2022 (11) TMI 870 - AT - Customs

Condonation of delay in filing appeal - substantial delay between the issuance of charge-sheet under the extant Regulations and the culmination in revocation - Suspension of Customs Broker License - forfeiture of security deposit - Misdeclaration of imported goods - MPEG cards or mounted PCB for set top box - HELD THAT - The licence of the appellant had been suspended and then revoked with an interlude of operability. It is also on record that the adjudication proceedings did not find it appropriate to penalize the appellant herein. It is noted that there is no evidence on record that the alleged non-compliance, as enumerated, was either at the initiative of the appellant or could have been forestalled by awareness of the alleged misdeclaration. Even the Directorate of Revenue Intelligence (DRI) was able to deduce a conspiracy only in 2008; it is moot if blood, or marital relationship, suffices to infer the cognizance of the appellant about intent to misdeclare the contents of the consignment. There has been substantial delay between the issuance of charge-sheet under the extant Regulations and the culmination in revocation. There is no justification offered for the delay; nor do we find from the records that the appellant, by acts of omission and commission, had contributed to the delay. On the other hand, it appears that the first inquiry authority had failed to take up the task assigned to him till his retirement and licencing authority did permit that state of affairs to continue without monitorial oversight - Casual disregard of timelines is not to be encouraged as it would only lead to stealthy dilution of timelines that the Central Board of Indirect Taxes and Customs (CBIC) has considered appropriate to bind authorities subordinate to it with. It is also incorrect on the part of Learned Authorized Representative to contend that pending proceedings was no detriment as far as appellant is concerned. Not only is it demonstrative of breach of public duty but also prolongs sysiphean agony that bordering on sadism - Appeal allowed.

Issues Involved:
1. Alleged misdeclaration of imported goods.
2. Compliance with Customs House Agents Licencing Regulations (CHALR), 2004.
3. Legitimacy of the inquiry process and findings.
4. Admissibility and reliance on statements under Section 108 of the Customs Act.
5. Timeliness and procedural adherence in revocation proceedings.

Detailed Analysis:

1. Alleged Misdeclaration of Imported Goods:
The appellant, a customs broker, was implicated in the misdeclaration of 'MPEG cards or mounted PCB for set-top box' as 'PCB cards for VCD players' by three clients. The investigation spanned from 2002 to 2004, with statements recorded in 2004 and 2005. The appellant's operations were suspended in 2008, reinstated in 2009, and eventually culminated in the revocation of the licence in 2019. The misdeclaration allegedly resulted in evasion of Rs. 5,46,75,693 in customs duties.

2. Compliance with Customs House Agents Licencing Regulations (CHALR), 2004:
Three charges were framed against the appellant for breaches of regulation 13(d), 13(k), and 19(8) of CHALR, 2004 (corresponding to regulation 10(d), 10(k), and 13(12) of CBLR, 2018). These charges included failure to advise clients to comply with the statute, failure to maintain records as specified, and failure to supervise employees' conduct. The licencing authority found the charges proved and revoked the licence.

3. Legitimacy of the Inquiry Process and Findings:
The inquiry process, initiated in 2009, remained inconclusive until 2018, with the final report submitted in 2019. The appellant argued that the findings were based on inculpatory statements and that the adjudication proceedings had concluded without adverse findings against them. The tribunal noted that there was no evidence of non-compliance initiated by the appellant or that they could have been aware of the misdeclaration. The Directorate of Revenue Intelligence (DRI) deduced a conspiracy only in 2008, and the familial relationships did not suffice to infer the appellant's cognizance of the misdeclaration.

4. Admissibility and Reliance on Statements under Section 108 of the Customs Act:
The licencing authority relied on the decision in Jaspreet Singh Marwaha v. Union of India, which allowed statements under Section 108 of the Customs Act to be admitted as evidence. However, the tribunal found that the reliance on these statements, to the exclusion of corroborative evidence, was inappropriate. The tribunal emphasized that statements recorded without the preliminaries enshrined in Section 164 of the Criminal Procedure Code should not be the sole basis for revocation without sufficient corroborative evidence.

5. Timeliness and Procedural Adherence in Revocation Proceedings:
There was a substantial delay between the issuance of the charge-sheet and the revocation of the licence. The tribunal noted that the delay was not justified, and the first inquiry authority failed to take up the task until retirement. The tribunal referred to the Principal Commissioner of Customs (General) v. Unison Clearing P Ltd, where the timelines were held to be directory but emphasized that delays must be justified with reasons. The tribunal criticized the casual disregard of timelines and highlighted the need for accountability in adhering to procedural timelines.

Conclusion:
The tribunal set aside the impugned order, allowing the appeal. It emphasized the need for sufficient corroborative evidence beyond statements under Section 108 of the Customs Act and criticized the unjustified delay in the inquiry process. The tribunal underscored the importance of adhering to procedural timelines to ensure fairness and accountability in revocation proceedings.

(Order pronounced in the open court on 17/11/2022)

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