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2023 (1) TMI 353 - AT - CustomsRevocation of customs broker license - forfeiture of the whole amount of security deposit - imposition of penalty - imeline of Regulation 16 and 17 of Customs Broker License Regulations (CBLR), 2018 was mandatory to be followed or not - Whether once the order suspending the license of CHA/appellant was revoked, the proceedings of revocation of license under Regulation 17 of CBLR, 2018 could not be initiated? - violation of Regulation 10(a), 10(d) and 10(n) of CBLR, 2018. Whether the timeline of Regulation 16 and 17 of Customs Broker License Regulations (CBLR), 2018 was mandatory to be followed while revoking the license and the order of revocation of license of appellant, Customs Broker (CB) is barred by time as the same has not been followed? - HELD THAT - The time limit prescribed in Regulation 17(1) has to be understood in the context of the strict time schedule prescribed in various portions of the Regulations. Regulations 17(1) prescribes a time limit of 90 days from the date of receipt of offence report within which action is to be initiated i.e. for issuance of Show Cause Notice to Customs Broker who has to file his defense within 30 days of receipt of said Show Cause Notice. Reverting to the facts of the present case, we observe that DRI proceeded based on the information about certain undervalued imports and conducted search at various premises of different importers based in Mumbai and Hyderabad on 12.04.2017. The goods recovered during those search were seized on 22.06.2017. But the requisite show cause notice could not be issued within six months, the time prescribed by the statute for the purpose. However, a show cause notice praying time extension under Section 110(2) of Customs Act, 1962 was issued on 06.10.2017 and the time was extended vide Order-in-Original dated 11.10.2017. It is department s case that the show cause notice of 11.04.2018 / offence report was received in Delhi, the Commissionerate of competent jurisdiction, only on 25.02.2019 and as such the show cause notice dated 23.05.2019 is well within the period of 90 days. In view of entire above discussion and in view of Regulation 17(1) of CBLR, 2018 and that the timeline prescribed under Regulation 17 being mandatory in nature, it is held that the Commissioner of Customs who received the offence report dated 11.04.2018 on 25.02.2019 has issued the show cause notice to the CHA on 23.05.2019, while following strictly the timeline, well within 90 days of receiving the offence report - the show cause notice in question was within 90 days from the date when Delhi, Commissionerate received the intimation about alleged acts / omissions of Customs Broker / appellant and the period of 90 days has to reckon from the date of receipt of offence report by the Commissioner issuing show cause notice. The statute i.e. CBLR, 2018 is prescribing the time limit which is otherwise mandatory unless there is a gross abuse of process of law by the alleged defaulter and there is utmost bona fide and diligence on the part of the officers proceeding against the said alleged defaulter - the issue is decided in affirmative holding that the timeline of Regulations is mandatory to be followed and Commissioner (Customs), Delhi has duly followed the same. Thus impugned show cause notice dated 23.05.2019 issued against the appellant is well within time. Whether once the order suspending the license of CHA/appellant was revoked, the proceedings of revocation of license under Regulation 17 of CBLR, 2018 could not be initiated? - HELD THAT - The action under regulation 16 can be taken during the pendency of proceedings initiated under regulation 14 to revoke the license of the Customs Broker. It becomes abundantly clear that any order whether of continuation of suspension of CB s Lincese or of revocation thereof is not a bar for the inquiry as has already been initiated under Regulation 14 following the procedure prescribed under Regulation 17 of CBLR, 2018. Hence, the contention of appellant is not sustainable and we hold that irrespective of the order of revocation of suspension of appellants license the proceedings for revocation under Regulation 17 of CBLR, 2018 thereof have rightly been continued against him. Issue is decided in negative holding that the findings recorded under Regulation 16(2) of CBLR, 2018 cannot in any manner have any bearing on the findings recorded under Regulation 17. Whether the appellant has violated Regulation 10(a), 10(d) and 10(n) of CBLR, 2018? - HELD THAT - There is no evidence on record to prove that the appellant had any personal or pecuniary interest in the impugned imports or that the imports were for any other personal benefit of the appellant. From the above discussion about the documents and information of the importer, it is crystal clear that the CHA herein had played his role diligently. The only allegation otherwise about the imported goods is that of under valuation thereof. Appellant is not a valuation expert and had played no role in the under valuation of the goods. The appellant acted purely on the basis of documents as that of invoice/purchase orders supplied by the importers. The Commissioner has wrongly concluded that there is no evidence to rebut the veracity the statement of Shri Sidharth Sharma. It is rather observed that Shri Sidharth Sharma had submitted a letter dated 25.10.2017 on behalf of M/s. Maggie Marketing Pvt. Ltd. retracting his earlier statements but the order under challenge is miserably silent to the same. Mention of said retraction is even found recorded in subsequent statement of Shri Sidharth Sharma dated 08.11.2017, wherein, he acknowledged his retraction and reiterated that his earlier statements were given under pressure - the findings of adjudicating authority below are held to be based on presumptions and surmises only. Even