2021 (10) TMI 102 - AT - Customs

Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - misdeclaration of an export consignment - concealment of Ephedrine concealed in polyethylenebag/s - HELD THAT - The consignment of glass bangles were declared for export to Malaysia vide the shipping bill cited above. Examination conducted on receipt of intelligence by department revealed that 105 kg of Ephedrine, a narcotic substance was concealed in the consignment. Keeping apart the omissions and commissions of the exporter in the smuggling, we are concerned with the role of the CHA is to be examined in this case. On perusal of the records, it is found that the appellants have submitted copies of PAN card, GST Registration Certificate, GSTIN ID card etc. obtained from the exporter. It is clear that exporter themselves have given a categorical submission that consignment does not contain any contraband. Under such circumstances, there is a strong case that the appellant Customs Broker had no previous knowledge of the concealment; the role of the appellant-customs broker is to be examined in this background. Agreeably, the customs broker has collected all the necessary documents to satisfy himself about the bona fides of the exporter. The only mistake or negligence on the part of the appellant-customs broker appears to be permitting an ex-employee whose H-Card has expired to file documents on their behalf - this Tribunal and various High Courts have held that revocation of licence entails in loss of livelihood for not only the customs broker but also the families depend on them and recourse to revocation should be taken in extreme circumstances only and not in respect of violations for which there are other provisions to deal with them. The revocation of licence is an extremely harsh step. However, the act of the appellant in allowing an ex-employee and that too without a valid G-Card, is a clear violation of the Customs Brokers Regulations. The Customs Broker needs to be visited with suitable punishment - the revocation is set aside and the penalty imposed and forfeiture of security deposit is upheld. Appeal allowed in part.

Summary

Issues:
Revocation of customs broker's license for contravention of regulations and imposition of penalty.

Analysis:
The judgment in question concerns an appeal against the revocation of a customs broker's license, along with the forfeiture of the security deposit and imposition of a penalty. The appellant's license was revoked based on the contravention of Regulations 10(b), 10(d), and 10(n) of the Customs Brokers Licensing Regulations, 2018. The case stemmed from the discovery of 105 kg of Ephedrine concealed in a consignment of glass bangles declared for export to Malaysia. The appellant argued that they were unaware of the concealment, emphasizing the lack of evidence against them and highlighting their efforts to collect necessary documents to verify the exporter's legitimacy. The appellant contended that revocation of the license was an extreme and harsh punishment, citing relevant case laws to support their position.

Upon examining the facts and submissions, the Tribunal noted that the exporter had explicitly declared that the consignment did not contain any contraband. The Tribunal acknowledged the appellant's negligence in allowing an ex-employee with an expired H-Card to handle documents on their behalf. However, the Tribunal found that this negligence did not warrant the extreme step of license revocation. The Tribunal referenced previous judgments emphasizing that revocation should be reserved for extreme circumstances and proportional to the violation. Drawing parallels to a similar case, the Tribunal concluded that while the appellant's actions warranted punishment, revocation of the license was deemed excessively severe. Consequently, the Tribunal partially allowed the appeal by setting aside the revocation and upholding the penalty and forfeiture of the security deposit to ensure justice was served.

In summary, the judgment delves into the nuances of customs regulations, the responsibilities of customs brokers, and the appropriate penalties for violations. It underscores the importance of proportionality in imposing sanctions, balancing the severity of the offense with the impact on the livelihood of the licensee. The decision sets a precedent for evaluating cases of negligence in customs brokerage and emphasizes the need for just and proportionate disciplinary actions in such matters.