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2023 (5) TMI 905 - AT - CustomsRevocation of Customs Broker License - forfeiture of security deposit - levy of penalty - it is submitted that Commissioner has conveniently ignored the facts stated in the show cause notice to the effect that the appellants have undertaken work only after obtaining Know Your Customer (KYC) documents provided by M/s SPG Global Logistics - HELD THAT - It is apparent that the entire proceedings were initiated on the basis of a complaint dated 02.11.2022, filed by Shri Mohinder Kumar Kakkar, Proprietor of M/s Soshine International. The appellants claim that they have received the authorization and Know Your Customer (KYC) documents from Shri Gautham Kumar Singh of M/s SPG Global Logistics, the clearing forwarding agents. Shri Gautham Kumar Singh in his statement dated 05.04.2011, accepted that they have earlier cleared consignments through the appellants; he received the Know Your Customer (KYC) documents of M/s Soshine International through Shri Mukesh Kathpal and have handed over to the same to the appellants. Shri Mukesh Kathpal, in his statement dated 05.04.2021, stated that he has imported 5 consignments in the name of M/s Soshine International; he knows Shri Mukesh Kakkar for 4-5 years; he handed over the Know Your Customer (KYC) documents of Soshine International to Shri Gautham Kumar Singh of M/s SPG Global Logistics. The story of Shri Mohinder Kumar is not acceptable for the reason that he accepts that he handed over the documents to Shri Mukesh. He did not deny knowing shri Mukesh. After about a year he lodges a complaint that someone used his company s name and Know Your Customer (KYC) for imports. We find as held by Inquiry Officer that financial dispute or any other reason could be the cause of the complaint. Moreover, when the bills of entry have been filed by the appellant, in the name of M/s Soshine International, department did not either notice or object that there was no proper authorization by the importer; no case was made out against the consignments in question regarding under valuation, misdeclaration etc. It is not the case of the department that the documents are forged or fraudulently obtained. These factors themselves would mitigate the omission on the part of the appellants in not obtaining the authorization from the importer himself. There are no loss or injury as occurred by such act. It is found that, as held by the enquiry officer, authorization need not be necessarily from the importer himself; it can be through any person. CESTAT in the case of DAKOR CLEARING SHIPPING P. LTD. VERSUS COMMR. OF CUS. (GENERAL) , MUMBAI 2016 (1) TMI 625 - CESTAT MUMBAI held that there is no restriction on the CHA to accept the authorization of a client through the trusted intermediary. Thus there were no serious consequences of violation of provisions of Regulation 10 (a) of Regulation 17 Customs Broker Licensing Regulation, 2018. Moreover, the documents are said to have been supplied by the clearing and forwarding agency M/s SPG Global Logistics. From the records of the case, there is no whisper as to whether the clearing and forwarding agency obtained any authorization from the importer and if not so whether they were also proceeded against. Therefore, the authorization referred to in Regulation 10 (a) of CBLR, 2018 need not be necessarily from the importer. However, it cannot be any person who is not connected with the importer from the facts of the case. It is reasonable established that Shri Mukesh who is believed to have passed on the documents to M/s SPG Global Logistics clearing and forwarding agent who have in turn passed on the documents to the appellant customs broker - thus, the appellants have no reasons to doubt the genuineness of the importer or the documents - violation of Rule 10 (a) of CBLR, 2018, if any, is only procedural one, looking in to the fact that no offence case, such as undervaluation, misdeclaration etc under Customs Act, 1962, was made out against the consignments in question and it is not also alleged that the Know Your Customer (KYC) documents are forged or fraudulently obtained. Learned authorized representative relies upon WELCOME AIR EXPRESS PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS (AIRPORT ADMINISTRATION) 2022 (5) TMI 211 - CALCUTTA HIGH COURT , however, the facts of the case are not comparable. In that case Hon ble High Court held that revocation of license of the customs broker is valid for non-verification of antecedents of the exporter. In the instant case the antecedents of the importer are not in question. Though there is some procedural infirmity committed by the appellant customs broker and there is no serious violation of Regulation 10 (a) of CBLR, 2018 in spirit; but no case is made out by the Revenue for revocation of license in terms of Regulation 17 of CBLR, 2018 - imposition of a token penalty would suffice, in the facts and circumstances of the case. The revocation of customs broker license of the appellant and forfeiture of security deposit set aside - penalty imposed to Rs. 5,000/- reduced - appeal allowed in part.
Issues:
The judgment involves issues related to the revocation of a customs broker's license, forfeiture of security deposit, and imposition of a penalty based on a complaint filed by a proprietor, alleged violation of Customs Broker Licensing Regulation, and the proportionality of the punishment imposed. Revocation of License and Imposition of Penalty: The appeal challenged the revocation of the appellant customs broker's license, forfeiture of the security deposit, and imposition of a penalty of Rs 50,000 by the Commissioner of Customs (Airport), New Delhi. The appellant argued that the Commissioner did not consider the enquiry report which exonerated them and that the punishment imposed was disproportionate. The appellant cited precedents where authorization could be obtained from a trusted intermediary and argued that no serious consequences arose from the alleged violation of Regulation 10(a) of the Customs Broker Licensing Regulation, 2018. Complaint and Inquiry Report: The proceedings were initiated based on a complaint by the proprietor of M/s Soshine International. The appellant claimed to have received authorization and KYC documents from a clearing forwarding agent, and the inquiry report indicated an association between the complainant and another individual. The judgment found that the complaint was not acceptable as the complainant had handed over the documents and no loss or injury occurred due to the appellant's actions. It was noted that the documents were supplied by the clearing and forwarding agency, and there was no requirement for authorization directly from the importer. Procedural Infirmity and Punishment: While acknowledging a procedural infirmity by the appellant, the judgment concluded that there was no serious violation of the regulations and that the punishment of license revocation was harsh. The judgment set aside the revocation of the customs broker license, reduced the penalty to Rs. 5,000, and deemed a token penalty sufficient considering the circumstances of the case. Conclusion: The judgment partially allowed the appeal by setting aside the revocation of the customs broker license and forfeiture of the security deposit, while reducing the penalty imposed. The decision emphasized the need for proportionate punishment and highlighted that no serious violation warranted the severe actions taken by the authorities.
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