2022 (1) TMI 24 - AT - Customs

Revocation of customs broker license - imposition of penalty - MFDD s are restricted as per DGFT Notification No.35 (RE-2012)/2009-2014 dated 28.02.2013 or ot - It was alleged that the appellant had failed to produce various Authorization letter appointing him as Customs Broker from each import enumerated in the offence notice - opportunity of hearing not provided - cross-examination not done - relied upon documents were not given to the appellant - failure to follow principles of natural justice - HELD THAT - The appellant had sought cross examination of witnesses of Inquiry Report but the same was not allowed. It was argued that the principles of natural justice has been violated in so far as the relied upon documents have not been given to the appellant moreover, despite repeated request of cross examination of witness, the same was not allowed - It was also argued that charges based on the offence note from Chennai Customs are misplaced as the said matter is sub-judice and is pending before the Tribunal at Chennai. Another ground raised by the appellant is failure of revenue to observe the time limit prescribed under Regulation 17 of the CBLR, 2018. The appellant has particularly relied on the alleged violation of Regulation 17(1), 17(5) 17(7) of CBLR, 2018. It is seen that there are decisions of Tribunal as well as High Courts which hold opposite view. There are decisions of Tribunal as well as High Courts which say that the time limit prescribed under Regulation 17 are mandatory in nature whereas, there are also decisions which hold that the time limit prescribed under Regulation 17 are directory in nature. As the relied upon documents were not given to the appellant and also the cross examination of witnesses was denied we hold that the impugned order has been passed violating principles of natural justice - the matter is remanded to the adjudicating authority for afresh adjudication after providing all relied upon documents as well as cross examination of witness that adjudicating authority wishes to rely upon - Appeal allowed by way of remand

Summary

Issues:
Revocation of customs broker license under Regulation 17 of CBLR, 2018 and imposition of penalty under Regulation 18.

Analysis:
The appellant, a customs broker, faced allegations of violating Customs Broker Regulations in importing old and used Multi-Function Digital Devices at Pipavav Port. The investigation revealed that dummy companies, M/s. Vardhman Overseas and M/s. Trade World, were used to fraudulently import restricted items. The appellant's involvement as a customs broker for these entities was scrutinized, leading to charges of violations under Regulations 10(a), 10(d), and 10(n) of CBLR, 2018.

1. Violation of Regulation 10(a):
The appellant failed to produce proper Authorization letters from importers, some of whom were found to be non-existent entities. The appellant's defense was deemed weak as the Authorization letters submitted were considered manufactured evidence. The Inquiry Officer confirmed the contravention, leading to the revocation of the customs broker license.

2. Violation of Regulation 10(d):
The appellant was charged with not advising importers to comply with Act provisions, specifically lacking guidance on obtaining DGFT authorization. The appellant's defense of advising importers but filing Bills of Entries quickly was not accepted. Incorrect classification in Bills of Entries further supported the violation charge.

3. Violation of Regulation 10(n):
The appellant was accused of not verifying GSTIN and IEC numbers properly. The investigation revealed the use of dummy firms for imports, indicating the appellant's involvement in assisting fake importers. Previous penalties imposed on the appellant in a similar case strengthened this charge.

The appellant raised concerns about the violation of natural justice principles due to the non-provision of relied-upon documents and denial of witness cross-examination. The lack of essential documents vitiated the proceedings, leading to the setting aside of the impugned order for fresh adjudication with proper document disclosure and witness cross-examination.

The judgment highlighted the importance of following natural justice principles, emphasizing the need for fair proceedings. The decision to remand the case for a new adjudication process ensures a just and thorough examination of the allegations against the appellant, maintaining the integrity of the legal process.