2022 (5) TMI 764 - AT - Customs

Revocation of Customs Broker Licence of the Appellant - levy of penalty - Shortage in the cargo of silver bars - whether the appellant can be made responsible for any wrong deed happened behind their back? - Advance intimation to CONCOR - High value cargo not shifted to the designated warehouse immediately on arrival - seal verification - time limitation - HELD THAT - The documentary evidence abundantly establishes the fact that while handing over the container to transporter that is CONCOR in this case at port of import Nhava Sheva, for further transhipment to ICD, Khodiyar shipping line had clearly mentioned description of goods as silver bars on the face of all such documents i.e Both Gate Local Import General Manifest (IGM), Transhipment Permit and CONCOR s forwarding note and provided proper information to CONCOR about description of goods as Silver Bars in container no. CAIU 6840387 and subsequently CONCOR had prepared their own rail summary dated. 31.01.2019 for train no. BRTX22731 from Nhava Sheva to Vadodara which also clearly indicate description of goods as Silver Bars - in terms of provisions laid down in foregoing Customs notifications and circular, filing of Transhipment Permit, filing of both Gate Local IGM and Forwarding Note for handing over container to CONCOR for transhipment to ICD, Khodiyar was responsibility of Shipping Line. Thereafter, booking of container from Nhava Sheva for Transhipment to ICD, Khodiyar and for that preparation of Rail Summary till arrival of the container at ICD, Khodiyar was responsibility of CONCOR as transporter.It was not appellant s responsibility and appellant as a Customs Broker had no role to play in terms of Customs Act and CBLR 2018 and he was not authorized to do so by Customs authorities - the CONCOR circulars did not mandate each addressee to inform CONCOR separately. It appears that while deciding the matter Commissioner of Customs has not taken into consideration aforesaid provisions under Customs notification and circulars for transhipment of goods/container wherein specific responsibilities were cast on Shipping Line as declarant and CONCOR both as transporter and custodian and accordingly documentary evidence available on record as well as statement of CONCOR s Chief Manager at ICD, Khodiyar. It is also found that Commissioner has not produced any substantial evidence to his findings - Considering the provisions of Customs notification and circulars and the documentary evidence on record, CONCOR as a transporter as well as custodian were well aware that they were carrying Silver Bars in container no. CAIU 6840387, therefore in the present case intimation by any party including Customs Broker whom CONCOR circular was addressed have no relevance - thus, the appellant being Customs Broker cannot be held responsible in any manner under Regulation 10 (d) of CBLR 2018. It is evident that CONCOR who was sole responsible in terms of Regulation 6 (1) (d) (h) of Handling of Cargo in Customs Area Regulation, 2009 to verify Transhipment documents i.e IGM, Transhipment Permit as well as their own Rail Summary from Nhava Sheva to Vadodara before allowing unloading of container no. CAIU 6840387 from the train and place the container at demarcated area according to the nature of the goods, whereas in present case CONCOR had left the said container dormant at the first location I/9/34/A from 02.02.2019 to 04.02.2019 knowing the fact that both IGM and Transhipment Permit as well as Rail Summary from Nhava Sheva to Vadodara categorically indicated goods as Silver Bars and therefore container should have been placed by CONCOR as a custodian immediately after its unloading from train to its demarcated place which they did not - conjoint reading of aforesaid provisions, deposition of Chief Manager, CONCOR and Deputy Manager, CONCOR, ICD-Khodiyar as well as offence report of Deputy Commissioner of Customs and CONCOR s public tariff it is clear without any doubt that it was sole responsibility of CONCOR as a custodian at ICD, Khodiyar to unload the container from train and further placement of that container at demarcated area according to the nature of goods. It was not appellant s responsibility and appellant as a Customs Broker had no role to play in terms of Handling of Cargo in Customs Area Regulations, 2009 and CBLR 2018. Appellant was not authorized to do so by Customs authorities - the appellant being Customs Broker cannot be held responsible in any manner under Regulation 10 (m) of CBLR 2018 with regard to placement of container at its demarcated place in ICD. Violation of Regulation 10 (e) of the CBLR, 2018 - charge is that appellant had not verified seal on container - HELD THAT - It appears from the CONCOR s weighment receipt no. 1155 and findings of inquiry report and offence report of Deputy Commissioner of Customs, ICD, Khodiyar reproduced in forgoing para that while moving container from location I/9/34/A to the notified area placed in ICD, CONCOR s officials were well aware about discrepancy in seal number and weight of container was less than it was mentioned in their own rail summery which they did not disclose to customs authority - it is found from the police investigation report that, when container arrived at ICD at that time not only the weight was less than what was mentioned in the documents but seal number was also different. Further they concluded that theft had not taken place at ICD, Khodiyar which is in the limits of Adalaj Police Station and further CONCOR had also conducted investigation and reported that the theft had not happened in the ICD, Khodiyar premises. Thus, it was negligence on part of CONCOR and its appointed agency that they did not verify seal on container no. CAIU 6840387 and weight of the container was recorded less than it was mentioned in their own documents when it arrived at ICD, Khodiyar and further while moving the container from its first location they came to know about discrepancy in seal number and weight which they did not inform customs authority nor to the appellant - The responsibility for verification of seal number and gross weight was also cast on Shipping Line. There are no merit in learned Commissioner s finding that appellant s representative had not verified the seal before it was cut. Since appellant s responsibility as customs broker was ceased once the bill of entry was given out of charge, then presence of his representative at the time of cutting the seal and its verification have no relevance nor his admission that he has not verified seal has any relevance. Merely presence of his representative after completion of his work responsibly cannot hold appellant responsible for such harsh action of revocation of licence. It appears that while deciding the matter Commissioner of Customs has not taken into consideration such crucial facts which were on record. Time Limitation - HELD THAT - The appellant has made out a strong prima facie case on limitation too. Since on the basis of detailed finding the issue is decided on merit and facts of this case, a final finding on Limitation is not required. Legality of revocation of License - HELD THAT - Revocation of license should be commensurate with the gravity of the offence. Since the revocation of Customs Broker License is an extreme step and a harsh punishment as well as denial of livelihood of not only for Customs Broker but for his employees and their families too those who are dependent on customs broker. Adjudicating authority should take such harsh action only in the rarest of the rare case. It is observed that this case is not of misdeclaration of goods, undervaluation of goods, wrong classification of goods, evasion of duty, violation of Customs Act or appellant no way acted with mala fide intention. Penalty - HELD THAT - The integrity of appellant cannot be doubted. From the order of the Commissioner we find that the submissions made by the appellant, responsibilities cast on declarant, transporter and custodian by virtue of various Regulations, circulars, public notices and facilitation note discussed in forgoing paras were not duly considered and the harshest penalty of revocation of license was imposed on appellant. Such harsh punishment of revocation of license is unwarranted which is bad in eye of the law and cannot sustain. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Advance intimation to CONCOR
2. High value cargo not shifted to the designated warehouse immediately on arrival
3. Seal verification
4. Limitation

