2023 (8) TMI 360 - AT - Customs

Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - it is alleged that the Agency knew that E-waste i.e., old and used computers, laptops in place of declared items, are being imported by syndicate in violation of extant legal provisions - retraction of statements - cross-verification not allowed - time limitation - HELD THAT - From the perusal of the records, it is found that the appellants have not been engaged as the customs broker in the transaction of transshipment of imported goods from JNCH to ICD, Pune. While the investigation reveals that Shri Kishor Auti, Proprietor of appellants CB firm had introduced or acted as via-media between Shri Bhavik Mehta, the beneficial importer and Shri Sagar Rohidas Bangar, who had handled the actual work of customs formalities. The appellants and/or the proprietor i.e., Shri Kishor Auti of the appellants CB firm was not engaged as customs broker in any of the transaction involving the above violations in the instant case. It is true that as an individual person Shri Kishor Auti, is responsible for the omission and commission which had led to import of e-waste in violation of the Customs Act, 1962 read with relevant Rules and Regulations. We also find that separate show cause proceedings have been initiated for the role played by Shri Kishor Auti in his individual capacity in the above transactions under the Customs Act, 1962 by DRI vide show-cause notice dated 22.09.2020. In view of the factual details, under no circumstances, particularly when the appellants have not been engaged as a customs broker in the aforesaid transaction, there can be a case for taking action against violations of CBLR. Hence, the impugned order does not sustain on this very ground alone. CBEC Circular No. 46/2005-Cus. dated 24.11.2001, automated transshipment module was introduced for permitting transshipment of containerized cargo from one port to ICD/CFS, as per Section 54 of the Customs Act, 1962 and the Rules framed therein. Accordingly, the shipping agents or ICD/CFS operator, who act as an authorized carrier of goods under transshipment is responsible for such goods and are required to safeguard the customs duty, safety of cargo and avoid pilferage during enroute etc. and for this purpose they execute bond and bank guarantee before the customs authorities at gateway port. Hence, these persons are responsible for the transshipment of the cargo, and the appellant custom broker is not responsible for such act under Section 54 of CBLR, 2018. Time Limitation - HELD THAT - As the SCN was issued in this case on 31.03.2022 after having the investigation completed on 22.09.2020, obviously this requirement of CBLR has not been fulfilled in this case. There is no reasonable explanation given for the delay in initiating action under CBLR in the impugned order. Hence on this count also, the impugned order confirming the revocation of the customs broker s license on the basis of the enquiry report against the show cause notice dated 31.03.2022 is not sustainable. There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revoking the license of the appellants, as well as in imposition of penalty against them and for forfeiture of security deposit - appeal allowed.

Summary

Issues Involved:
1. Revocation of Customs Broker License.
2. Imposition of Penalty and Forfeiture of Security Deposit.
3. Compliance with Time Limits under CBLR, 2018.
4. Responsibility and Role of the Appellant in the Alleged Smuggling.

Summary:

1. Revocation of Customs Broker License:
The Commissioner of Customs (General) revoked the Customs Broker (CB) license of M/s Sun Clearing Agency under Regulation 17(7) of the Customs Brokers Licensing Regulations, 2018 (CBLR) due to alleged involvement in smuggling activities. The Directorate of Revenue Intelligence (DRI) had intelligence about the smuggling of E-waste (old and used computers and laptops) from Hong Kong through Dubai to India. The investigation revealed that the CB firm's proprietor, Shri Kishor Auti, knew about the illegal importation of E-waste.

2. Imposition of Penalty and Forfeiture of Security Deposit:
The impugned order also imposed a penalty and forfeited the entire security deposit furnished by the appellants. The Commissioner found that the CB firm had contravened Regulations 10(d), (e), (m), and (n) of CBLR, 2018. However, the Tribunal noted that the appellants were not engaged as customs brokers in the transshipment of the imported goods and that the actual customs formalities were handled by others.

3. Compliance with Time Limits under CBLR, 2018:
The Tribunal found that the show cause notice (SCN) was issued on 31.03.2022, after the investigation was completed on 22.09.2020, which did not meet the 90-day requirement under Regulation 17(1) of CBLR, 2018. The delay in initiating action was not reasonably explained, rendering the impugned order unsustainable on this ground.

4. Responsibility and Role of the Appellant in the Alleged Smuggling:
The Tribunal observed that the appellants did not handle any customs documents or processes involving the importation of goods in this case. The transshipment permit was obtained by another customs broker firm, and the appellants' proprietor, Shri Kishor Auti, merely acted as an intermediary. The Tribunal concluded that there was no legal basis for revoking the CB license, imposing a penalty, or forfeiting the security deposit, as the appellants were not directly involved in the customs brokerage activities related to the alleged smuggling.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal in favor of the appellants, and restored the CB license, nullifying the penalty and forfeiture of the security deposit. The decision emphasized the lack of direct involvement of the appellants in the alleged violations and the failure to adhere to procedural timelines under CBLR, 2018.