2023 (10) TMI 249 - AT - Customs

Continuation of suspension of Customs Broker License - appellant were employed by M/s Aditya Exports as a Customs Broker or not - transacting customs broker business or not - role of Custom Broker between SEZ and DTA transactions - Regulation 10 (a) of Customs Brokers Licensing Regulations, 2018 - HELD THAT - The suspension in the instant case has been done by prima facie considering the report of DRI which was implemented as per the appellant with delay at least in two stages. The last statement in the matter was recorded on 28.04.2023, however the report was sent by DRI on 07.07.2023, which is beyond 30 days period prescribed by the Board, and circular 09/2019-Cus dated 8 April, 2010. Further there is delay in immediate suspension order as the same was passed after 15 days of the receipt of the offence report as pointed out and reproduced in para 19 (supra) of the submission. The appreciation of evidence and the capacity in which the employee worked cannot be clearly established either way, till the investigation is still in progress - the Learned Commissioner has acted on prima facie appreciation of the evidence made available to him in the report published by the DRI. The matter regarding time lines as well as Board circular and it is applicability after coming into force of CBLR -2018 were also considered in 2020 (371) ELT 685(Madras) in the matter of M/S. KTR LOGISTICS SOLUTIONS PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS, THE INQUIRY OFFICER/DEPUTY COMMISSIONER OF CUSTOMS 2019 (12) TMI 22 - MADRAS HIGH COURT , in which the Hon ble High Court considered various decisions which were available in favour of the party as well as in favour of department. Regarding whether conditions and time lines prescribed were mandatory or declaratory and it was held that the time limit prescribed at each stage needs to be complied with mandatorily, if not the consequence that would follow is the continuation of the suspension of his license thereby affecting/paralyzing the business activities of the licensee. These consequences, though not mentioned in the Regulations, are however evident apparently on the face of the facts and circumstances. Therefore, it cannot be said that there is no consequence for non adherence to the time limit and therefore, such time limit is only directory and not mandatory. Thus, no contrary decision by Hon ble High Court of Gujarat has been brought to notice by either side on mandatory and declaratory nature of the time lines prescribed as well as to indicate that Board Circular No/. 09/2010-Cus at 08.04.2010 has been withdrawn or superseded, we have no difficulty in observing as deduced from decisions above that time lines are mandatory conditions and need to be observed including those prescribed in the Board Circular of 09/2010-Cus. In the instant case since there is a breach of time lines prescribed by the Board, we therefore hold that in the facts of the case the suspension done is bad in law - revocation of suspension is ordered. Appeal allowed.

Summary

Issues Involved:

1. Suspension of Custom Broker Licence.
2. Jurisdiction and applicability of CBLR, 2018.
3. Timeliness and procedural adherence.
4. Responsibility for employee actions.
5. Impact of Board Circulars and legal precedents.

Summary:

1. Suspension of Custom Broker Licence:
The appellant, a partnership firm holding a Custom Broker Licence, faced immediate suspension of their licence by the Commissioner of Customs, Kandla, based on an Offence Report from the Directorate of Revenue Intelligence (DRI), Ludhiana. The report alleged that the appellant's partner, Shri Pankaj Thakkar, was involved in fraudulent activities related to the clearance of imported black pepper from Kandla Special Economic Zone (KASEZ) into the Domestic Tariff Area (DTA) at a NIL rate of duty by falsely claiming the goods were of Afghan origin.

2. Jurisdiction and Applicability of CBLR, 2018:
The appellant argued that they were never appointed as a Custom Broker by M/s Aditya Exports or their DTA buyers and thus had no role in the transactions under scrutiny. They contended that the suspension order was beyond the scope of Regulation 17(9) of CBLR, 2013, and Regulation 13(12) of CBLR, 2018, as the alleged acts were not in the course of their Custom Broker business. The Tribunal noted that the Commissioner had erred in invoking Regulation 17(9) of CBLR, 2013, which had ceased to exist, and should have considered Regulation 13(12) of CBLR, 2018.

3. Timeliness and Procedural Adherence:
The appellant highlighted that the suspension order was issued after a delay, violating the timelines prescribed by Board Circular No. 9/2010-Cus, dated 8.4.2010. The Tribunal observed that the last statement in the matter was recorded on 28.04.2023, but the report was sent by DRI on 07.07.2023, beyond the 30-day period. The suspension order was passed on 28.07.2023, after the 15-day limit post-receipt of the offence report, making the suspension procedurally flawed.

4. Responsibility for Employee Actions:
The appellant asserted that Shri Pankaj Thakkar's actions were in his private capacity and not as part of the Custom Broker business. The Tribunal noted that the Commissioner had not established that the alleged acts were in the course of the appellant's Custom Broker business. The Tribunal also referenced previous judgments indicating that a Custom Broker cannot be held responsible for the private conduct of their employees.

5. Impact of Board Circulars and Legal Precedents:
The Tribunal emphasized the binding nature of Board Circulars on revenue authorities, citing several judgments that upheld the mandatory nature of timelines prescribed in such circulars. The Tribunal concluded that the breach of these timelines rendered the suspension invalid.

Conclusion:
The Tribunal found that the suspension of the Custom Broker Licence was procedurally flawed due to the breach of mandatory timelines and lack of jurisdiction under the correct regulations. The suspension was revoked, and the appeal was allowed with consequential relief.