2022 (8) TMI 74 - AT - Customs

Revocation of Customs Broker Licence - forfeiture of security deposit - fake exports for the claim of drawback by a number of exporters - fake exports of various consignments to Bangladesh through Petrapol Land Customs Station - HELD THAT - There are no answers to the appellant s contention that Let Export orders were issued after due verification by the concerned officials and that export manifest was also generated, implying thereby that the goods in question had cross the border. But, in any case, other than mere allegations of no advice and no due diligence, as Revenue has not brought on record the role/roles played by the Appellant and that which amounted to connivance etc., since it is the settled position of law that allegations howsoever strong, cannot take the place of proof. The revocation of licence was definitely not called for and hence the impugned order is set aside in so far as it relates to the revocation of Customs Broker Licence. But, however, since the Appellant was also unable to satisfy us on the aspect of advising its client and exercising due diligence, we are of the opinion that it would meet the ends of justice if a penalty by way of deterrent is imposed, inasmuch as, instead of forfeiture of the full Security Deposit, Rs.25,000/- of the sum is ordered to be forfeited under the provisions of Regulation 14 of CBLR, 2018. Forfeiture of full Security Deposit as ordered is also set aside, but however, the same is restricted to a forfeiture to the extent of Rs.25,000/- - impugned order to the extent of revocation of Appellant s licence is set aside - appeal allowed.

Summary

Issues:
Revocation of Customs Broker Licence based on alleged involvement in fraudulent activities.

Analysis:
The Appellant challenged the revocation of their Customs Broker Licence by the Principal Commissioner of Customs (Airport & ACC), Kolkata. The Order-in-Original highlighted that the Appellant was involved in facilitating fake exports for the claim of drawback by exporters who did not furnish Bank Realization Certificates. The Revenue suspended the Customs Broker Licence under Regulation 16(1) of Customs Broker Licensing Regulation (CBLR), 2018, citing the Appellant's involvement in fraudulent activities. The Appellant requested relied upon documents, but the Revenue only provided a soft copy of the prohibition order. The Appellant argued that the responsibility for Bank Realization Certificates did not lie with them and that proper procedures were followed for export manifest generation.

The Principal Commissioner of Customs referred to an Inquiry Report and concluded that the Appellant violated Regulation 10(d) and 10(e) of CBLR, 2018, leading to the revocation of the Customs Broker Licence and forfeiture of the Security Deposit. However, the Appellate Tribunal found that the Commissioner did not provide a basis for concluding that the Appellant did not exercise due diligence. The Tribunal opined that the alleged violations did not warrant such severe punishment affecting the livelihood of the Customs Broker and its employees.

The Tribunal criticized the Inquiry Officer for shifting the burden of proof onto the Appellant and emphasized that the Revenue must substantiate its allegations with supporting documents. Despite the lack of evidence regarding the roles played by the Appellant and connivance, the Tribunal highlighted that strong allegations do not substitute for proof in legal proceedings. Consequently, the Tribunal set aside the revocation of the licence but imposed a penalty of Rs. 25,000 as a deterrent measure under Regulation 14 of CBLR, 2018, instead of full forfeiture of the Security Deposit.

In conclusion, the Tribunal allowed the appeal, overturning the revocation of the licence and restricting the forfeiture of the Security Deposit to Rs. 25,000. The decision aimed to balance justice by acknowledging the lack of evidence while imposing a penalty for the Appellant's failure to advise the client and exercise due diligence.