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2023 (5) TMI 1166 - AT - CustomsRevocation of Customs Broker License - Forfeiture of Security deposit - levy of penalty - imputation and articles of charge, for breach of regulation 10, 11(a), 11(b), 11(d), 11(e), 11(m) and 11(n) of Customs Broker Licensing Regulations, 2013, in connection with the handling of 66 packages of readymade garments for export to Sudan and Nigeria - time-lines prescribed in Customs Brokers Licensing Regulations, 2013 had not been complied with or not - HELD THAT - It would appear that the licensing authority has assumed that the order of the Hon ble High Court of Bombay in THE PRINCIPAL COMMISSIONER OF CUSTOMS (GENERAL) MUMBAI VERSUS UNISON CLEARING PVT. LTD., AND OTHERS 2018 (4) TMI 1053 - BOMBAY HIGH COURT had, in fact, shifted the commencement of time-lines and, thereby, precluded challenge to non-adherence thereof. This is far from a correct appreciation of the decision of the Hon ble High Court. It is also seen that the articles of charges against the appellant can be perceived as being in two spheres with one necessarily following from the other. The primary charge is that the appellant has been in breach of regulation 10 of Customs Broker Licensing Regulations, 2013 requiring the licence to be operated only by the licencee or his authorized person/employee which the inquiry authority, on the basis of certain facts and circumstances as well as statements of two persons said to be employees of M/s Millenium Freight Forwarders, concluded as having been sublet or otherwise transferred. The findings on the other charges, relating to obligations devolving upon customs brokers, held against the appellant herein is inevitable consequence of the finding on the primary charge. Accordingly, it would be appropriate to examine the sustaining of the primary charge and only proceed to look at the submissions in relation to other charges upon such being so. The impugned order has arraigned the appellant on the other charge of not knowing the customer upon the foundation that the licence had been sub-let to the two persons. It is alleged that the customs broker had granted access of the credentials, necessary for undertaking customs clearance, to persons not in their employment. The submission of customs broker, and not controverted in the impugned order, that access was provided only to privately sourced software used for compilation of data to be filed under ICEGATE strikes at the very root of the allegation of illicit grant of access. Hence, the conclusion that the appellant had not obtained authorization from the customer is a conclusion that may not sustain - Breach of regulation 11(d) and 11(e) of Customs Broker Licensing Regulations, 2013 has been alleged on the finding of export processing having been handled by M/s Millenium Freight Forwarders Pvt Ltd but their operation as possible intermediary between the appellant and the exporter is no ground to hold that the processes were carried out through a person other than themselves. Accordingly, the finding against the appellant on these two charges will not sustain. The findings, insofar as the alleged breach of regulation 11(m) of Customs Broker Licensing Regulations, 2013 by not verifying antecedents and correctness of the import-export code (IEC) and other details is concerned, is also based entirely on the role played by M/s Millenium Freight Forwarders Pvt Ltd as sub-let owner of the licence. It has been held that the two employees of the appellant were, in fact, employees of the M/s Millenium Freight Forwarders Pvt Ltd and, in view of the finding on the issue of subletting as well as the employment of the said two persons and in the light of the uncontroverted finding that the two employees have not dealt with the export consignment, it cannot be said that this Regulation had been breached by the appellant. Consequently, none of the charges stand proved against the appellant. It is also taken note of that the impugned order has chosen to examine certain other cases pertaining to allegations levelled against the present appellant which is not in conformity with Customs Broker Licensing Regulations, 2013; for a licensing authority to go beyond the articles of charge framed and to seize upon extraneous incidents, to the extent that the outcome of those proceedings remain unknown, is tantamount to extraneous influencing of the proceedings under Customs Broker Licensing Regulations, 2013 that does not behove appropriate discharge of responsibilities by the licensing authority. There are no reason for the continuation of revocation of the licence or forfeiture of the security deposit - the impugned order set aside - appeal allowed.
Issues Involved:
1. Compliance with 'time-lines' prescribed in Customs Brokers Licensing Regulations, 2013. 2. Allegation of 'sub-letting' the customs broker license. 3. Breach of various regulations under Customs Brokers Licensing Regulations, 2013. Summary: 1. Compliance with 'time-lines' prescribed in Customs Brokers Licensing Regulations, 2013: The appellant argued that the 'time-lines' prescribed in the Customs Brokers Licensing Regulations, 2013, were not adhered to, rendering the actions of the licensing authority invalid. The Hon'ble High Court of Bombay had allowed the suspension to continue subject to the completion of the enquiry within three months from 23rd September 2015. However, the proceedings commenced on 15th April 2014 and concluded with the order dated 17th February 2016, breaching the prescribed 'time-lines'. The Tribunal referenced the decision in Principal Commissioner of Customs (General) v. Unison Clearing Pvt Ltd, emphasizing that adherence to the time schedule is mandatory. The lack of a firm finding of contributory negligence on the part of the customs broker and the non-observance of the mandatory requirement jeopardized the revocation of the license. 2. Allegation of 'sub-letting' the customs broker license: The primary charge against the appellant was the breach of regulation 10, alleging that the license had been 'sub-let' to employees of M/s Millenium Freight Forwarders. The inquiry concluded that the two individuals were employed by M/s Millenium Freight Forwarders and not by the appellant, thus constituting 'sub-letting'. However, the Tribunal found that the business models of customs brokers could vary and mere presence of another entity does not constitute 'sub-letting'. The Tribunal noted that the Regulations do not prohibit part-time employment elsewhere and found insufficient evidence to establish the charge of 'sub-letting'. 3. Breach of various regulations under Customs Brokers Licensing Regulations, 2013: The appellant was also charged with not knowing the customer and failing to discharge duties with utmost speed and efficiency, among other breaches. The Tribunal found that the customs broker had obtained authorization, albeit indirectly, and the allegations of breach of regulations 11(d) and 11(e) did not stand as the employees were authorized by the appellant. Furthermore, the Tribunal referenced the decision in East West Freight Carriers Pvt Ltd v. Commissioner of Customs (General) to support that there was no delay or inefficiency on the part of the appellant. The findings against the appellant on these charges were not sustained. Conclusion: The Tribunal set aside the impugned order, finding that none of the charges against the appellant were proved. The revocation of the license and forfeiture of the security deposit were deemed unwarranted, and the appeal was allowed.
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