2024 (8) TMI 1061 - AT - Customs

Revocation of Customs Broker Licence - forfeiture of whole of security deposit - levy of penalty - contravention of Regulations 10(a), 10(b), 10(d), 10(e), 10(f), 10(k) 10(n) of the CBLR, 2018 - dittoing of the findings recorded in the inquiry report without any application of judicial mind or thinking to regulation contravened and the facts in hand - violation of principles of natural justice - HELD THAT - It is found that the a bill of entry has been filed using the login id and password of the Appellant. Subsequently the consignment covered by the said bill of entry is found to be mis-declared and has been confiscated, allowed to be redeemed against payment of redemption fine, for re-export. Except for the few statements, whose excerpts are reproduced in the impugned order no other evidence has been adduced in the entire proceedings to hold the Appellant guilty of contravention of various provisions of Regulations 10 (a), (b), (d),(e),(f),(k) (n) of the CBLR, 2018 - From the excerpts as recorded in impugned order it is not found that even an iota of evidence as per which it can be concluded that Appellant was responsible for filing of the said bill of entry. Proprietor of importer Mr Archit Sharma specifically states that he never had contacted or met the Appellant or was even under impression that bill of entry for clearance of his consignments were to filed by the Appellant. When Appellant has denied about having signed or issued any such authorization letter the signatures on the letter have not been subjected to any forensic examination by a hand writing expert. Except for statement of the Shri Awadhendra Kumar that he was working as per agreement letter dated 16.07.2018 in partnership with Appellant there is nothing to implicate the Appellant in the entire proceedings. Even copy this agreement letter submitted by Shri Awadhendra Kumar has not been subjected to any forensic examination. On the contrary this letter goes on to establish the case that Appellant has stated in his statement to effect that his login id and password has been compromised and used for filing this bill of entry. The case of mis-declaration has been adjudicated without issuance of show cause notice on the basis of waiver of show cause notice by the importer implicating the Appellant and imposing penalty of Rs 1,00,000/- on him under Section 114AA of the Customs Act, 1962, and without holding him liable for penal action under Section 112 (a) or 112 (b) of the Customs Act,1962. Only importer has been held liable under Section 112 (a) of the Customs Act, 1962 for contravention making the goods liable for confiscation under Section 111 (d) and (o) of the Customs Act, 1962. The impugned order holding that Appellant have contravenened the provisions of regulation 10 (a), (b), (d),(e),(f),(k) (n) of the CBLR, 2018 is without any basis in law or on cogent examination of the facts in hand. Thus there are no merits in the impugned order. Appeal dismissed.

Issues Involved:
1. Revocation of Customs Broker License.
2. Imposition of penalty under Regulation 18 of CBLR, 2018.
3. Suspension of Customs Broker License.
4. Prohibition from working in Customs jurisdiction.
5. Alleged contraventions of various provisions of CBLR, 2018.
6. Adjudication of mis-declared goods and penalties under the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Revocation of Customs Broker License:
The Customs Broker License No. 05/CB/Regular/KNP/2016 issued to the appellant was revoked under Regulation 14 of CBLR, 2018, due to violations of several provisions of Regulation 10. The appellant was found to have contravened Regulations 10(a), 10(b), 10(d), 10(e), 10(f), 10(k), and 10(n) of CBLR, 2018. The adjudicating authority concluded that the appellant failed to obtain proper authorization, did not transact business personally or through an authorized employee, failed to advise clients on compliance with relevant laws, did not exercise due diligence, withheld information, failed to maintain up-to-date records, and did not verify the correctness of information.

2. Imposition of Penalty under Regulation 18 of CBLR, 2018:
A penalty of Rs. 50,000 was imposed on the appellant under Regulation 18 of CBLR, 2018, for contravening the aforementioned provisions of Regulation 10. The adjudicating authority justified the penalty by stating that the appellant failed to comply with the regulations, which warranted the imposition of a penalty.

3. Suspension of Customs Broker License:
The appellant's license was initially suspended by Order No. 01/COMMR./CUSTOMS/LKO/2022-23 dated 24.05.2022, for contraventions of Regulations 10(a), (b), (d), (e), (f), (k), and (n) of CBLR, 2018. This suspension was further extended by Order No. 02/COMMR./CUSTOMS/LKO/2022-23 dated 12.07.2022. The suspension was continued until further orders, pending the outcome of the inquiry.

4. Prohibition from Working in Customs Jurisdiction:
A prohibition order was issued by the Commissioner of Customs, New Delhi, under Regulation 15 of CBLR, 2018, prohibiting the appellant from working in all stations of Customs under Delhi jurisdiction. The order directed the appellant to surrender all original Customs Passes issued to their employees/partners/directors immediately.

5. Alleged Contraventions of Various Provisions of CBLR, 2018:
The inquiry officer found that the appellant had violated multiple provisions of Regulation 10 of CBLR, 2018. The findings included that the appellant did not obtain proper authorization from the importer, failed to transact business personally or through an authorized employee, did not advise the client on compliance with relevant laws, did not exercise due diligence, withheld information from the client, failed to maintain up-to-date records, and did not verify the correctness of information.

6. Adjudication of Mis-declared Goods and Penalties under the Customs Act, 1962:
The adjudicating authority ordered the confiscation of goods under Section 111(d) and 111(o) of the Customs Act, 1962, and allowed the importer to redeem the goods on payment of a redemption fine for re-export. Penalties were imposed on the importer and the appellant under Section 112(a)(i) and Section 114AA of the Customs Act, 1962, respectively. The inquiry revealed that the appellant's login credentials were used to file the Bill of Entry without proper authorization, leading to the mis-declaration of goods.

Judgment Analysis:
The tribunal dismissed Appeal No. C/70439/2022 as infructuous, as the license revocation made the suspension appeal moot. The tribunal allowed Appeal No. C/70212/2023, finding that the impugned order lacked a basis in law and was not supported by sufficient evidence. The tribunal noted that the findings in the impugned order were a mere repetition of the inquiry report without judicial application of mind. The tribunal emphasized the need for cogent evidence to hold the appellant guilty of contraventions and found no merit in the impugned order.

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