2019 (3) TMI 1101 - AT - Customs

Renewal of CHA License - Regulation 9(1) of CBLR 2013/2018 - Export of prohibited item - Red sanders - Held that - Actually lapse was noticed on the part of the M/s Vinayak Cargo appellant, it is merely due to the benefit of his long existence as CHA and that the lapse being first that the licence was not revoked. Hence to our opinion these finding cannot be made the basis to extend benefit to the favour of the appellant with reference to present adjudication. The fact remains is that appellant/CHA has once been imposed with penalty, his licence remained suspended in case of export of prohibited red sanders vide consignment of M/s Bhavya Exports. For seeking renewal the performance of the licensee has to be found satisfactory with reference, inter alia, to the obligations specified in the Regulations including, the absence of instances of any complain of misconduct. The time limit of one month from the date of receipt of application is only with respect of any other complaint of misconduct then the violation of the obligations specified in this Regulation. Hence, the argument of the appellant about the order penalising him with the penalty of rupees Twenty Five Thousand is beyond the one month, is not sustainable - The penalty has been imposed under Regulation 11 (a) (d) and (m) for CBLR 2013 same is sufficient to hold the CHA had not satisfactorily observed the obligations of the impugned Regulations the same is a definite basis for the competent authority to arrive at a satisfaction for the application to be entitled for renewal of CHA licence. The above noticed violation on the part of the appellant and the imposed penalty upon him, to our opinion, is sufficient for the Principal Commissioner or Commissioner of Customs, whom the application for renewal of licence was made, to reject the same. Proviso 2 Rule 9 of CBLR 2018 mentions that renewal procedure of the license CHA shall be in accordance with the procedure specified in sub Regulation 2 thereof. Perusal of said sub Regulation 2, makes it clear that there is no specific procedure of the application except that while granting the license the competent authority has to be satisfied about the performance of the CHA during the period of his previous license for properly observing the obligations specified in this Regulations. Thus, irrespective of Regulation 9 being silent about the applicability of Regulation 5 CBLR as far as the conditions to be fulfilled by the applicants for the licensee to act as a Customs Broker in a Custom conditions are concerned. Appeal dismissed - decided against appellant.

Issues Involved:
1. Imposition of penalty on the customs broker.
2. Applicability of CBLR 2013 vs. CBLR 2018.
3. Rejection of renewal application for the customs broker license.
4. Allegation of double jeopardy.
5. Satisfactory performance and absence of misconduct for license renewal.

Issue-wise Detailed Analysis:

1. Imposition of penalty on the customs broker:
The customs broker (appellant) was penalized ?25,000 under Regulation 22 of CBLR 2013 for their involvement in the export of prohibited red sanders by M/s Bhavya Exports. The penalty was imposed despite the adjudicating authority not finding any fraudulent act by the customs broker. The penalty was based on a lapse in duty, although the license revocation was set aside due to the broker's long-standing establishment and it being their first lapse.

2. Applicability of CBLR 2013 vs. CBLR 2018:
The appellant argued that their renewal application should be considered under CBLR 2013, as it was filed before the new regulations (CBLR 2018) came into effect. They cited Section 159 of the Customs Act and Section 6 of the General Clauses Act, emphasizing that the criteria for the repealed legislation should apply. However, the respondent countered that there were no substantial changes between CBLR 2013 and CBLR 2018, making the applicability of either regulation inconsequential. The tribunal observed that the conditions for license renewal remained consistent across both regulations.

3. Rejection of renewal application for the customs broker license:
The appellant's renewal application was rejected based on the penalty imposed under CBLR 2013. The tribunal noted that Regulation 9(2) of CBLR 2013/2018 requires satisfactory performance and absence of misconduct for license renewal. The penalty imposed on the appellant was deemed sufficient grounds for rejecting the renewal application. The tribunal emphasized that the customs broker's previous lapse and penalty were valid reasons for the competent authority to deny the renewal.

4. Allegation of double jeopardy:
The appellant claimed that rejecting the renewal of their license constituted double jeopardy, as their license had already been suspended in 2015. The tribunal dismissed this argument, clarifying that non-renewal of a license and revocation of a license are distinct actions. The tribunal stated that the appellant's penalty and suspension did not grant them an unfettered right to renewal without meeting the mandatory criteria.

5. Satisfactory performance and absence of misconduct for license renewal:
The tribunal highlighted that Regulation 9(1) of CBLR 2013/2018 mandates satisfactory performance and absence of misconduct for license renewal. The appellant's penalty for their lapse in processing the export consignment of prohibited red sanders indicated that they did not satisfactorily observe the obligations of the regulations. This justified the competent authority's decision to reject the renewal application.

Conclusion:
The tribunal upheld the order rejecting the appellant's renewal application, finding no infirmity in the decision. The appeal was dismissed, and the tribunal emphasized that the customs broker's penalty and previous misconduct were valid grounds for denying the renewal. The tribunal also noted an apparent contradiction in findings of two coordinate benches on a similar issue and directed the registry to place the matter for re-hearing before a larger bench if necessary.

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