the Show Cause Notice as served upon the appellant is based on third party evidence i.e. on the documents recovered from premises of Shri Yusuf Pardawala. The Commissioner (Appeals) has committed an error while ignoring the most cogent part of the statement of Shri Siddharth Sharma, wherein, he has specifically acknowledged that payments and charges for clearance etc. were paid to the appellant from the accounts of the concerned companies in whose names the Bills of Entry were filed. The another cogent deposition absolving entire liability of the appellant is that the clearance work of the import consignments of power bills and other related items in his company was handled by Shri Pankaj Singh alias Banti who did not work for M/s. ICS Cargo rather was the Director of a freight forwarding company in the name of M/s. JMD Clearing and Forwarding Pvt. Ltd. The said deposition has been corroborated by Shri Pankaj Singh himself - There was nothing with appellant to hide from the department. Mere taking certain documents of importer from a person appearing on behalf of the importer who is otherwise validly existing at the declared address and having valid IEC and GSTIN is highly insufficient to hold that CHA has failed in performing his duties of Customs House Agent deliberately. The third issue of adjudication in favour of the appellant holding that the Commissioner (Appeals) has wrongly confirmed the violation of Regulation 10(a), 10(d) and 10(n) of CBLR, 2018 against the appellant. Though the revocation of suspension of appellant s license was not an impediment while proceeding with the inquiry under Regulation 14 in terms of Regulation 17 of CBLR, 2018 and that the department has strictly followed the mandatory timeline of this provision - The appellant has not committed any alleged violation of Regulation 10(a), 10(d) and 10(n) of CBLR, 2018 - the order of revoking the license of appellant and of imposing penalty upon the appellant is absolutely wrong, unreasonable and unjustified. Appeal allowed.
Issues Involved:
1. Timeliness of the revocation proceedings under Regulations 16 and 17 of CBLR, 2018. 2. Impact of revocation of suspension on the initiation of revocation proceedings under Regulation 17 of CBLR, 2018. 3. Alleged violations of Regulations 10(a), 10(d), and 10(n) of CBLR, 2018 by the appellant. Issue-wise Detailed Analysis: 1. Timeliness of the Revocation Proceedings: The core issue was whether the revocation proceedings were barred by time under Regulations 16 and 17 of CBLR, 2018. The tribunal emphasized the mandatory nature of the timeline prescribed under Regulation 17, which requires the issuance of a show cause notice within 90 days from the date of receipt of an offence report. The tribunal noted that the regulation aims to ensure timely action against erring brokers to curb unlawful activities and protect the interests of both the customs broker and the department. The tribunal held that the show cause notice issued on 23.05.2019 was within the mandatory 90-day period from the receipt of the offence report by the Delhi Commissionerate on 25.02.2019. Thus, the proceedings were not barred by time. 2. Impact of Revocation of Suspension on Revocation Proceedings: The appellant contended that once the suspension of his license was revoked, the Commissioner could not proceed with revocation under Regulation 17. However, the tribunal clarified that actions under Regulations 16 and 17 are independent. Regulation 16 deals with immediate suspension in cases where urgent action is necessary, while Regulation 17 prescribes a detailed procedure for revocation of the license. The tribunal held that revocation of suspension under Regulation 16 does not preclude the initiation or continuation of revocation proceedings under Regulation 17. Therefore, the Commissioner was within his rights to proceed with the revocation of the license even after revoking the suspension. 3. Alleged Violations of Regulations 10(a), 10(d), and 10(n): The tribunal examined the allegations of violations of Regulations 10(a), 10(d), and 10(n) by the appellant. Violation of Regulation 10(a): Regulation 10(a) requires a customs broker to obtain authorization from the importer. The tribunal found that the appellant had valid authorizations from the importing firms and there was no denial from the importers regarding the authorization. The tribunal concluded that the appellant had complied with Regulation 10(a). Violation of Regulation 10(d): Regulation 10(d) mandates a customs broker to advise clients to comply with the law and report non-compliance to customs authorities. The tribunal observed that there was no evidence to prove that the appellant was aware of any manipulation of import invoices or misuse of IECs. The statements of key witnesses, including cross-examinations, did not support the allegations against the appellant. The tribunal held that the appellant had no reason to advise the importers or report any non-compliance, as there was no evidence of his knowledge of any wrongdoing. Thus, the violation of Regulation 10(d) was not established. Violation of Regulation 10(n): Regulation 10(n) requires verification of the IEC, GSTIN, and identity of the client. The tribunal found that the IECs and GSTINs of the importing firms were valid and there was no evidence of incorrect information. The tribunal held that the appellant had diligently verified the necessary details and there was no basis for the allegation of violation of Regulation 10(n). Conclusion: The tribunal concluded that the appellant had not violated Regulations 10(a), 10(d), and 10(n) of CBLR, 2018. The order of revoking the appellant's license and imposing a penalty was deemed unreasonable and unjustified. Consequently, the tribunal set aside the impugned order and allowed the appeal with all consequential benefits to the appellant.
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