2024 (12) TMI 94 - AT - Customs

Revocation of customs broker license of the appellant - forfeiture of the whole amount of security deposit - levy of penalty - vague SCN - violation of principls of natural justice - HELD THAT - There is substance in the submission advanced by the learned consultant appearing for the appellant that the principles of natural justice have been violated and, therefore, the order that has been impugned should be set aside only for this reason. The show cause notice is very vague. It mentions that the appellant has been found to have contravened the provisions of the 2018 Regulations for the reasons stated in the order passed by the Commissioner confirming the suspension order and thereafter without even stating as to what are the charges against the appellant in connection with the various contraventions of the 2018 Regulations, it calls upon the appellant to submit a reply as to why he should not be held responsible for contravention of regulations 10 (a), 10 (d), 10 (e) and 10 (n) of the 2018 Regulations. As noticed above, the show cause notice fails to differentiate between regulations 17 (1) and 17 (6) of the 2018 Regulations because it calls upon the appellant to submit a reply to the Inquiry Report which could have been submitted by the Inquiry Officer only after an inquiry was undertaken by him - What needs to be noted is that the Inquiry Officer directed the appellant to approach the Policy Section of the department to obtain those documents and the Policy Section of the department informed the appellant that the document that he was seeking have been referred in the show cause notice and the statements could be obtained by him from the Officers who recorded the statement. It is not possible to accept the contention advanced by the learned authorized representative appearing for the department that as all the documents have now been supplied to the learned consultant for the appellant, the Tribunal itself should examine these documents and pass an appropriate order. These documents and the statement were required to be supplied to the customs broker by the inquiry officer so as to enable him to submit a proper response to the show cause notice. This would also enable to the appellant to cross-examine the persons whose statements were recorded. In any view of the matter, it is not for the Tribunal to now carry out the exercise that was required to be undertaken by the Inquiry Officer or the Commissioner dealing with the matter. The impugned order dated 08.11.2021 revoking the customs broker license of the appellant deserves to be set aside and is set aside - Appeal allowed.

Summary

Issues Involved:
1. Validity of the show cause notice issued under the Customs Broker License Regulations, 2018.
2. Compliance with principles of natural justice in the inquiry proceedings.
3. Legitimacy of the revocation of the customs broker license, forfeiture of security deposit, and imposition of penalty.

Issue-wise Detailed Analysis:

1. Validity of the Show Cause Notice:
The show cause notice issued to the appellant was scrutinized for its adherence to the Customs Broker License Regulations, 2018. It was found that the notice was vague and improperly structured, as it prematurely concluded that the appellant had contravened the regulations without conducting a thorough inquiry. The notice failed to clearly state the grounds for revocation of the license and mixed up the procedures under regulation 17 (1) and regulation 17 (6). The notice improperly demanded a reply to the Inquiry Report, which should only be requested after an inquiry is conducted as per regulation 17 (1).

2. Compliance with Principles of Natural Justice:
The inquiry proceedings were criticized for violating the principles of natural justice. The appellant was not provided with essential documents and statements referenced in the show cause notice, despite repeated requests. This denial of access to critical evidence hindered the appellant's ability to prepare an adequate defense. The Inquiry Officer failed to fulfill his duty to supply these documents, directing the appellant to obtain them from other sections of the department. This procedural lapse indicated a failure to conduct a fair inquiry as required by the 2018 Regulations.

3. Legitimacy of the Revocation and Penalties:
The order revoking the customs broker license, forfeiting the security deposit, and imposing a penalty of Rs. 50,000 was challenged on the grounds of procedural impropriety. The Tribunal found that the inquiry process was flawed due to the lack of adherence to natural justice principles and improper issuance of the show cause notice. Consequently, the Tribunal concluded that the impugned order dated 08.11.2021 should be set aside, as the appellant was denied a fair opportunity to defend against the allegations.

Conclusion:
The Tribunal allowed the appeal, setting aside the order that revoked the customs broker license, forfeited the security deposit, and imposed a penalty. The decision underscored the importance of adhering to procedural fairness and ensuring that all relevant documents are provided to the accused party to facilitate a fair defense. The Tribunal emphasized that it was not its role to rectify the procedural deficiencies that should have been addressed during the inquiry process.