2024 (12) TMI 366 - AT - Customs

Revocation and forfeiture of Security Deposit - Allegation of breach of regulations on Customs Broker - Violation of principles of natural justice - failure to comply with time-lines prescribed in Customs Brokers Licensing Regulations, 2018 - violation of regulations 10(d), 10(e), and 10(f) of Customs Brokers Licensing Regulations, 2018 - HELD THAT - The substantial delay that occurred between the offence report of May 2022 and the final determination of proceedings on 9th January 2024, which has outstripped prescriptions set out in regulation 17 of Customs Brokers Licensing Regulations, 2018, was, though brought before the licensing authority, discarded by drawing upon the decision of the Hon'ble High Court of Bombay in THE PRINCIPAL COMMISSIONER OF CUSTOMS (GENERAL) MUMBAI VERSUS UNISON CLEARING PVT. LTD., AND OTHERS. 2018 (4) TMI 1053 - BOMBAY HIGH COURT . The licensing authority attempted to justify the delay on the ground of transfer of officers having impeded conclusion of enquiry within the prescribed period. The licensing authority is entrusted with responsibility, including of all aspects of statutory and administrative roles, by assumption of office and such official, found fit to hold the charge, as determined by the Central Board of Indirect Taxes and Customs (CBIC), is, doubtlessly, considered competent enough to discharge all aspects of the office efficiently. That the Principal Commissioner of Customs (General) now explains that only one aspect of such responsibility had been accorded more significance to the detriment of others does not set well with both administrative reach and the faith reposed by superior authorities. There is nothing on record to suggest that the licensing authority was not aware of the prescriptions of law or that he was not competent by any stretch. The Hon'ble High Court, in re Unison Clearing P Ltd, had held that the stipulations in regulation17 of Customs Brokers Licensing Regulations, 2018 would acquire the character of being directory upon demonstration that customs broker was responsible for the delay in completion of the proceedings. That is not the case here; on the contrary, it would appear that the administration had, for one reason or the other, failed to comply with the prescriptions. Considering the circumstances in which the licensing authority has attempted to transform mandatory stipulations as directory without being in consonance with the decision of the Hon'ble High Court of Bombay in re Unison Clearing Pvt Ltd, the proceedings failed at the threshold itself - It is not required to assess the merit of the submission on behalf of appellant. The impugned order is set aside to allow the appeal.

Summary

Issues:
Violation of principles of natural justice in the impugned proceedings, Compliance with time-lines prescribed in Customs Brokers Licensing Regulations, 2018, Alleged breaches of regulations 10(d), 10(e), and 10(f) of Customs Brokers Licensing Regulations, 2018, Disproportionate imposition of detriments under the regulations.

Analysis:

The judgment addresses the violation of principles of natural justice in the impugned proceedings. The appellant argued that documents related to earlier imports were not provided, and statements of the importer and CFSL report were not tested through cross-examination. The appellant relied on decisions from High Courts and previous Tribunal decisions to support their argument. The appellant also contended that the timelines prescribed in the regulations were not followed, with delays at each stage of the proceedings.

The judgment delves into the alleged breaches of regulations 10(d), 10(e), and 10(f) of Customs Brokers Licensing Regulations, 2018. The appellant argued that the charges were not substantiated and that the licensing authority misconstrued the scope of the regulations. They contended that there was no attempt to misrepresent the goods and that the licensing authority focused on public safety concerns not relevant to the regulations. The appellant also challenged the reliance on the importer's statement without cross-examination and argued that information was not withheld from the client.

Regarding the compliance with time-lines prescribed in the regulations, the judgment scrutinized the substantial delay between the offense report and the final determination of the proceedings. The licensing authority justified the delay due to officer transfers, but the judgment found this reasoning inadequate. Citing a High Court decision, the judgment emphasized that time-lines should not be deemed directory without justification for delays. The judgment concluded that the proceedings failed due to the attempt to transform mandatory stipulations into directory without proper justification.

Lastly, the judgment addressed the issue of disproportionate imposition of detriments under the regulations. The appellant argued that the detriments imposed were disproportionate considering the limited scope for misuse of the goods and the assessable value. Ultimately, the impugned order was set aside to allow the appeal, highlighting the failure of the proceedings at the threshold due to the issues discussed.