2024 (8) TMI 328 - AT - Customs

Revocation of Customs Broker License - forefeiture of security deposit - levy of penalty - import of 1792 MT of Black Papper (CTH 0904) into KASEZ - 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 - violation of principles of natural justice - HELD THAT - Regulation 17 of CBLR, 2018 prescribes the procedure for revoking the license or imposing penalty. It is found that department in the present matter relies upon the statements of witnesses. 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 ' 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. It was held by the Court in BASUDEV GARG, ARUN GUPTA, ANIL GOEL VERSUS COMMISSIONER OF CUSTOMS 2013 (5) TMI 350 - DELHI HIGH COURT that it is clear that unless such circumstances exist the noticee would have a right to cross-examine the person whose statements are being relied upon even in quasi judicial proceedings.' 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 - 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. There are force in argument of appellant that Customs Broker and his employee are two different legal entities, hence a customs broker cannot be held responsible for the act or omissions of his employee where there is no appointment to act as Customs Broker - In the present there is no dispute on the fact that license under the CBLR, 2018 is issued to the Appellant and not Shri Pankaj Thakkar, who is a different legal entity. The impugned order revoking the Customs Broker Licence under Regulation 14 of CBLR, 2018 is legally not sustainable - the impugned order set aside - appeal allowed.

Summary

Issues:
Revocation of Customs broker license, forfeiture of security deposit, imposition of penalty.

Analysis:
The judgment revolves around an appeal against an Order-in-Original revoking a Customs broker's license, forfeiting the security deposit, and imposing a penalty. The case involves an inquiry initiated by DRI Ludhiana against an individual involved in evading customs duty. The appellant challenged the impugned order on grounds of violation of natural justice and procedural irregularities. The appellant argued that they were not provided with essential documents and the opportunity to cross-examine witnesses, rendering the order legally unsustainable.

The appellant contended that the impugned order violated Regulation 17 of the CBLR, 2018, which mandates a specific procedure for revoking a license or imposing a penalty. The appellant highlighted the importance of cross-examination and cited legal precedents emphasizing the right to cross-examine witnesses whose statements are relied upon in adjudication. The appellant stressed the distinction between a Customs broker and their employee, asserting that without proper appointment, the broker cannot be held liable for the actions of an employee.

The judgment scrutinized the procedural fairness of the inquiry and the Commissioner's decision. It noted that the appellant's requests for relevant documents and cross-examination were disregarded, contravening the principles of natural justice. The judgment emphasized the necessity of following the prescribed procedure under Regulation 17 of the CBLR, 2018 and ensuring the right to cross-examination. Additionally, it underscored the legal distinction between a Customs broker and their employee, emphasizing the need for proper authorization and documentation.

Ultimately, the Tribunal found merit in the appellant's arguments, concluding that the impugned order was legally unsustainable due to procedural irregularities and lack of opportunity for cross-examination. The Tribunal set aside the order, allowing the appeal with consequential relief. The judgment highlights the significance of procedural fairness, adherence to regulations, and the right to cross-examination in administrative proceedings concerning Customs brokers.