter, that the custom broker had initial knowledge of the actual port of discharge to be different from the port of discharge declared in the shipping bills, the punishment suffered by him for two years is enough to mitigate his violation or contravention of Regulation 11D of CBLR 2013 (now Regulation 10D of 2018). This Tribunal was consistently holding though the custom broker is cast upon the responsibility, the mitigation of the same would lie in imposition of penalty and forfeiture of the security deposit and revocation of licence which is agreeably a very harsh punishment, which is not warranted in such circumstances. Therefore, the interest of justice will be met if the revocation of custom broker licence is set aside while upholding the order inasmuch as forfeiture of security deposit and imposition of penalty are concerned. Appeal allowed in part.

Issues Involved:
1. Suspension and revocation of Customs Broker license.
2. Alleged violation of Regulation 10(d) of CBLR, 2018.
3. Rejection of cross-examination requests.
4. Timeliness of the inquiry and adjudication process.
5. Evidence of knowledge of actual port of discharge.
6. Severity and appropriateness of the penalty imposed.

Detailed Analysis:

1. Suspension and Revocation of Customs Broker License:
The appellants, M/s V. Arjun, had their Customs Broker license suspended on 27.08.2019, which was later withdrawn on 26.09.2019. An inquiry was initiated for alleged violations under Regulation 10(d) of CBLR, 2018, and the license was eventually revoked, with a penalty of ?50,000 imposed.

2. Alleged Violation of Regulation 10(d) of CBLR, 2018:
The appellants were accused of failing to advise their client to comply with the provisions of the Act and not bringing the matter to the notice of the Customs authorities. The department claimed that the appellants were aware that the consignments destined for Iran were offloaded in Dubai, which constituted a misdeclaration. However, the inquiry officer initially found the charges "Not Proved."

3. Rejection of Cross-Examination Requests:
The appellants argued that their request for cross-examination of witnesses, whose statements were relied upon in the Show Cause Notice, was unjustly rejected by the adjudicating authority. They contended that there was no specific evidence showing that the Customs Broker failed to advise their clients or acted negligently.

4. Timeliness of the Inquiry and Adjudication Process:
The appellants pointed out that the inquiry report was submitted four months after initiation, violating Regulation 17(5) of CBLR, 2018, and the Order-in-Original (OIO) was issued six months later, violating Regulation 17(7). The tribunal noted that the suspension was ordered and inquiry initiated four years after the filing of the shipping bills, which undermined the immediacy required for such punitive actions.

5. Evidence of Knowledge of Actual Port of Discharge:
The department's case relied heavily on the statements of the exporter and the appellants' employees, which were contradictory and made years apart. The tribunal found no conclusive evidence that the appellants were aware of the actual port of discharge. The inquiry officer's findings were based on assumptions rather than concrete evidence.

6. Severity and Appropriateness of the Penalty Imposed:
The tribunal considered the prolonged suspension and the impact on the appellants' livelihood and employees. It concluded that the penalty and forfeiture of the security deposit were sufficient punitive measures and that revocation of the license was excessively harsh. The tribunal cited consistent precedents where revocation was deemed unnecessary under similar circumstances.

Conclusion:
The appeal was partly allowed, setting aside the revocation of the Customs Broker license while upholding the forfeiture of the security deposit and imposition of the penalty. The tribunal emphasized the lack of timely action and substantial evidence against the appellants, and the undue harshness of the license revocation.

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