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2023 (9) TMI 1389 - AT - CustomsSuspension of license of the Custom Broker (CB) - shipping bills filed during the period of 27.02.2021 to 15.05.2021 on behalf of an exporter whose first GSTIN was Suo-moto cancelled retrospectively, and the second GSTIN although active, was non-functional at the registered premises - HELD THAT - The Revenue has not brought forward any evidence that the earlier export documents filed by the appellant are fabricated or manipulated. The Revenue has also not been able to lead any evidence that the said exporter was not existent at the time of export, and the CB had connived in any fraud to defraud the Government exchequer. It has also been brought on record that one of the GSTINs was still in existence at the time of suspension of the appellant s license. Although there is enough power vested in the Commissioner to suspend the license of Custom Broker, in terms of Customs Brokers Licensing Regulations, 2018, however the said power which impacts the livelihood of the person and his employees needs to be exercised with caution and in accordance with the inbuilt safeguards, to prevent the arbitrary and reckless use of the power - in the present case, Commissioner has not recorded any reason for the cause of immediate suspension. Infact, there is no cogent reason or finding recorded by the Commissioner to suspend the license of the appellant two years after the date of export. The present impugned order passed under Regulation 16 is without there being any finding as to why immediate action is necessary to suspend the license - Appeal allowed.
Issues Involved:
1. Whether the Customs Broker License of the appellant was suspended correctly or not. Summary: Issue 1: Suspension of Customs Broker License The present appeal challenges the suspension order dated 02.03.2023, which suspended the license of the Customs Broker (CB) with immediate effect. The appellant CB had filed shipping bills between 27.02.2021 and 15.05.2021 for an exporter whose first GSTIN was retrospectively canceled, and the second GSTIN, though active, was non-functional at the registered premises. The appellant, M/s Shakti Cargo Movers Pvt Ltd., a Customs Broker with CHA license R-26/DEL/CUS/2010, provided services to M/s Shree Enterprises. The appellant verified all necessary KYC documents, including the IEC, GST registration certificate, PAN, Aadhar number, and others. The Commissioner received an Analytical Report identifying 27 non-existent exporters, leading to the immediate suspension of the appellant's license. The appellant argued that Regulation 16 of CBLR, 2018 requires an "emergent need" for suspension, which was absent in this case. The cause of action occurred in May 2021, but the suspension was ordered in March 2023, showing no proximity in time to justify an emergent need. The appellant contended that the exporter was in existence at the time of export and had participated in investigations and adjudications. The cancellation of GST registration retrospectively did not support the respondent's case, and the issuance of the second GSTIN proved the firm's existence. The appellant also argued that verifying the GSTIN's correctness was not their responsibility but that of the issuing authority. The respondent reiterated that the appellant provided export services to a non-existent firm, M/s Shree Enterprises, and had not complied with CBLR, 2018 provisions. The suspension was confirmed after giving appropriate opportunity as per principles of natural justice. The Tribunal noted that Regulation 16 of CBLR, 2018 allows suspension where immediate action is necessary. However, there was no proximity in time between the cause of action and the suspension order, and no emergent need was established. The Tribunal found no evidence that the earlier export documents were fabricated or that the exporter was non-existent at the time of export. The physical verification of the exporter's premises was not the appellant's responsibility but that of the GSTIN approving authority. The Tribunal referenced similar cases, including Sai Datta Shipping and Thiru Rani Logistic Pvt. Ltd., where it was held that suspension should be based on immediate need and not arbitrary or reckless use of power. The Tribunal concluded that the suspension order lacked any finding of immediate need and was not sustainable under law. The Inquiry Report exonerated the appellant from the allegations, further supporting the appellant's case. The Tribunal set aside the impugned suspension order and allowed the appeal.
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