2023 (7) TMI 365 - AT - Customs

Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - attempt to smuggle red sanders out of the country - HELD THAT - The appellant has furnished the authorization received by them and its provenance is not in dispute. The obligation in regulation 10(a) prescribes obtaining of authorization which is, undeniably, with them. From this, there can be no doubt that beach of regulation 10(a) of Customs Broker Licencing Regulations, 2018 has been incorrectly attributed to them. It has been held that the appellant had, in fact, been aware of the breach insofar as client is concerned from transacting the business through non-authorized person with whom an arrangement for sharing of spoils , so to speak, had been devised. On the bare facts made available to us, mere deployment of an unauthorized person does not, ipso facto, constitute breach of obligations in regulation 10(b) of Customs Broker Licencing Regulations, 2018. The requirement to permit authorized persons is restricted to customs station. The presence of such person to handle off-location stuffing is not an offence and presence in a customs station cannot but be implied permission owing to regulatory stipulations of entry into such places. Therefore, it cannot be said that appellant had utilized unauthorized persons in discharge of its obligations in a customs station. Failure to verifiy the antecedents and correctness of Importer Exporter Code (IEC) Number - HELD THAT - Insofar as regulation 10(n) of Customs Broker Licencing Regulations, 2018 is concerned, it is not alleged that the said ascertainment had not been done but that, in the absence of contractual engagement with exporter, the appellant could not have carried out the necessary verifications. This argument is not tenable as the appellant could yet have not been relieved of that responsibility which should have been discharged on the basis of data availability. In failing to acknowledge so in the finding on the doubt, required to be complied therein, the same cannot be said to exist through alternative Regulations. It is directed that the matter be taken up for disposal restricted only to alleged breach of regulation 10(n) of Customs Broker Licencing Regulations, 2018 - appeal disposed off by way of remand.

Summary

Issues Involved:
1. Revocation of Customs Broker Licence.
2. Forfeiture of Security Deposit.
3. Imposition of Penalty.
4. Alleged Breach of Various Regulations under Customs Broker Licencing Regulations, 2018.

Summary:

1. Revocation of Customs Broker Licence:
The appellant challenged the revocation of their customs broker licence and the forfeiture of their security deposit under regulation 14 of the Customs Broker Licencing Regulations, 2018. The revocation was due to misconduct related to an attempt to smuggle 'red sanders' out of the country.

2. Forfeiture of Security Deposit:
The security deposit was forfeited along with the licence revocation, as the appellant was found to have contributed to the smuggling attempt.

3. Imposition of Penalty:
A penalty of Rs. 50,000 was imposed under regulation 18 of the Customs Broker Licencing Regulations, 2018, which the appellant contested.

4. Alleged Breach of Various Regulations:
The proceedings were initiated under regulation 17, with allegations of breaches of regulations 10(a), 10(b), 10(d), 10(e), and 10(n). The charges included failure to obtain proper authorization, not transacting business personally or through an authorized employee, and lack of due diligence in verifying the correctness of information and identity of the client.

Detailed Judgment:

Authorization and Due Diligence:
The appellant provided the authorization received, which was not disputed. The tribunal found that the breach of regulation 10(a) was incorrectly attributed as the authorization was indeed with the appellant.

Use of Unauthorized Persons:
The tribunal noted that mere deployment of an unauthorized person does not constitute a breach of regulation 10(b). The requirement to permit authorized persons is restricted to customs stations, and there was no evidence that unauthorized persons were used at customs stations.

Verification of Client Information:
Regarding regulation 10(n), it was argued that the appellant could not have carried out necessary verifications without a contractual engagement with the exporter. However, the tribunal found that the appellant was still responsible for verification based on available data. There was no finding that the premises did not exist or that the exporter was not associated with the address.

Conclusion:
The tribunal concluded that the disposal of the show cause notice should have arrived at a conclusion based on the law. The appeal was disposed of by way of remand, directing that the matter be taken up for disposal restricted only to the alleged breach of regulation 10(n) of Customs Broker Licencing Regulations, 2018.

Order Pronounced:
The order was pronounced in the open court on 28/06/2023.