2022 (1) TMI 221 - AT - Customs

Levy of penalty on Customs broker - violation of Regulations 10(q) and 13(12) of Customs Brokers Licensing Regulations, 2018 - opportunity of cross-examination not provided - principles of natural justice - HELD THAT - The Inquiry Officer, in his Inquiry Report dated 14.10.2020, has extracted the Show Cause Notice to a large extent and the appellant s reply. What is missing is the requirement under Regulation 17(3) whereby the Inquiry Officer was expected, in the course of inquiry, inter alia, to take such oral evidence as may be relevant. This is because, as contended by the Learned Advocate for the appellant, no opportunity of being heard was ever extended to the appellant by the Inquiry Officer. Further, Regulation 17(4) gives the right of cross-examination to the Customs Broker, but however, in the absence of any notice of hearing, even the appellant stands deprived of the above opportunity - the Inquiry Report has been submitted as an empty formality. Moreover, it appears that the Inquiry Report has not been submitted as mandated under Regulation 17(5). With regard to the specific contravention of Regulation 10(q) ibid., the appellant has given a plausible reply, which is taken note of in the Inquiry Report, but however, the Assistant Commissioner has not denied the bona fides of the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Violation of Customs Brokers Licensing Regulations - Penalty imposed under Regulation 18 read with Regulation 14 for contravention of Regulations 10(q) and 13(12).

Analysis:
The appeal was filed against the Order-in-Original passed by the Principal Commissioner of Customs, Chennai, imposing a penalty on the appellant for violating Customs Brokers Licensing Regulations. The appellant was issued a Show Cause Notice alleging contravention of various provisions. The appellant responded to the notice, but it was noted that the Inquiry Officer did not provide an opportunity for oral evidence as required by Regulation 17(3). Additionally, the appellant was deprived of the right of cross-examination under Regulation 17(4) due to the absence of a notice of hearing. The Tribunal found the Inquiry Report to be a mere formality, not meeting the requirements of Regulation 17(5).

Regarding the specific contravention of Regulation 10(q), the appellant provided a plausible reply, which was acknowledged in the Inquiry Report. However, the Assistant Commissioner did not challenge the appellant's good faith. The Tribunal concluded that the penalty was imposed in a mechanical manner without proper consideration of the appellant's explanations. As a result, the impugned order was set aside, the appeal was allowed, and the penalty was revoked. The decision was pronounced in open court on 17.12.2021.