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2023 (10) TMI 1177 - AT - CustomsRevocation of Customs Broker License - forfeiture of security deposit - levy of penalty - Failure to bring the rejection report of FSSAI to the knowledge of Customs authorities - non conduct of due diligence and advise the importer properly - Withholding of information or not - delay or inefficiency or non-cooperation to join the investigation by the appellants or not - contravention of Regulations 10(d), (e), (f), (m) and (q) of the CBLR, 2018 - HELD THAT - There is definitely delay in adjudication and that for the import transaction in September 2019, the order of revocation of appellant s customs broker license has been passed on 04.05.2023. Revenue is unable to explain why there was such a long delay in taking action against appellants, when the information about confirmation of penalties for improper import through SIIB investigation was received vide Order dated 31.03.2022. There is no mention of when the offence report was received from Kolkata Customs though it is shown that based on adjudication order of SIIB investigation, prohibition order of Commissioner of Customs, Kolkata, the Mumbai Customs authorities have initiated action under CBLR, 2018. There are no reasons recorded in detail justifying the delay in passing the impugned order by the learned Principal Commissioner. It appears that the reasons having been not quoted and if such reasons exist, the same being not specified and not explained for undue delay cannot be accepted as reasonable grounds. On the basis of various decisions taken by the coordinate benches of the Tribunal and higher judicial forums on the adherence to time limits prescribed under CBLR, 2018, and for the opportunity to be given for cross examination of witness whose statements were relied upon for action to be taken under CBLR, it is found that there is no basis for sustaining the impugned order of the learned Principal Commissioner. Failure to bring the rejection report of FSSAI to the knowledge of Customs authorities - non conduct of due diligence and advise the importer properly - violation of Regulation 10(d) and 10(e) of the Rules - HELD THAT - The records of the case indicate that the Non-compliance certificate/rejection report which was supposed to have generated on 17.03.2020, was communicated to the importer and the appellants by FSSAI vide their letter dated 14.01.2021 only on 14.01.2021 as attachment to the mail. The two e-mail dated 01.01.2021 and 14.01.2021 originating from Deputy Director (Eastern Region) of the FSSAI addressed to appellants and importer have been issued beyond the date of clearance of imported goods by Customs on 20.03.2020, and thus the appellants could not have either advised the importer or brought this to the knowledge of Customs - Further, when the CBEC circular and FSSAI guidelines specifically provide that the Customs authorities should check on the issue of NOC before clearance of imported goods, the responsibility for exercise of due diligence or bringing this to the knowledge of Customs does not lie on the part of the appellants and for the same, responsibility cannot be fastened on the appellants - there is no evidence to indicate any violation of Regulations 10(d) or 10(e) ibid, by the appellants. Withholding of information or not - delay or inefficiency or non-cooperation to join the investigation by the appellants or not - violation of Regulation 10(f), 10(m) and 10(q) ibid - HELD THAT - There is no factual evidence to show that the appellants had withheld any information, or was there any delay or inefficiency or non-cooperation to join the investigation by the appellants. The factual records indicate that the appellants were not aware of the non-conformity certificate issued to the importer and they were informed by the importer about the NOC having been issued based on the follow-up visit of the importer to the office of FSSAI. There is no evidence to show any inefficiency or undue delay on the part of appellants in clearance of the imported goods. In fact, the B/E was filed on 25.09.2019 and it is due to inaction on the part of the Customs, the entire clearance of goods was delayed - the show cause proceedings have not duly observed the principles of natural justice in giving reasonable opportunity to the appellants to properly place their case before the appropriate authorities. Thus, there is no evidence to indicate any violation of Regulations 10(f), 10(m) or 10(q) ibid, by the appellants. It is factually incorrect to state that the appellants had colluded with the importer in clearance of imported goods contrary to the FSSAI rejection certificate. Thus, it is found that the conclusions arrived at by the Principal Commissioner in the impugned order is contrary to the factual position and thus it is not legally 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.
Issues Involved:
1. Revocation of Customs Broker (CB) license. 2. Imposition of penalty and forfeiture of security deposit. 3. Alleged violations of Customs Brokers Licensing Regulations (CBLR), 2018. 4. Timeliness of action under CBLR, 2018. 5. Compliance with principles of natural justice. Summary: 1. Revocation of Customs Broker (CB) license: The appellants, M/s Protocol Logistics Private Limited, Mumbai, filed an appeal against the Order-in-Original dated 04.05.2023, wherein the Principal Commissioner of Customs (General), Mumbai revoked their CB license under Regulation 17(7) of CBLR, 2018. The revocation was based on an offence report from Kolkata Customs, which alleged that the appellants facilitated the clearance of imported 'Betel nuts' despite a Non-conforming Certificate from FSSAI, treating the goods as prohibited. 2. Imposition of penalty and forfeiture of security deposit: The impugned order also imposed a penalty of Rs. 5,00,000/- and forfeited the entire security deposit of the appellants. The appellants contended that they had already been penalized Rs. 5,00,000/- for the same violations in the Order-in-Original dated 31.03.2022 and argued against double jeopardy. 3. Alleged violations of CBLR, 2018: The appellants were charged with contravening Regulations 10(d), (e), (f), (m), and (q) of CBLR, 2018. They argued that they were unaware of the FSSAI rejection report at the time of clearance and that the Customs authorities had cleared the goods after checking the NOC from FSSAI. The Tribunal found no evidence of the appellants' collusion with FSSAI or Customs authorities and concluded that the appellants could not be held responsible for the clearance of goods by Customs. 4. Timeliness of action under CBLR, 2018: The appellants argued that the show cause notice (SCN) issued on 28.12.2022 was beyond the prescribed period of 90 days from the receipt of the offence report on 10.08.2022. The Tribunal noted the delay in initiating action and found no reasonable explanation for it, thus deeming the impugned order unsustainable on this count as well. 5. Compliance with principles of natural justice: The Tribunal observed that the appellants were not given the opportunity to cross-examine key witnesses, including Customs and FSSAI officers, which violated principles of natural justice. The Tribunal found no evidence of violations of Regulations 10(d), (e), (f), (m), and (q) by the appellants and concluded that the impugned order was contrary to the factual position. Conclusion: The Tribunal set aside the impugned order, finding no merit in the revocation of the appellants' CB license, the imposition of penalty, or the forfeiture of the security deposit. The appeal was allowed in favor of the appellants.
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