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2021 (7) TMI 378 - AT - CustomsSuspension of Customs Broker License - Regulation 16(2) of Customs Broker Licensing Regulation, 2018 - prohibition on export of fabric used to make masks - N/N. 52 (2015-20) dated 19.3.2020 - Case of Smuggling - HELD THAT - Regulation 10 of CBLR, 2018 places various obligations upon the Customs Broker which, if not complied with, can attract revocation of license and/or imposition of penalty under Regulation 14. This is not an issue to be decided at this stage, that as the matter is in process sub-judice, before the lower authorities. Pending decision on the action under Regulation 14, the Commissioner by the impugned order has suspended the license of the Customs Broker under Regulation 16. It is the case of the appellant that this suspension can be done only when immediate action is required. It is the case of the Revenue that even before suspending the license, the Customs Officers have to investigate the alleged offence and the role, if any, played by the Customs Broker. After completion of the investigation, a Show Cause Notice was issued in the main case of attempted illegal export. In the Show Cause Notice the appellant was also a co-noticee and penalties were proposed to be imposed. This is the point at which there was sufficient material to proceed against the Customs Broker and within a week the license of the Customs Broker was suspended and the suspension was confirmed within another eight days. Therefore, there is absolutely no delay in the matter. It is true that suspension is required only in cases where the Commissioner feels the need for immediate action. But this assessment of need for immediate action should be based on prima facie view about the role played by the Customs Broker. Had the Commissioner suspended the license of the Customs Broker as soon as the alleged illegal export was suspected, such an action would not have been sustainable because the appellant was not the exporter but had only facilitated filing of export documents. There are no infirmity in the impugned order confirming suspension of the license or violation of the provisions of Regulation 16 of the CBLR, 2018 - this is merely an order of suspension of license and the appellant has full opportunity to explain his case and put forth his defence in the proceedings for action under Regulation 14 of CBLR, 2018 which are already in process - the impugned order confirming the suspension of the license of the appellant is fair and reasonable and needs no inference. The appeal is dismissed and the impugned order is upheld.
Issues Involved:
1. Legality of suspension of Customs Broker License under Regulation 16(2) of Customs Broker Licensing Regulation, 2018. 2. Alleged failure of Customs Broker to perform obligations under Regulation 10 of CBLR, 2018. 3. Timeliness and necessity of the suspension order. 4. Compliance with procedural requirements for suspension under Regulation 16 of CBLR, 2018. Issue-wise Detailed Analysis: 1. Legality of Suspension of Customs Broker License under Regulation 16(2) of Customs Broker Licensing Regulation, 2018: The appellant challenged the suspension of their Customs Broker License confirmed by the Commissioner under Regulation 16(2) of the Customs Broker Licensing Regulation, 2018. The suspension was based on the alleged involvement in the attempted illegal export of prohibited goods (fabric for masks) by mis-declaring the nature of the goods and using an Importer Exporter Code (IEC) without the company's knowledge. The tribunal upheld the suspension, stating that the Commissioner acted within the regulatory framework provided by Regulation 16(2) after giving the appellant an opportunity to be heard. 2. Alleged Failure of Customs Broker to Perform Obligations under Regulation 10 of CBLR, 2018: The appellant was accused of failing to meet obligations under Regulation 10 of CBLR, 2018, which includes obtaining proper authorization from clients, exercising due diligence, and verifying the correctness of client information. The investigation revealed that the Customs Broker filed documents for a shipment on behalf of a company unaware of the transaction, indicating a lapse in verifying the authenticity and involvement of the client. The tribunal noted that these obligations are critical for maintaining the integrity of customs operations and found the appellant's actions insufficient in meeting these standards. 3. Timeliness and Necessity of the Suspension Order: The appellant argued that there was an undue delay in issuing the suspension order, which was issued almost six months after the initial information was received by the SIIB. The tribunal, however, found that the delay was justified as the Customs authorities needed time to investigate the matter thoroughly. The Show Cause Notice was issued on 22.12.2020, and the suspension followed within seven days, indicating prompt action once sufficient evidence was gathered. The tribunal concluded that the timing of the suspension was appropriate and necessary to prevent further misuse of the Customs Broker License. 4. Compliance with Procedural Requirements for Suspension under Regulation 16 of CBLR, 2018: The appellant contended that the impugned order did not explicitly state the necessity for immediate action, as required under Regulation 16(1). The tribunal reviewed the order and found that it did mention the necessity for immediate action to prevent further misuse of the license. Regulation 16(2) requires confirmation of the suspension after a hearing, which was duly followed. The tribunal emphasized that the suspension was a precautionary measure pending the outcome of the proceedings under Regulation 14, which are still in process. The tribunal found no procedural lapses in the suspension process and upheld the order. Conclusion: The appeal was dismissed, and the suspension of the Customs Broker License was upheld. The tribunal found the suspension order to be fair, reasonable, and in compliance with the regulatory provisions. The appellant retains the opportunity to present their case in the ongoing proceedings under Regulation 14. The tribunal clarified that this decision does not prejudge the merits of the case, which will be considered separately in the Regulation 14 proceedings.
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