2021 (10) TMI 305 - AT - Customs

Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - misclassification and overvaluation of imported goods to claim higher drawback - appellant has allowed Shri Bhagwan Patil who does not possess proper qualification to deal with customs clearance activities and thus failed to comply with CBRL2, 2013 - HELD THAT - The appellant as a Customs Broker is obliged to recruit persons who have proper qualification and only engage such persons to deal with clearance of goods. The appellant having allowed Shri Bhagawan Patil to use the password for filing documents on the ICEGATE has in our view, indeed violated Regulation 17(9) of CBLR, 2013. The question then is whether such infraction is so grave to impose a punishment of revocation of license and forfeiture of security. This has to be answered by considering the fact that the appellant has already been subject to trial / proceedings for the very same infraction before the Nhava Sheva Commissionerate - it had to be held that the violation, in the background of this case does not attract such harsh punishment of revocation of license or forfeiture of security deposit. The punishment by way of penalty would meet the ends of justice. The appellant has suffered and paid the penalty of ₹ 25,000/- imposed under sec. 158(2)(ii) of Customs Act, 1962 in the earlier proceedings. It is submitted by the learned counsel that such penalty has attained finality as the appellant did not prefer any appeal.. On such score, a further penalty of ₹ 50,000/- imposed under the Customs Broker Regulation is unwarranted. The same requires to be set aside - appeal allowed. As per P.V. Subba Rao, There is no provision for imposing any penalty under Section 158 itself. It only enables the Central Government to make Rules or the Board to make Regulations which may provide for imposition of penalty. The Adjudicating Authority has no power under this Section. Though such penalty was imposed by the adjudicating authority in the earlier proceedings and was also paid by the appellant, it is important to clarify this legal provision - Appeal allowed.

Issues Involved:

1. Revocation of the Customs Broker license.
2. Forfeiture of the security deposit.
3. Imposition of penalty under Regulation 14 of CBLR, 2018.
4. Alleged violations of Regulations under CBLR, 2013.
5. Double jeopardy claim.

Issue-wise Detailed Analysis:

1. Revocation of the Customs Broker License:
The appellant, a Customs Broker, had their license revoked by the adjudicating authority based on allegations of failing to fulfill responsibilities under Regulation 11(d), (e), (n), and 17(9) of CBLR, 2013. The inquiry officer's report found no violations of Regulation 11(d), (e), and (n), but noted a lack of effective supervision in transacting business through an unqualified employee, Shri Bhagwan Patil. The appellant argued that the Power of Attorney holder, a qualified person, supervised the transactions, and the misdeclarations were solely due to the exporter’s actions. The Tribunal concluded that the lack of effective supervision did not justify the harsh punishment of license revocation, especially since the appellant had already been penalized for the same infraction in earlier proceedings.

2. Forfeiture of the Security Deposit:
The adjudicating authority ordered the forfeiture of the appellant’s security deposit of ?25,000/- based on the same grounds that led to the revocation of the license. The Tribunal found that the earlier penalty of ?25,000/- imposed under Section 158(2)(ii) of the Customs Act, 1962, for allowing an unqualified employee to handle customs clearance, had already addressed the infraction. Thus, the forfeiture of the security deposit was deemed unwarranted.

3. Imposition of Penalty under Regulation 14 of CBLR, 2018:
The adjudicating authority imposed a penalty of ?50,000/- under Regulation 14 of CBLR, 2018, read with Regulation 18 of CBLR, 2013. The appellant contended that this amounted to double jeopardy, as they had already paid a penalty of ?25,000/- for the same violation. The Tribunal agreed, noting that the earlier proceedings had penalized the appellant for the same infraction, and imposing an additional penalty was unjustified.

4. Alleged Violations of Regulations under CBLR, 2013:
The allegations included failing to fulfill responsibilities under Regulation 11(d), (e), (n), and 17(9) of CBLR, 2013. The inquiry officer found no violations of Regulation 11(d), (e), and (n), but noted a lack of effective supervision under Regulation 17(9). The appellant argued that the employee acted under the instructions of the Power of Attorney holder, who was qualified. The Tribunal found that the alleged lack of supervision did not result in any significant non-fulfillment of obligations under CBLR, 2013, and thus did not warrant severe penalties.

5. Double Jeopardy Claim:
The appellant argued that the present Show Cause Notice (SCN) was based on the same facts and allegations as an earlier SCN issued by the Nhava Sheva Commissionerate, which had already resulted in a penalty. The Tribunal examined the principle of double jeopardy, enshrined in Article 20(2) of the Constitution of India, which prohibits prosecuting and punishing a person for the same offense more than once. The Tribunal noted that while the earlier SCN was issued under Section 124 of the Customs Act, 1962, for violations of CBLR, 2013, the present SCN was issued under Section 20(1) of CBLR, 2013. Despite the different legal bases, the Tribunal held that penalizing the appellant again for the same facts and allegations was unjust and set aside the additional penalty.

Conclusion:
The Tribunal concluded that the impugned order of revocation of the license, forfeiture of the security deposit, and imposition of an additional penalty could not be sustained. The appeal was allowed, and the impugned order was set aside, providing consequential relief to the appellant.

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