2023 (3) TMI 808 - HC - Customs

Revocation of Customs Broker License - whether the Principal Commissioner of Customs was justified in revoking the Customs Brokers License granted in favour of the respondent? HELD THAT - The Tribunal took note of the facts of the case and noted that let export orders were issued by the Customs Department after due verification by the concerned officials and the export manifest was also generated thereby implying that the goods in question has crossed the border. The Tribunal noted that in such factual scenario, the mere allegation that the respondent has not advised the exporter in an appropriate manner and he did not exercise due diligence was not established by the revenue by bringing on record the role played by the respondent in the alleged fake exports. It appears to be not in dispute that the respondent was not a co-noticee against any action initiated under the Customs Act along with the exporters and the allegation against the respondent is that they alleged to have violated regulation 10(d) and 10(e) of the Act. The Tribunal after noting the facts of the case slightly modified the order of penalty by ordering forfeiture of only Rs.25,000/- from and out of the security deposit furnished by the respondent. The Tribunal has examined the facts of the matter and exercised discretion and interfered with the order of revocation of license - there is no question of law, much less substantial question of law arising for consideration in this appeal. Appeal dismissed.

Summary

Issues involved:
The appeal filed by the revenue under Section 130 of the Customs Act against the order revoking the license granted to the respondent under the Customs Broker Licensing Regulation 2018.

a) Contrary to legislation and intent of regulation:
The primary issue raised was whether the impugned order was contrary to the legislation and the spirit of the Customs Broker Licensing Regulation.

b) Compliance with Regulation 10(d):
The question arose whether the respondent failed to comply with Regulation 10(d) of the Customs Broker Licensing Regulation 2018, which requires a customs broker to advise clients to comply with the provisions of the Act and bring noncompliance to the notice of Customs officials.

c) Violation of Regulation 10(d):
It was debated whether the respondent breached Regulation 10(d) by not advising the client to comply with Act provisions and failing to report noncompliance to Customs officials.

d) Compensation for offence:
The issue of whether an offence can be compensated by paying an amount, and if leniency or proving bonafide by making payment is acceptable under the statute, was raised.

e) Interpretation of Regulation 17:
The intention behind incorporating Regulation 17 of the Customs Broker Licensing Regulation 2018 was questioned, specifically regarding the powers of the Commissioner to revoke or suspend a license within a specified timeframe after an inquiry.

The Court deliberated on whether the Principal Commissioner of Customs was justified in revoking the Customs Brokers License granted to the respondent. The Customs Department's investigation led to a prohibition order against the respondent, followed by a show-cause notice alleging violations of regulations 10(d) and 10(e) of the CBLR 2018. Despite the respondent's explanation, the license was revoked. The Tribunal, upon appeal, observed that the Customs Department had verified export orders and generated export manifests, indicating the goods had crossed the border. The Tribunal found the revenue failed to establish the respondent's lack of due diligence or inappropriate advice to exporters. Notably, the respondent was not a co-noticee in any Customs Act action with exporters. The Tribunal modified the penalty, ordering a forfeiture of Rs.25,000 from the respondent's security deposit. Ultimately, the Tribunal exercised discretion based on the case facts, leading to the dismissal of the appeal due to the absence of any substantial legal question.