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2022 (7) TMI 1039 - AT - CustomsSeeking waiver of forfeiture of security as well as penalty imposed on CHA - time period for reporting the changes in Regulation 12 and 13 - case of appellant is that the registration with Ministry of Corporate Affairs was obtained on 01.09.2018 and the intimation to the Customs was given on 10.10.2018 - sufficient reasons for delay provided or not - compliance with Regulation 7 of the CBLR 2018 as well as Regulation 13 of CBLR 2013 or not - HELD THAT - Regulation 7 clearly lays down that the change of constitution of a Customs Broker needs to be communicated within 60 days from the date of such change for the grant of license under Regulation 7. In the instant case the change was made on 11.12.2014 but it was reported only on 10.10.2018 after a considerable delay. In view of above there is a clear violation of CBLR 2013 under which the appellant was licensed. As mere wrong mention of the relevant CBLR would not vitiate the order the appellant has violated the provisions. It is noticed that the appellant has claimed that the delay occurred largely due to the fact that one of his partner died and he was not in a right frame of mind. It is noticed that the impugned order has taking a lenient view not revoked the license of the appellant - Taking into account the circumstances and the facts of the case further lenient view is adopted. The case is not of a significant violation but only that of a delay in reporting. Moreover the appellant did not process any document during this period. The forfeiture of security deposit of Rs. 5 lakhs and imposition of penalty of Rs. 50, 000/- under Regulation 18 of CBLR 2018 is excessive - the order of forfeiture of security deposit of Rs. 5 lakhs is set aside but the penalty of Rs. 50, 000/- on the Customs Broker is sustained for this lapse - appeal allowed in part.
Issues:
- Forfeiture of security and imposition of penalty on M/s Star CHA Management Services LLP for violating Customs Broker Licensing Regulation, 2018. - Interpretation of the second proviso to Regulation 7(2) of CBLR 2018 regarding reporting changes in the constitution of a company or firm. - Examination of the provisions of CBLR, 2013 in comparison to CBLR, 2018 for reporting changes in the constitution of a Customs Broker. Analysis: 1. Forfeiture of Security and Imposition of Penalty: - M/s Star CHA Management Services LLP appealed against the forfeiture of security and penalty imposed for violating Customs Broker Licensing Regulation, 2018. - The appellant argued that the delay in reporting the change of LLP constitution was due to a partner's death and subsequent mental state issues, emphasizing that no business was conducted during the period. - The appellant contended that the penalty and forfeiture were excessive, seeking a full waiver based on the circumstances. 2. Interpretation of Second Proviso to Regulation 7(2) of CBLR 2018: - The second proviso to Regulation 7(2) of CBLR 2018 mandates the immediate communication of changes in directors or partners to Customs. - The Tribunal noted that this provision applies to companies or firms licensed under CBLR, 2018, not CBLR, 2013 under which the appellant was licensed. - It was established that the delay in reporting the LLP constitution change did not violate CBLR, 2018, as incorrectly invoked in the show cause notice. 3. Examination of CBLR, 2013 Provisions: - Regulation 13 of CBLR, 2013 requires reporting changes in the Customs Broker's constitution within 60 days for license renewal. - The Tribunal found a clear violation of CBLR, 2013 due to the delay in reporting the LLP constitution change. - Despite the violation, the Tribunal noted the lenient view taken in not revoking the license and considered the circumstances, leading to a partial allowance of the appeal. - The Tribunal set aside the security deposit forfeiture but upheld the penalty, recognizing the delay as the primary issue rather than a significant violation. In conclusion, the Tribunal partially allowed the appeal by M/s Star CHA Management Services LLP, emphasizing the importance of timely reporting changes in the Customs Broker's constitution while considering the circumstances surrounding the delay in this case.
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