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2024 (5) TMI 846 - AT - CustomsCustoms broker - Revocation of License - forfeiture of security deposit - Penalty - Subletting of licence - Smuggling of red sanders - Show-Cause Notice - Non-grant of opportunity to cross examine - Violation of various provisions of Regulations of CBLR 2018 - HELD THAT - We find that there is evidence to show that the appellant was very casual in his approach in transacting the work related to custom broker. We find that there are some inadequacies in the working of the appellant as far as the work of custom broker is concerned. We find that the custom broker vide his statement dated 04.04.2022 has accepted his fault. It is evident that the customs broker neither conducted the business personally nor through an authorized representative duly approved by customs; the custom broker shared his password with unauthorized persons and sublet his license for pecuniary benefit; he accepted that Shri Manish Kumar Shrivastav uploaded the documents in the icegate and that he has not authorized anyone; during his meeting with Shri Manjeet Singh he was offered many clients in lieu of the license; Shri Manish Kumar Shrivastav assured him to pay Rs. 20, 000/- per month; Shri Manjeet Singh in fact paid Rs. 15, 000/- for the renewal of the license; the custom broker got two lakhs for allowing four persons to represent his firm; he received all the payments from AS clearing belonging to Shri Manjeet Singh. We find that the appellant custom broker has allowed his license to be used by unauthorized persons for pecuniary gains. We find that such a casual behavior by the appellant is certainly breach of the trust reposed on the custom broker by the department. Any continuation of the license would have been detrimental to the interest of the revenue and the exporters. Therefore we hold that the revocation of license has been correctly done. However having said so we are of the considered opinion that the penalty imposed should be commensurate with the omission or commission. We find that revocation of license itself is enough punishment in such cases. As the security deposit is ordered to be forfeited imposition of penalty of Rs. 50, 000/- is not warranted. We are inclined to reduce the same to Rs. 10, 000/-. Thus the appeal is partly allowed to the extent of reducing the penalty imposed under regulation 18 read with regulation 14 of CBLR 2018 to Rs. 10, 000/-; revocation of license and forfeiture of security deposit is however upheld.
Issues Involved:
1. Revocation of Customs Broker License 2. Forfeiture of Security Deposit 3. Imposition of Penalty 4. Alleged Violation of CBLR, 2018 Regulations Issue-wise Detailed Analysis: 1. Revocation of Customs Broker License: The appellant's Customs Broker License was revoked due to alleged violations of the Customs Broker Licensing Regulations (CBLR), 2018. The appellant was accused of facilitating the smuggling of red sanders disguised as Basmati Rice. The container, intercepted at Mundra Port, was found to contain prohibited red sanders instead of the declared goods. The appellant argued that he complied with all regulations, verified KYC documents, and did not share his ID or password. However, the Tribunal found that the appellant was casual in his approach, allowed unauthorized persons to use his license, and did not conduct business personally or through an authorized representative. The Tribunal upheld the revocation, emphasizing the importance of trust and responsibility in the role of a Customs Broker. 2. Forfeiture of Security Deposit: The security deposit of the appellant was forfeited as part of the penalty for the violations. The Tribunal noted that the appellant allowed his license to be used by others for financial gain, which constituted a breach of trust. The appellant's casual behavior and failure to supervise his employees adequately justified the forfeiture. The Tribunal upheld the forfeiture, aligning with the principle that such actions are detrimental to the interests of revenue and exporters. 3. Imposition of Penalty: A penalty of Rs. 50,000/- was initially imposed on the appellant. The appellant contended that the penalty was unwarranted as he had not violated any regulations intentionally. The Tribunal found that while the revocation of the license and forfeiture of the security deposit were justified, the penalty should be commensurate with the omission or commission. The Tribunal reduced the penalty to Rs. 10,000/-, considering the revocation and forfeiture as sufficient punishment. 4. Alleged Violation of CBLR, 2018 Regulations: The appellant was accused of violating multiple regulations under CBLR, 2018, including: - Regulation 10(b): Sharing of ID/password with unauthorized persons. - Regulation 10(d): Failure to verify the identity of the exporter and collect documents personally. - Regulation 10(n): Inadequate verification of KYC documents. - Regulation 13(3): Allowing unauthorized persons to sign documents. - Regulation 13(12): Failure to exercise proper supervision. The appellant argued that he verified the KYC documents online and did not share his ID/password. He also claimed that the consignment was sealed and supervised by Customs, mitigating his responsibility. However, the Tribunal found evidence of casual behavior and financial transactions indicating that the appellant allowed unauthorized persons to use his license. The Tribunal concluded that the appellant's actions constituted a breach of trust and upheld the findings of the adjudicating authority. Conclusion: The Tribunal upheld the revocation of the Customs Broker License and the forfeiture of the security deposit, citing the appellant's casual approach and breach of trust. The penalty was reduced from Rs. 50,000/- to Rs. 10,000/-, considering the revocation and forfeiture as sufficient punishment. The Tribunal emphasized the importance of the Customs Broker's role and the trust reposed in them by both the importers/exporters and the government agencies.
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