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2022 (12) TMI 490 - HC - CustomsRevocation of CB license - Mis-declaration of value of goods - the stand of the Respondent before the authorities below consistently had been that it had verified the credentials of the IEC holder from the website of the DGFT and that the KYC documents were accordingly scrutinized as per its obligations in terms of the CBLR, 2013 - Whether the CESTAT is right in law in allowing the appeal of the CB being the first breach irrespective of the contravention of provisions of Regulations of the Customs Brokers Licensing Regulations and gravity of the offence? HELD THAT - The doctrine of proportionality is a well recognized concept of judicial review which Courts invoke to test the punishments imposed which are disproportionate to the alleged misconduct. In RANJIT THAKUR VERSUS UNION OF INDIA AND ORS 1987 (10) TMI 374 - SUPREME COURT , the Apex Court, while testing the imposition of punishment on the principle of proportionality held that The doctrine of proportionality, as part of the concept of judicial review, would ensure that even on an aspect which is, otherwise, within the exclusive province of the Court- Martial, if the decision of the court even as to sentence is an outrageous defance of logic, then the sentence would not be immune from correction. Irrationality and perversity are recognised grounds of judicial review. Since the facts and issues involved in the that case are not different from the one which we are concerned with in the present case, there are no justification or reason to take a different view in this case than the one taken in the case of Unnati Shipping. Although the Respondent failed to discharge its obligation under CBLR, 2013, yet it cannot be denied that efforts were made by the said Respondent to discharge a part of its obligations under the said Regulations and, therefore, the Order with regard to revocation of the Broker Licence would be excessive in the facts and circumstances of the case - Appeal dismissed.
Issues:
1. Appeal under Section 138 of the Customs Act, 1962 against CESTAT's Order. 2. Compliance with Customs Broker Licensing Regulations. 3. Allegations of aiding in customs duty evasion and misdeclaration. 4. Adjudication by Customs authorities and penalties imposed. 5. CESTAT's decision on revocation of Customs Broker License. 6. Application of the doctrine of proportionality in judicial review. Analysis: 1. The appellant filed a Custom Appeal against the Order of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) under Section 138 of the Customs Act, 1962. The appeal questioned the CESTAT's decision to allow the appeal of the Customs Broker (CB) despite the breach of licensing regulations and gravity of the offense. 2. The respondent, a licensed Customs Broker, faced allegations of aiding in customs duty evasion and misdeclaration of goods imported by a beneficiary importer. The adjudicating authority found the respondent negligent in complying with Customs Broker Licensing Regulations, leading to revocation of the license, forfeiture of security deposit, and imposition of a penalty. 3. The CESTAT upheld the findings but set aside the revocation of the Customs Broker License, deeming it disproportionate. The respondent did not appeal this decision. The issue at hand was whether the CESTAT's decision on revocation based on proportionality was sustainable, considering the respondent's failure to follow KYC norms. 4. The doctrine of proportionality, a recognized concept in judicial review, was applied. Previous cases highlighted that punishments must be proportionate to the offense committed. The court emphasized that revocation of the license would be excessive given the respondent's efforts to fulfill obligations under the regulations, leading to the dismissal of the appeal. 5. The judgment drew parallels with a similar case involving Unnati Shipping Agency, where the Tribunal upheld the penalty and forfeiture but set aside the license revocation based on proportionality. The court's decision was guided by the principle that punishments should align with the offense and not be unduly harsh or disproportionate. 6. Ultimately, the court dismissed the appeal, stating that no substantial question of law arose in the case. The decision rested on the application of the doctrine of proportionality in assessing the revocation of the Customs Broker License, considering the respondent's partial compliance with regulatory obligations.
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