2023 (6) TMI 160 - AT - Customs

Revocation of customs broker licence - forfeiture of security deposit - levy of penalty - overvaluation of Export goods - breach of regulation 10(d), 10(e), 10(m) and 10(n) of CBLR - HELD THAT - The facts ascertained during the examination, or unearthed in the subsequent investigations, and emplaced, at times, in the notice commonly to evince breach of several of the enumerations of proper conduct in regulation 10 of Customs Brokers Licensing Regulations, 2018 are incorrect declaration of weight, value and description, resort to common heading of ITC (HS) classification and lack of conformity of heading incorporated in shipping bills with that in invoices of the supplier of the goods. In addition, reliance has been placed on the admission of the Director of the appellant-company that they did not interact directly with the client. It would not be out of place to take note that the refund of tax, consequent upon completion of export, is limited to tax discharged on procurement and there is no allegation that they would, in consequence of the declarations, be entitled to a whit more than that; nor is there any controverting of the claim of the exporter to be entitled to the refund. The logical and sequential arrangement of the obligations devolving on customs brokers does not admit of any scope to cite the same fact as act of omission or commission manifesting as breach thereto of two, or more, of the prescriptions of proper conduct. Of the four charges brought against the appellant, the first deals with responsibility to advice conformity with applicable law and consequence of discard of advice; the second with only ascertained information to be furnished to a client. Undervaluation is a determination on the part of the customs authorities and, in the absence of finding that the purported transaction price is supplemented by additional consideration or is partially reimbursed to exporter, any revision is merely exercise of empowerment to restrict benefit or recover duty; recourse to some rule of valuation is part of procedure of assessment which the licencing authority can hardly fasten on customs broker as normative conduct. Even the difference in weight, at about 10% of that declared, is so marginal, and with no discrepancy in declaration of quantity, as to have little impact on diligent completion of assessment - The lack of any discussion on the norms actuated for compliance with the obligation in regulation 10(e) of Customs Broker Licencing Regulations, 2018 and of flouting of the norms flowing from the few available facts puts paid to the finding that this obligation has been breached. There are, apparently, discrepancies in the declaration contained in the shipping bills. That the declarations should match the facts relating to exports is, no doubt, ideal. However, tendency to be casual about particulars that are not material is a human failing. There is no evidence that the enumerated discrepancy has impacted the sub-stantiveness of either the export or of the quantum of refund eligible. Not does it essay that the discrepancies came about because compliance with the law had not been insisted upon by the customs broker or that the discrepancies were so crucial to the outward clearance and benefit as to prevent the appellant from noticing those and reporting inappropriate action on part of the client to customs authorities. The facts do not invite the invoking of consequence of regulation 10(d) of Customs Broker Licencing Regulations, 2018 either. The Regulations have not, in any way, discharged proper officer of customs from responsibility for undertaking functions under the Act and neither does the Act contemplate that the customs broker is the authorized person to whose compliance with the Regulations customs officers subordinate their statutory powers. There are no reason that the detriment and penalty imposed in the orders should be allowed to survive - appeal allowed.

Summary

Issues:
The judgment involves the revocation of a customs broker license and imposition of penalties under the Customs Broker Licensing Regulations, 2018 based on discrepancies in shipping bills for the export of goods.

Summary:

Issue 1 - Revocation of Customs Broker License:
The appeal challenges the revocation of the customs broker license due to discrepancies in the shipping bills filed for the export of goods. The proceedings were initiated based on a report indicating mismatches in the declared and actual goods exported, leading to charges of breach of regulations under the Customs Broker Licensing Regulations, 2018.

Issue 2 - Breach of Regulations and Charges:
The appellant was charged with breaching various regulations under the Customs Broker Licensing Regulations, 2018, including failure to advise the client on compliance with laws, lack of due diligence in verifying information, and inefficiency in discharging duties promptly. The charges were based on discrepancies in the export declarations and interactions with the exporter.

Issue 3 - Legal Considerations and Tribunal's Analysis:
The judgment emphasizes the importance of adhering to proper conduct regulations by customs brokers and highlights that procedural breaches should not lead to license revocation. The Tribunal scrutinized the charges against the appellant, considering the lack of evidence for significant impact on exports or refunds, and the absence of complaints regarding speed and efficiency in services.

Issue 4 - Tribunal's Decision and Rationale:
After evaluating the evidence and legal precedents, the Tribunal found that the penalties imposed on the appellant were disproportionate to the alleged breaches. The judgment emphasized that discrepancies in declarations did not hinder the export process significantly, and there was no substantial violation warranting license revocation.

Conclusion:
The appeal challenging the revocation of the customs broker license and penalties imposed was allowed by the Tribunal, setting aside the impugned order due to the lack of substantial evidence supporting the charges brought against the appellant.