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2025 (2) TMI 112 - AT - CustomsImposition of a penalty under Regulation 18 of the Customs Brokers Licensing Regulations (CBLR) 2013 - alleged violations of Regulations 11(a) 11(n) and 11(9) of CBLR - HELD THAT - Regulation 18 prescribes revocation of license or imposition of penalty and hence it is clear that there could be either revocation of license or imposition of penalty. The said provision embodies that the penalty if at all imposed shall not exceed 50, 000 on Customs Broker subject to any of the grounds provided thereunder i.e. (a) there should be a failure to comply with any of the conditions of bonds executed under Regulation 8(b)(b); failure to comply with any of the Regulations; and (c) committing any misconduct. There is no dispute that (d) (e) (f) are not relevant here. The Competent Authority who was seized of the matter has felt it proper to pass order after considering the Inquiry Report and the representations made by the Customs Broker which order is clearly passed as he deemed fit . Hence there are no fault with the exercise of the jurisdiction which was clearly the domain of the said Authority. Hence it cannot be entertained that the penalty imposed was not proportionate to the gravity of the offence if at all committed. Hence there are no error. Conclusion - The Inquiry Report is neither fool-proof nor beyond doubts and suspicion and therefore the same does not find a mention anywhere in the impugned order. Further in the impugned order also the Commissioner has not brought out any documentary evidence on record to establish violation to any of the grounds (a) or (b) or (c) prescribed under Regulation 18 which is essential before imposing penalty and hence there are no reason to sustain the said imposition of penalty for which reason the same is deleted. Revenue s Appeal is dismissed.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Legal Framework and Precedents Regulation 18 of the CBLR provides for the revocation of a license or the imposition of a penalty. The imposition of a penalty is contingent upon the failure to comply with the conditions of bonds executed under Regulation 8(b), failure to comply with any of the Regulations, or committing misconduct. The maximum penalty prescribed is 50,000. Regulations 11(a), 11(n), and 17(9) pertain to the obligations of a Customs Broker regarding due diligence and supervision. 2. Court's Interpretation and Reasoning The Tribunal found that the Commissioner of Customs exercised jurisdiction appropriately by imposing a penalty rather than revoking the license. The Tribunal noted that the Commissioner considered the Inquiry Report and representations made by the Customs Broker before deciding. However, the Tribunal found that the Inquiry Report was not foolproof and was susceptible to doubts and suspicions. 3. Key Evidence and Findings The Inquiry Report concluded that violations of Regulations 11(a) and 17(9) were proven, but Regulation 11(d) was not. The Customs Broker argued that the Inquiry Report ignored critical documentary evidence, such as the Factory Stuffing Permission granted by the Customs Department and other documents verifying the exporter's identity. The Tribunal agreed that the Inquiry Report overlooked this evidence, which was crucial to the case. 4. Application of Law to Facts The Tribunal applied the legal framework of Regulation 18, noting that the Commissioner did not establish documentary evidence of violations under the grounds prescribed by Regulation 18. The Tribunal found that the Inquiry Report failed to consider all relevant documents, leading to an unjustified penalty imposition. 5. Treatment of Competing Arguments The Tribunal considered the arguments from both the Revenue and the Customs Broker. The Revenue argued that the penalty was not commensurate with the gravity of the offense, and the OIO lacked findings on certain charges. The Customs Broker contended that the Inquiry Report was flawed and ignored critical evidence. The Tribunal found merit in the Customs Broker's arguments, leading to the dismissal of the Revenue's appeal. 6. Conclusions The Tribunal concluded that the penalty imposed was not justified due to the lack of evidence supporting the alleged violations. The Tribunal found no error in the exercise of jurisdiction by the Commissioner but deemed the penalty unsupported by the Inquiry Report's findings. SIGNIFICANT HOLDINGS The Tribunal held that:
In summary, the Tribunal found that the Inquiry Report and the subsequent penalty were flawed due to the omission of critical evidence, leading to the dismissal of the Revenue's appeal and the allowance of the Customs Broker's cross-appeal. The Tribunal emphasized the necessity of a thorough examination of evidence before imposing penalties under the CBLR.
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