2024 (1) TMI 684 - AT - Customs

Revocation of Customs Brokers License - forfeiture of security deposit - levy of penalty - casual approach in supervising the employees - submission of forged/fabricated documents by the CB before the customs officer to avoid assessment of imported goods - whether the charges under the regulations are maintainable and the punishment imposed on the Customs Broker is justified? HELD THAT - The reason for fabrication has been admitted by all three in their statements under section 108 of the Act and the same are admissible in evidence as per the settled law and needs no citation in this regard. The fact that Shri Aman Jain and Shri Rajneesh Kumar have accepted that there was a need for fast clearance of the goods, shows that Prashant Jain had acted as per the instructions of the appellant. The admission by the appellant thus connects him to the act of his employee and hence he is responsible for the contravention of the Regulations. Having discussed that the actual fabrication was done by the CB representative to avoid the shed appraiser who keeps vigil over undervaluation cases in RMS and the fact that the goods in the bill of entry in question were found to be under-valued and in that view the importer had paid the differential duty with interest and penalty suo-moto, the entire modus-operandi of fabricating and forging the document was at the behest of the Customs broker which was implemented by Prashant Jain being the H-Card Holder of the CB - irrespective of whether any benefit had accrued to the appellant or not, he is guilty for such forgery/fabrication of the document thereby violating Regulation 10(j). It is an admitted position that the entire work of handling the import clearances was done by Shri Prashant Jain, the G-Card Holder of the appellant. The appellant cannot escape the liability by putting the entire burden on his employee and say that nothing was in his knowledge. Consequently, we hold that the appellant is vicariously liable and responsible for the conduct of Prashant Jain being his employee in fabricating the document. The provisions of the regulations cast special obligations on the Customs broker to ensure proper conduct of his employees - The appellant has miserably failed to supervise the working and the conduct of his employee in terms of Regulation 13(12) and is, therefore, liable for all the acts and omissions of his employee. Penalty - HELD THAT - It was noted that the appellant therein did not have any role in what was done by Shri Vipin Kumar and his team and that the lapse found is supervisory lapse assumes importance and that is how the punishment of revocation of license was set aside and the forfeiture of security deposit was only confirmed. In M/s Ashiana Cargo Services 2014 (3) TMI 562 - DELHI HIGH COURT , the Delhi High Court observed that only proved infraction on record is of the issuance of G cards to non-employees as opposed to the active facilitation of any infraction or any other violation of the CHA Regulations and therefore the revocation of the license was set aside being dis-proportionate to the violation. On the issue of imposing punishment under the Regulations it is opined that such action of forging and fabricating public document has to be seriously viewed and does not warrant any kind of leniency. The appellant being well educated (M.Tech) cannot plead ignorance as to what his employee was doing, more so when the said employee is not an old reliable employee but one who had joined the appellant firm only in November 2017. The submission of the appellant that there is no mens-rea and hence the impugned order imposing the punishment for revocation of the license, forfeiture of security deposit and imposition of penalty needs to be set aside - the punishment imposed in the present case by the impugned order does not call for any interference and is hereby upheld. Appeal dismissed.

Summary

Issues Involved:
1. Whether the charges under Regulation 10(j) and 13(12) of the Customs Broker Licensing Regulations (CBLR), 2018 are maintainable.
2. Whether the punishment imposed on the Customs Broker is justified.

Summary:

Issue 1: Charges under Regulation 10(j) and 13(12) of CBLR, 2018
Regulation 10(j): The Tribunal noted that the appellant firm submitted forged documents to customs authorities, as evidenced by the statements of Shri Prashant Jain and Shri Aman Jain. The Tribunal found that the need for faster clearance of goods was admitted by all involved parties, thus connecting the appellant to the act of forgery. Consequently, the appellant was held responsible for the contravention of Regulation 10(j).

Regulation 13(12): The Tribunal held that the appellant failed to supervise the conduct of his employee, Shri Prashant Jain, who engaged in the fabrication of documents. The Tribunal cited previous judgments, emphasizing that the Customs Broker is responsible for all acts or omissions of his employees. Thus, the appellant was found vicariously liable under Regulation 13(12).

Issue 2: Justification of Punishment
The Tribunal upheld the punishment of revocation of the Customs Broker License, forfeiture of the security deposit, and imposition of a penalty of Rs. 50,000/-. The Tribunal emphasized that the act of forging and fabricating public documents is a serious offense that does not warrant leniency. The Tribunal also noted that the appellant's educational background (M.Tech) implied awareness of the implications of his employee's actions. The Tribunal dismissed the appellant's reliance on various judgments, distinguishing them based on the facts of the present case.

The Tribunal concluded that the punishment imposed by the impugned order was appropriate and did not call for any interference. The appeal was accordingly dismissed.

(Pronounced on 9th Jan., 2024)