2023 (7) TMI 115 - AT - Customs

Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - failure in adhering to the timelines prescribed in the Customs Broker Licencing Regulations, 2018 - refusal of the inquiry authority to allow cross-examination of the two individuals whose statements were proposed to be used against them - violation of principles of natural justice - HELD THAT - It is noted that lack of any finding on each of the charges levelled against them. Both these records merely note the facts leading to the suspension, the statements of the employee and exporters and justification for not permitting cross-examination - there are no finding on the charges that could justify the conclusion that these were correctly held to be proved. It is not in dispute that the derelict individual was discharged from employment and relived of his directorship promptly. It is also not alleged anywhere that the other directors were parties to, or cognizant of, the scheme of deception to avail incentives undeservedly. Nor is there any evidence the appellant derived any financial compensation, small or large, from the exporter. Indeed, the impugned order is categorical solely on the vicarious role of the appellant in the entire mis-demeanour. Therefore, the finding of charges for breach of regulation 10 of Customs Broker Licencing Regulations, 2018 has no basis at all. The appellant cannot be held to have been in breach of regulation 10 of Customs Broker Licencing Regulations, 2018, on failure to ensure responsible discharge of duties by an employee, which has not been repelled in their submissions, the charge of breach of regulation 13(12) of Customs Broker Licencing Regulations, 2018 must be held as proved - Detriment must, invariably, be proportionate to the offence. In the light of the truncated findings of ours, interests of justice would be adequately served by confirming the penalty of ₹ 50,000 under regulation 17 of Customs Broker Licencing Regulations, 2018. The revocation of licence and forfeiture of security deposit ordered under regulation 18 of Customs Broker Licencing Regulations, 2018 are set aside. The impugned order modified - appeal allowed.

Summary

Issues involved:
The limited issue for determination in this appeal is the claim of injustice by M/s DP Logistics Pvt Ltd regarding the revocation of their 'customs broker' licence, forfeiture of security deposit, and imposition of a penalty under the Customs Broker Licencing Regulations, 2018, based on the alleged impropriety of their Director in dealing with an exporter.

Details of the judgment:

Issue 1: Allegation of injustice:
The appellant contended that the impropriety of their Director, Bhavin Vijay Pujari, dealing with an exporter should not be attributed to the company. They argued that the Director had resigned, and the company had terminated his employment.

Issue 2: Breach of regulations:
M/s Dhariya International exported goods misdeclared in terms of value and quantity, leading to suspension of the licence and issuance of a show cause notice to the appellant for breaching Customs Broker Licencing Regulations, 2018. The inquiry report found the charges proved and ordered penalties against the appellant.

Issue 3: Lack of findings on charges:
The inquiry report and the impugned order lacked specific findings on each charge against the appellant, leading to doubts about the justification for the penalties imposed.

Issue 4: Vicarious liability:
The judgment highlighted the vicarious liability of the appellant under regulation 13(12) of Customs Broker Licencing Regulations, 2018, based on the actions of their employee, Bhavin Pujar, even though the company was not directly involved in the deceptive scheme.

Issue 5: Penalty determination:
The penalty of &8377; 50,000 under regulation 17 of Customs Broker Licencing Regulations, 2018 was confirmed, while the revocation of licence and forfeiture of security deposit were set aside as disproportionate to the offence.

In conclusion, the appeal was allowed to the extent that the penalty was confirmed, but the revocation of licence and forfeiture of security deposit were overturned based on the truncated findings. The judgment emphasized the vicarious liability of the appellant under regulation 13(12) of the Customs Broker Licencing Regulations, 2018, while acknowledging the lack of direct involvement in the misconduct.