2025 (2) TMI 885 - AT - Customs

Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - certificate had been incorporated in an earlier bill of entry - violation of regulation 10(k) of Customs Brokers Licensing Regulations 2018 - HELD THAT - The grounds on which the licensing authority has held that the customs broker to have breached regulation 10(k) of Customs Brokers Licensing Regulations 2018 does not appear to fit in with the framework of the said regulation which mandate that the enumerated details be maintained in an orderly and itemized manner as specified by the designated officials. There is nothing on record to establish that a method of maintaining upto date records had been prescribed by any of the said authorities. In the absence of such specifics there is no standard against which a breach could be noticed and taken cognizance of. The finding that it was not strain of pandemic which caused this double filing of bill of entry and that the absence of any records in the systems of the customs broker was the consequence of deliberate erasure has not been proved and is only surmise. In either situation there is no finding as to the manner in which regulation 10(k) Customs Brokers Licensing Regulations 2018 has been breached. The revocation of licence and other detriments do not survive - the impugned order is set aside - appeal allowed.

The issues presented and considered in the judgment are as follows:1. Whether M/s SYNC Logistics breached regulation 10(k) of Customs Brokers Licensing Regulations, 2018 by filing two bills of entry for the same set of goods under the India-Japan Comprehensive Economic Partnership Agreement (CEPA).2. Whether the revocation of M/s SYNC Logistics' customs broker license, forfeiture of security deposit, and imposition of a penalty of 50,000 were justified based on the findings of the Principal Commissioner of Customs (General) Mumbai Zone - I.Issue-wise detailed analysis:Issue 1: Breach of regulation 10(k) of Customs Brokers Licensing Regulations, 2018- Relevant legal framework and precedents: Regulation 10(k) requires customs brokers to maintain up-to-date records in an orderly and itemized manner as specified by designated customs officials.- Court's interpretation and reasoning: The licensing authority found that M/s SYNC Logistics breached regulation 10(k) by double filing a bill of entry for the same goods. The authority held that the broker's plea of pandemic-related strain was inadmissible as proper records should have been maintained regardless of circumstances.- Key evidence and findings: The customs broker failed to respond to queries promptly and deleted email correspondence, indicating negligence and disregard for regulatory obligations.- Application of law to facts: The court noted that the grounds for breaching regulation 10(k) were not clearly established, as no specific method of record-keeping had been prescribed by customs officials. The finding of deliberate erasure of records was deemed speculative.- Conclusions: The court found that there was no conclusive evidence of a breach of regulation 10(k) and set aside the revocation of the license and other penalties.Issue 2: Justification for revocation of license and penalties- Relevant legal framework and precedents: The Customs Act, 1962 and Customs Brokers Licensing Regulations, 2018 provide the legal basis for revocation of licenses and imposition of penalties.- Court's interpretation and reasoning: The licensing authority imposed penalties based on the alleged breach of regulation 10(k) by M/s SYNC Logistics. However, the court found that the grounds for the breach were not sufficiently substantiated.- Key evidence and findings: The licensing authority considered the failure to maintain records and the deletion of correspondence as serious infringements, indicating malafide intent by the customs broker.- Application of law to facts: The court determined that without clear evidence of breaching regulation 10(k), the revocation of the license and penalties were not justified.- Conclusions: The court set aside the impugned order to allow the appeal, as the revocation of the license and penalties were deemed unwarranted.Significant holdings:- The court found that the grounds for breaching regulation 10(k) were not adequately established, leading to the setting aside of the revocation of the license and penalties.- The judgment emphasizes the importance of maintaining proper records as required by Customs Brokers Licensing Regulations, 2018, but also highlights the necessity of clear standards for enforcement.Overall, the court's decision in this case revolves around the lack of concrete evidence supporting the alleged breach of regulation 10(k) by M/s SYNC Logistics, leading to the reversal of the revocation of the license and penalties imposed on the customs broker.

← Previous Next →