2022 (11) TMI 513 - AT - Customs

Scope for invoking regulation 13(d), 13(e) and 13(n) of Customs House Agents Licensing Regulations (CHALR), 2004 - alleged wrongful claim of benefit of notification no. 40/2006-Cus dated 1st May 2006 and no. 98/2009-Cus dated 11th September 2009 - HELD THAT - The impugned entry has claimed the benefit of an exemption notification and it is upto the assessing authority to determine entitlement thereof. It is also on record that the assessing authority preferred to resort to provisional assessment under section 18 of Customs Act, 1962 which was finalized in accordance with the manner prescribed therein sans any proposal to disturb the claim of such benefits. There is nothing on record to indicate that the proper officer has had his hands forced or his mind beguiled to permit such availment in deviation from the procedure laid down in law. In further proceedings initiated under section 28 of Customs Act, 1962 to deny the benefit of exemption and to recover differential duty, the proper officer so empowered had discarded the proposal in the show cause notice and its reversal on appeal of Commissioner of Customs before the first appellate authority is pending before the Tribunal on challenge of the importer. It was within this factual matrix that the outcome of proceedings initiated under Customs House Agents Licensing Regulations, 2004 on the charges levelled against the appellant herein should have been decided. And that is the test to which the impugned order must be subjected. It is no less of an oddity that the finding in the impugned order that the appellant had not discharged the duties of customs broker with utmost speed and efficiency and without any delay is based upon the same alleged misconstruing adopted to allege loss of revenue. The only ground for concluding that there has been loss of revenue is the reversal of the dropping of proceedings under Customs Act, 1962 by order of first appellate authority. Such appellate revision does not obfuscate non-leviability of duty opined by the assessing and adjudicating authorities which impedes a final conclusion, as yet, on that score - There is no allegation, let alone evidence, that the appellant did not demonstrate speed and efficiency or had wantonly delayed anything as far as the impugned goods are concerned - there are no reason to uphold the finding of the respondent-Commissioner that regulation 10(n) of Customs Broker Licencing Regulations, 2018 had been contravened. None of the charges remain. The revocation of licence and other detriments have no foundation on which they can be sustained - Appeal allowed.

Summary

Issues Involved:
1. Invocation of regulation 13(d), 13(e), and 13(n) of Customs House Agents Licensing Regulations (CHALR), 2004.
2. Applicability of Customs Broker Licensing Regulations, 2018.
3. Alleged breach of obligations by the customs broker.
4. Delay in concluding inquiry proceedings.
5. Justifiability of the revocation of the customs broker license and forfeiture of the security deposit.

Issue-wise
Detailed Analysis:

1. Invocation of Regulation 13(d), 13(e), and 13(n) of CHALR, 2004:
The core issue revolves around the invocation of regulation 13(d), 13(e), and 13(n) of CHALR, 2004, due to the alleged breach of obligations by the customs broker in handling the clearance of goods. The customs broker was accused of failing to advise the client to comply with the Customs Act, 1962, and neglecting to bring non-compliance to the notice of the customs authority. The broker was also accused of not exercising due diligence in ascertaining the correctness of information and failing to discharge responsibilities with speed and efficiency. The goods in question were imported under the 'duty free import authorisation (DFIA)' scheme, and the triggering offense was the import of 'natural/alkalized cocoa powder' against authorizations permitting import of 'maida atta/flour, sugar, liquid sugar, etc.'

2. Applicability of Customs Broker Licensing Regulations, 2018:
Despite the proceedings being initiated under CHALR, 2004, the elapsed time and supersession by subsequent regulations necessitated the application of regulation 14 and regulation 18 of Customs Broker Licensing Regulations, 2018. The licensing authority invoked CHALR, 2004, despite the operational status of CBLR, 2013, as the events occurred during the erstwhile regulations. The Tribunal emphasized that references should be made to the prevailing regulations at the time of the order to avoid confusion and demonstrate proper application of mind.

3. Alleged Breach of Obligations by the Customs Broker:
The Tribunal found that the customs broker had not breached the obligations under regulation 10(d), 10(e), and 10(n) of CBLR, 2018. The appellant argued that the goods were correctly declared, and the eligibility for notifications was carefully evaluated by customs authorities. The Tribunal noted that there was no allegation of misleading description, tariff item, or incorrect declaration of value. The assessing authority had resorted to provisional assessment under section 18 of the Customs Act, 1962, which was finalized without disturbing the claim of benefits. The Tribunal concluded that the customs broker had acted in the best interests of the client and had not breached the obligations in any manner.

4. Delay in Concluding Inquiry Proceedings:
The Tribunal acknowledged the inordinate delay in concluding the inquiry proceedings, which was not attributable to the appellant. The inquiry ordered on 12th January 2015 was concluded only on 27th July 2021, followed by the revocation order on 10th December 2021. The Tribunal noted that the licensing authority failed to appreciate the spirit of the judgment of the Hon'ble High Court of Bombay in Principal Commissioner of Customs (General), Mumbai v. Unison Clearing P Ltd, which highlighted the absence of justification for the delay.

5. Justifiability of the Revocation of the Customs Broker License and Forfeiture of the Security Deposit:
The Tribunal found no merit in the conclusion that the customs broker had breached the obligations under regulation 10(d), 10(e), and 10(n) of CBLR, 2018. The Tribunal emphasized that the customs broker is required to act in the best interests of the client and not merely conform to the view taken by the licensing authority in an extra-jurisdictional context. The Tribunal also noted that the customs broker had not demonstrated any lack of speed and efficiency or wanton delay in handling the goods. Consequently, the Tribunal set aside the impugned order, revocation of the license, and other detriments, allowing the appeal.

Conclusion:
The Tribunal concluded that none of the charges against the customs broker remained. The revocation of the license and other detriments had no foundation and were not sustainable. The appeal was allowed, and the impugned order was set aside.