2023 (10) TMI 898 - AT - Customs

Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - contravention of conditions of re-export bond and instead of re-exporting, they diverted the goods for home consumption - HELD THAT - The Custom Broker has a limited role of filing the bills of entry as per the instructions of importer and the authority of deciding the admissibility of any Exemption Notification was exclusively bestowed on Assistant/ Deputy Commissioner concerned as the Proper Officer under Section 143 of the Customs Act, 1962. In case of any violation of terms and conditions of the Exemption Notification by the importer, invocation of the terms and the conditions of Bond including that of re-export Bond is the exclusive liability of the Departmental Officer and in no way the responsibility can be shifted to the Customers Broker. The appellant as the customs broker at no stretch of imagination can be held liable for violation for the post import conditions of the Exemption Notification against which the consignment was cleared since no such authority has been bestowed on the appellant. Thus, the Appellant cannot be held responsible for the violation, if any, committed by the importer. Attention drawn to Tribunal s decision in the case of MR. G.N.D. CARGO MOVERS VERSUS COMMISSIONER OF CUSTOMS (GENERAL) , NEW DELHI 2017 (4) TMI 1160 - CESTAT NEW DELHI wherein it has been held that the requirement of Customs Broker to exercise due diligence to ascertain the correctness of any information which he imparts to clients with reference to work relating to clearance of cargo would arise only when the Customs Broker is aware of the importer s motive to mis-declare. In that case in each and every case of mis-declaration by the exporter, it can be concluded that Customs Broker did not suitably inform his clients. There has to be some evidence on record to show that either the Customs Broker was aware of such misdeclaration and suppressed the same with a mala fide mind or he has taken efforts to get the goods cleared from the Customs on the basis of wrong declaration made by him or has connived with the importer so as to aid and abet the wrong declaration which is not the case here. The impugned order revoking the Appellant s Custom Broker License and forfeiture of the Security Deposit, amounting to Rs. 75,000 under Regulation 18 of the Customs Brokers Licensing Regulations, 2013, is not sustainable - appeal allowed.

Summary

Issues:
Revocation of Custom Broker License and forfeiture of Security Deposit under Customs Brokers Licensing Regulations.

Summary:
The appeal was filed against the revocation of the Appellant's Custom Broker License and forfeiture of the Security Deposit by the Commissioner of Customs, Kolkata. The case involved the import of "Food Supplements" by M/s. Exim International, Kolkata, under a job-work contract with a Dubai-based company. The importer contravened the terms of the re-export bond by diverting the goods for home consumption instead of re-exporting them. The investigation led to the issuance of a Show Cause Notice, which imposed penalties on both the Appellant and an employee.

The Appellant argued that as a Customs Broker, they had a limited role in filing bills of entry and were not responsible for determining the admissibility of exemption benefits. The authority to decide on exemptions rested with the Deputy Commissioner of Customs, and any violations were the importer's liability, not the Broker's. Citing relevant case law, the Appellant contended that they could not be held accountable for the importer's actions without evidence of wrongdoing on their part.

The Tribunal agreed with the Appellant's arguments, emphasizing that the Customs Broker's responsibility extended to facilitating clearance based on client instructions, not determining exemption eligibility or monitoring post-import conditions. Relying on precedents, the Tribunal concluded that the revocation of the Custom Broker License and forfeiture of the Security Deposit were unwarranted. The impugned order was set aside, and the appeal filed by the Appellant was allowed.

Therefore, the Tribunal ruled in favor of the Appellant, overturning the decision to revoke the Custom Broker License and forfeit the Security Deposit under the Customs Brokers Licensing Regulations.