2024 (12) TMI 756 - HC - Customs

Revocation of Customs Broker license - forfeiture of the security deposit - levy of penalty - no requirement under Regulation 10(a) of CBLR, 2018 for the customs broker to have personally met the proprietor or any authorized person - HELD THAT - M/s Bright Clearing 2022 (11) TMI 935 - CESTAT NEW DELHI , after referring to the obligation of the customs broker, held that the burden is very liberal open and therefore, the scheme and its potential misuse cannot be put at the door of the customs broker. Just as the officers responsibility ends doing this part of the job (which may be of issuing the registration without physical verification or allowing the exports without assessing the documents or examining the goods) the customs broker s responsibility ends with fulfilling this responsibility under Regulation 10 of the CBLR, 2018. The dispute in these appeals relates to CBLR (10) (n), which, the Tribunal has discussed, did not require any physical verification of the address of the exporter/importer. The record shows that in this case, M/s Swastik Enterprises and M/s Ganesh Exports produced GSTIN and IEC certificates that were issued to them by the competent authority. The department has not doubted their identities. The department also issued the first-time export/ import approvals given public notice dated 17 September 2013. Upon verification of all these facts, the respondent may have processed the export papers of these two entities. Considering all these factors and the approach suggested in M/s Bright Clearing, it is not deemed appropriate to fault the CESTAT s order exercising the limited jurisdiction of entertaining an appeal only on substantial questions of law. The substantial questions of law as proposed do not arise in this appeal. The questions are mainly issues of re-appreciation of facts, and therefore, they cannot be styled as questions of law, much less still substantial questions of law - Appeal dismissed.

Summary

Issues:
Appeal against CESTAT judgment on revocation of license and forfeiture of security deposit based on breach of customs broker obligations under Regulation 10 of CBLR, 2018.

Analysis:
The appeal questions the justification of CESTAT in partially allowing the appeal by setting aside the revocation of the license and forfeiture of the security deposit of the respondent customs broker. The appellant argues that despite admitting default on the respondent's part and maintaining a penalty of Rs. 50,000, the CESTAT ignored the definite findings of breach of various sub-clauses of Regulation 10 of CBLR. The appellant contends that the respondent failed to comply with obligations under Regulation 10, facilitating non-genuine exporters, M/s Swastik Enterprises and M/s Ganesh Exports. The CESTAT's interference with the Principal Commissioner's order raises substantial questions of law regarding the respondent's compliance with customs broker obligations.

The respondent, on the other hand, argues that the appeal involves factual issues. The CESTAT evaluated the factual material on record following the decision in 'Commissioner of Customs (Airport and General) New Delhi Vs. M/s Bright Clearing & Carrier Pvt. Limited.' The respondent submits that the CESTAT correctly applied the principles from 'M/s Bright Clearing (Supra)' and found no serious breach of obligations, maintaining the penalty but setting aside the revocation of license and forfeiture of the security deposit. The respondent's stance is that the CESTAT's decision aligns with the law laid down in 'M/s Bright Clearing (Supra)' and the Principal Commissioner's approach was contrary to it.

The Tribunal extensively referred to 'M/s Bright Clearing (Supra)' and emphasized that the customs broker's responsibility is limited to fulfilling obligations under Regulation 10 of CBLR, 2018. The CESTAT's examination of the material documents on record, in line with 'M/s Bright Clearing (Supra),' concluded that the respondent's actions did not constitute a failure in obligations under Regulation 10 (n). The findings of fact regarding verification of exporter details and compliance with specified documents support the CESTAT's decision to not revoke the license or forfeit the security deposit.

The CESTAT's application of the Doctrine of Proportionality led to maintaining the penalty but setting aside the harsher penalties of license revocation and security deposit forfeiture. The respondent's verification of documents, compliance with regulations, and approval from competent authorities regarding the exporters M/s Swastik Enterprises and M/s Ganesh Exports were crucial factors in the CESTAT's decision. The CESTAT's order was deemed appropriate within the limited jurisdiction of entertaining appeals only on substantial questions of law, ultimately leading to the dismissal of the appeal without costs.