2023 (9) TMI 1390 - AT - Customs

Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - Advance Authorisation scheme - recovery of Customs Duty - HELD THAT - It is on the finding of breach of obligation to advise client to comply with statutory provisions and for reporting any non-compliance thereof and to discharge duties as customs broker with utmost speed and efficiency that the extreme detriment has been visited on the appellant. This has been rendered on the finding that no activity was undertaken at the premises of the importer or their supporting manufacturers, M/s Crocus Enterprises or M/s Maks Technologies, which, ostensibly, would have come to light had the appellant undertaken necessary inquiries before taking on their assignment. There are no evidence in the records that the appellant had not undertaken a preliminary ascertainment of the existence and identity of the importer; indeed, it is on record that the importer was an undertaking of standing. There is also no allegation about any misdeclaration in the bills of entry filed for clearance of plastic granules imported under the scheme. Doubtlessly, customs broking does fall within the logistic sector and it is not inconceivable that such brokers do undertake activities that precede as well as follow from such licenced functions which is not legal ground to bring such too within the ambit of Regulations intended for a specific purpose. Therefore, any activity that occurs after clearance of goods is clearly beyond the jurisdiction of Customs Broker Licencing Regulations, 2018. The inquiry report, as concurred with by the licencing authority, is bereft of any foundation that could lead to a conclusion that obligations in regulation 10 of Customs Broker Licencing Regulations, 2018 had been breached by the appellant - Appeal allowed.

Summary

Issues Involved:
1. Alleged breach of obligation in regulation 10(d) and 10(m) of Customs Broker Licencing Regulations, 2018.
2. Proceedings initiated under regulation 17 of Customs Broker Licencing Regulations, 2018 on charges of breach of regulation 10(d), 10(e), and 10(m) of the same regulations.

For the first issue, the judgment addresses the appeal against the order revoking a custom broker's license and imposing penalties for alleged breaches of regulations. The appellant, M/s OV Shipping Agencies, was accused of breaching obligations related to bills of entry filed for clearance of 'plastic granules' against 'advance authorizations.' The Principal Commissioner of Customs (General), Mumbai, revoked the license, forfeited the security deposit, and imposed a penalty under the Customs Broker Licencing Regulations, 2018. The inquiry report found the charges proved, leading to the appeal.

Regarding the second issue, the inquiry report found the appellant in breach of obligations to advise clients on compliance with statutory provisions and to discharge duties as a customs broker efficiently. The appellant was accused of diverting imported goods causing a loss to the exchequer. The judgment discusses the requirements under the Customs Broker Licencing Regulations, 2018, emphasizing the importance of compliance within the customs area and the penal jurisdiction of the Customs Act, 1962.

The judgment highlights the arguments presented by the appellant's counsel, citing previous tribunal decisions to support the contention that physical verification of importers/exporters is not a requirement. The tribunal heard from the Authorized Representative, emphasizing the magnitude of loss to the exchequer in the case. The findings against the appellant were based on the diversion of imported goods before reaching legitimate destinations, which was deemed a breach of regulations.

The judgment concludes that the inquiry report lacked a foundation to establish that the appellant breached obligations under the Customs Broker Licencing Regulations, 2018. It was found that the activities occurring after the clearance of goods were beyond the jurisdiction of the regulations, and there was no evidence to suggest that unauthorized instructions were communicated by the appellant to transporters. As a result, the impugned order was set aside, and the appeal was allowed.