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2024 (7) TMI 940 - AT - CustomsRevocation of Customs Broker License - forfeiture of the full amount of security deposit furnished by the customs broker - levy of penalty - misdeclaration in respect of value and other material particulars - denial of cross-examination - violation of principles of natural justice - HELD THAT - The investigation revealed goods covered under Bill of Entry were undervalued mis-declared undeclared/concealed and prohibited in nature. Further as per revenue the importer was a dummy firm. Alleging violation on the part of the appellant Customs Broker the Commissioner Customs initiated proceeding under CBLR 2018 (erstwhile CBLR 2013) by issuing a notice to the appellant; Inquiry Officer was appointed and on the basis of the said Inquiry report in the impugned order the adjudicating authority directed revocation of license forfeiture of security deposit and imposition of penalty of Rs. 50, 000/- on the appellant. The main contention of the Appellant is that neither the Inquiry officer nor the Ld. Commissioner gave an opportunity to Appellant to bring the correct facts on records by way of cross-examination of the persons whose statements were relied upon by the Department. Further the Inquiry officer delayed the issuance of his report beyond the prescribed period provided under CBLR 2018 hence the impugned order is not sustainable in law. The right of cross-examination has been recognized under Regulation 17(4) of the CBLR Regulations 2018 which requires Inquiry Officer to give reasons if he intends to deny such right to the Customs Broker. Recognizing the right of cross-examination in the case of FLEVEL INTERNATIONAL VERSUS COMMISSIONER OF CENTRAL EXCISE 2015 (9) TMI 1151 - DELHI HIGH COURT held that the circumstances under which the right of cross-examination can be taken away would have to be exceptional . This would include circumstances where the person who had given the statement was dead or cannot be found or is incapable of giving evidence or is kept out of the way by adverse party or whose presence cannot be obtained without an amount of delay or expense which under the circumstances the Court considers unreasonable. In the present case the Appellant questioned the integrity of the statements of the persons recorded under Section 108 of the Customs Act 1962. Such statements were required to be tested through cross-examination. Despite specific request by the Appellant to cross examine such witnesses no attempt was made to secure their presence in the adjudication proceedings - The Commissioner of Customs ignored the error on the part of the Inquiry Officer to grant an opportunity of cross examination of the importer and other persons. Provisions of Regulation 17(4) were given a complete go-by. Not allowing the Customs broker an opportunity to cross-examine the persons examined in support of the grounds forming the basis of these proceedings has resulted in serious prejudice to the Appellant. The impugned order is set aside - appeal allowed.
Issues Involved:
1. Revocation of the Customs Broker license. 2. Forfeiture of the security deposit. 3. Imposition of a penalty. 4. Violation of principles of natural justice. 5. Delay in the Inquiry Report. 6. Denial of cross-examination rights. Issue-wise Detailed Analysis: 1. Revocation of the Customs Broker License: The appeal was filed against the Order-in-Original which revoked the Customs Broker license of the appellant. The adjudicating authority found that the appellant, acting as a Customs Broker for M/s Crescent Traders, filed a Bill of Entry with mis-declared and undervalued goods, some of which were counterfeit and violated BIS norms. The investigation revealed that M/s Crescent Traders was a dummy firm, and the Customs Broker failed to verify the KYC documents and the genuineness of the importer. The Commissioner initiated proceedings under CBLR, 2018, and based on the Inquiry Report, revoked the license. 2. Forfeiture of the Security Deposit: The adjudicating authority ordered the forfeiture of the full amount of the security deposit furnished by the Customs Broker. This decision was based on the findings that the Customs Broker failed to adhere to the regulations under CBLR, 2018, by not verifying the importer's credentials and mis-declaring the imported goods. 3. Imposition of a Penalty: A penalty of Rs. 50,000/- was imposed on the appellant for the contraventions under Regulation 10(a), 10(d), 10(e), 10(f), 10(n), and 13(12) of the CBLR, 2018. The penalty was part of the punitive measures taken by the adjudicating authority in addition to the revocation of the license and forfeiture of the security deposit. 4. Violation of Principles of Natural Justice: The appellant contended that the impugned order was in gross violation of the principles of natural justice. The appellant was not given an opportunity to cross-examine the witnesses whose statements were relied upon by the department. The cross-examination of Shri Sandesh G Tanwar, the purported proprietor of M/s Crescent Traders, was crucial to the appellant's defense. The Inquiry Officer and the Commissioner did not allow this, which vitiated the proceedings under CBLR, 2018. 5. Delay in the Inquiry Report: The Inquiry Officer delayed issuing his report beyond the prescribed period of 90 days from the date of the show cause notice, which was a violation of Regulation 17(5) of CBLR, 2018. The delay in the Inquiry Report submission affected the subsequent timelines, causing a cascading effect on the proceedings. The court found that the time limits prescribed under CBLR, 2018 are mandatory and not directory, citing multiple judgments that emphasized the sacrosanct nature of these timelines. 6. Denial of Cross-Examination Rights: The appellant's right to cross-examine the witnesses was denied, which is recognized under Regulation 17(4) of CBLR, 2018. The Inquiry Officer did not provide reasons for denying this right, which is a requirement under the regulation. The denial of cross-examination resulted in serious prejudice to the appellant, as the statements of the witnesses were crucial to the defense. The court cited several judgments that underscored the importance of cross-examination in ensuring fair adjudication. Conclusion: The Tribunal found merit in the appellant's arguments regarding the violation of natural justice and the mandatory nature of the timelines under CBLR, 2018. The denial of cross-examination and the delay in the Inquiry Report were significant procedural lapses. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief. Pronouncement: The judgment was pronounced in the open court on 16.07.2024.
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