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2024 (1) TMI 644 - AT - CustomsRevocation of Customs Broker License - forfeiture of security interest - levy of penalty - Smuggling of Cigarettes - contraband Cigarettes were found concealed behind the declared goods - violation of provisions of Regulations 10 (b), 10(d), 10(e) and 10(n) of the CBLR, 2018 - enquiry report was not communicated to the appellant - violation of principles of natural justice - HELD THAT - On going through the enquiry report and the impugned order and also various statements recorded from the persons connected including Shri K.V. Prabhakaran, proprietor of the Customs Broker - Though enquiry report has absolved the Customs Broker from all the charges levelled against him, the reasons were not accepted, the enquiry report was not communicated to the appellant, violating the principles of natural justice. The Hon ble High Court of Delhi in the case of KUNAL TRAVELS (CARGO) VERSUS COMMISSIONER OF CUSTOMS (IMPORT GENERAL) NEW CUSTOMS HOUSE, IGI AIRPORT, NEW DELHI 2017 (3) TMI 1494 - DELHI HIGH COURT has held that Customs House Agents are only processing agent of documents for clearance of goods through Customs House. They are not inspectors to weigh genuineness of transaction, and there is no obligation to look into information from exporter/importer. It is onerous to expect CHA to inquire into and verify genuineness of IE Code given by client for each import/export transaction. When such code is mentioned, there is a presumption that appropriate background check in this regard would have been done by Customs authorities. In absence of knowledge that goods mentioned in shipping bills did not reflect truth of consignment sought to be exported, CHA or its proprietor cannot be attributed with mens rea - If goods did not corroborate with declaration in shipping bills, it cannot be deemed to be the mis-declaration by CHA. In the case of M/S. ASHIANA CARGO SERVICES VERSUS COMMISSIONER OF CUSTOMS (I G) 2014 (3) TMI 562 - DELHI HIGH COURT , the Hon ble High Court of Delhi has held that revocation of CHA license is justified only in cases of aggravating factors that allow infraction to be labelled as grave. Though it is not possible to make exhaustive list of such aggravating factors, precedent cases show that revocation of licence has been upheld where there was an element of active facilitation of infraction, i.e., a finding of mens rea, or a gross and flagrant violation of CHA Regulations. The Customs Broker license was suspended vide F.No. R-498/CHA dated 15.07.2019, thus, more than four years passed since the time of suspension. In the case of KS. SAWANT CO. VERSUS COMMISSIONER OF CUSTOMS (GENERAL), MUMBAI 2013 (12) TMI 119 - CESTAT, MUMBAI , it was held that mere signing of documents by a CHA would not prove that the clearances were undertaken by the CHA and punishment for the same could not be revocation of license of the CHA as that would be extreme and harsh. The revocation of Customs Brokers License is too harsh a punishment which is bound to affect the livelihood of the Customs Broker and his employees and by taking into consideration that the Customs Broker License was suspended on 15.07.2019 and thus more than four years time elapsed since, thus, the revocation is set aside - the Customs authority are directed to issue / revive the Customs Brokers License as the Broker was out of Business for more than four years which is enough punishment for the lapses on his part. As the security deposit was confiscated, ordering for its confiscation again cannot be sustained. However, imposition of a penalty of Rs.50,000/- under Regulation 18(1) of CBLR, 2018 cannot be termed as excessive. As such, the penalty of Rs.50,000/- imposed is upheld. Appeal allowed in part.
Issues Involved:
1. Violation of Customs Broker Licensing Regulations (CBLR), 2018. 2. Revocation of Customs Broker License. 3. Imposition of Penalty and Forfeiture of Security Deposit. 4. Compliance with principles of natural justice. Summary: 1. Violation of Customs Broker Licensing Regulations (CBLR), 2018: The appellant, M/s. Souparnika Shipping Services, was found to have violated Regulations 10(b), 10(d), 10(e), and 10(n) of the CBLR, 2018. The Customs Broker failed to exercise due diligence in verifying the correctness of information regarding the importer, deliberately not verifying the antecedents of the GST holder, IEC number, identity of the client, and declared address using reliable, independent, authentic documents, data, or information. 2. Revocation of Customs Broker License: The Principal Commissioner of Customs, Chennai, revoked the Customs Broker License of the appellant under Regulation 17(7) of the CBLR, 2018, due to the appellant's involvement in multiple fraudulent activities, including the smuggling of cigarettes and overvaluation of export goods to obtain illegal IGST refunds. The Tribunal noted that the revocation of the license was too harsh a punishment, considering the appellant's license was suspended for more than four years, which was deemed sufficient punishment for the lapses on his part. 3. Imposition of Penalty and Forfeiture of Security Deposit: A penalty of Rs.50,000 was imposed under Regulation 18(1) of CBLR, 2018, and the Security Deposit of Rs.25,000/- was forfeited. The Tribunal upheld the penalty but set aside the forfeiture of the Security Deposit, stating that the forfeiture was not legally correct or valid since the Security Deposit was already forfeited in a previous order. 4. Compliance with principles of natural justice: The Tribunal emphasized that the appellant was not issued a notice when the enquiry report dated 06.12.2019, which absolved the Customs Broker from all charges, was not accepted by the adjudicating authority. This was deemed a violation of the principles of natural justice. The Tribunal referenced the decision in the case of Accrete Shipping Services, where it was held that the appellant should have been given notice before the revocation of the license, imposition of penalty, or forfeiture of the Security Deposit. Final Orders: The Tribunal set aside the impugned Order-in-Original No. 74163/2020 dated 28.02.2020, revoking the Customs Broker License and forfeiting the Security Deposit. In the second appeal No. 40248/2020, the Tribunal modified the order to set aside the revocation and forfeiture of the Security Deposit but upheld the penalty of Rs.50,000/-. Consequently, appeal No. C/40199/2020 was allowed, and appeal No. C/40248/2020 was partly allowed with consequential reliefs as per the law.
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