2023 (9) TMI 771 - AT - Customs

Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - misdeclared imports - documentation for entitling import by M/s Twister Enterprises had been secured in the name of one Atul Dilip Baviskar who claimed to be a helper in a construction venture and denied any knowledge of or wherewithal for undertaking imports - inquiry was completed after more than eleven months of the notice and report - HELD THAT - The impugned goods were found to be offending for having been misdeclared. There is no allegation that the appellant was either a party to it or was aware of any transaction between shipper and client in furtherance of such intent. A case can hardly be made out that a customs broker would in normal course of business be privy to misdeclaration and may thereby have not given proper advice or correct information to the client. It is therefore to be presumed unless established to the contrary that proper advice has been rendered to a client and that correct information has been imparted; it cannot contrarily be presumed upon subsequent examination of goods and hindsight that advice had not been properly rendered and that information imparted had not been verified for correctness. A tendency to be less than meticulous in drafting of charges is evident here and proceedings do acquire the characteristic of trivializing the institution of custom broker ; if they are to perform the vital role expected of them resort to Custom Broker Licencing Regulations 2018 has to be deliberated upon by licencing authorities in the context of each incident of breach of obligation. Disciplining of customs broker is not be entered into lightly nor receded from hastily. That the appellant had not interacted with the proprietor of the importing entity is on record; consequently it would not be wrong to conclude that the several documents of identity and location had not been verified. Though that of itself may not be taken as having contributed to misdeclaration it is nonetheless a breach of obligation. It would be appropriate to modify the consequential detriment to bear proportion to the established breach. Accordingly the revocation of licence and forfeiture of security deposit is set aside - the penalty of Rs. 50, 000/- sustained - Appeal allowed in part.

Summary

Issues involved:
The issues involved in the judgment are the revocation of a custom broker license, forfeiture of security deposit, imposition of penalty, and alleged breaches of obligations by the custom broker.

Revocation of License and Imposition of Penalty:
The appeal stemmed from the revocation of the custom broker license of M/s Sainath Clearing Agency, accompanied by forfeiture of the security deposit and imposition of a penalty of Rs. 50,000 under the Customs Broker Licensing Regulations, 2018. The revocation was based on acts of omission and commission in handling an import bill of entry, which was found to have been misdeclared. The appellant was charged with contravention of various regulations, following an inquiry that concluded with three violations being proved.

Alleged Breaches of Obligations:
The appellant was charged with several failures, including failure to advise the client to comply with statutory provisions, rules, and regulations, failure to exercise due diligence in verifying information provided to the client, and failure to verify the correctness of specified details, identity of the client, and place of functioning. The findings against the appellant were rooted in statements regarding dealings with specific individuals and lack of verifications, leading to the establishment of the charges.

Legal Analysis and Conclusion:
The judgment highlighted the lack of specific imputation of facts and evidence supporting the alleged breaches of obligations by the custom broker. It emphasized the importance of meticulous drafting of charges and the need for licencing authorities to deliberate on breaches of obligations in each case. The judgment concluded that while certain breaches were established, the revocation of the license and forfeiture of the security deposit were set aside, with the penalty sustained at Rs. 50,000.

Separate Judgment:
No separate judgment was delivered by the judges in this case.