Detailed Analysis:

Advance Intimation to CONCOR:
The appellant argued that the responsibility for informing CONCOR about the arrival of high-value cargo was not theirs but that of the shipping line and CONCOR, who were aware of the cargo's nature from the gateway port itself. The appellant emphasized that their role as a Customs Broker began only after the cargo's arrival and that there were no specific customs instructions requiring them to inform CONCOR. The tribunal found that the shipping line had indeed informed CONCOR about the silver bars, and CONCOR, as both transporter and custodian, was aware of the cargo's nature. The tribunal concluded that the appellant could not be held responsible under Regulation 10(d) of the CBLR, 2018.

High Value Cargo Not Shifted to the Designated Warehouse Immediately on Arrival:
The appellant contended that it was CONCOR's responsibility as the custodian to ensure the high-value cargo was shifted to the designated area immediately upon arrival. The tribunal noted that CONCOR, as the custodian, failed to move the container to the designated area promptly and left it dormant for two days. The tribunal found no fault with the appellant under Regulation 10(m) of the CBLR, 2018, as the responsibility lay with CONCOR.

Seal Verification:
The appellant argued that the responsibility for verifying the seal on the container was with the custodian and the shipping line, as per Customs Public Notice No. 36/2009 and Trade Facility Note No. 02/2012. The tribunal found that CONCOR and its appointed surveyor failed to verify the seal and weight of the container, which was less than recorded in their own documents. The tribunal concluded that the appellant could not be held responsible under Regulation 10(e) of the CBLR, 2018, as their role ceased once the bill of entry was cleared by customs without examination.

Limitation:
The appellant argued that the entire proceeding was time-barred under Regulations 17(5), 17(6), and 17(7) of the CBLR, 2018. Although the tribunal found a strong prima facie case on limitation, they decided the matter on merits and facts without giving a final finding on limitation.

Conclusion:
The tribunal emphasized that revocation of a Customs Broker License is an extreme and harsh punishment that should be reserved for the most serious offenses. They found that the appellant had acted in good faith, had no mala fide intention, and had even informed the authorities about the incident. The tribunal concluded that the revocation of the license was unwarranted and set aside the impugned order, allowing the appeal.