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2025 (3) TMI 1200 - AT - CustomsRevocation of Customs Broker License - forfeiture of security deposit - levy of penalty - breach of regulation 10(d) 10(e) and 10(f) of Customs Broker Licensing Regulations 2018 - drawback allegedly claimed in excess of eligibility by several exporters - appellant had failed to brief the exporter on the significance of the declarations owing to which the three regulations were breached. HELD THAT - The alleged conspiracy is mere narration of events and episodes leading to the eventual decision to proceed against the appellant and others under the Customs Broker Licensing Regulations 2018. It was necessary for the licensing authority to depict the elements of this conspiracy in terms of the stipulations in Customs Act 1962 that were breached thereof and attributable in part at least to failure in advising the client to comply with the statutory requirements failure to ascertain information supplied to client owing to which the client had strayed and the failure to communicate the instructions in circulars and public notices. The second of the foundations of the proceedings viz. the circular no. 16/2009-Cus dated 25th May 2009 having been overlooked has no bearing on the first and amenable to being invoked on its own as a factual base for the third charge. There appears to be an implicit assumption in initiation of the proceedings that each and every obligation of customs brokers has been designed to be fulfilled vis- -vis customs authorities and therefore perceivable as inferences that the licencing authority who is neither the customs authority in the connected incident nor the client of the customs broker may choose. That breach of obligations is to be visited with proceedings prescribed in Customs Broker Licensing Regulations 2018 is no ground for such presumption - Some obligations would therefore stem from that owed to clients and hence the determination of time lines with reference to offence report which may originate with client. That perception of cause and effect has to be appreciated and comprehended for proper exercise of authority to punish brokers. From a reading of the charges the imputation of misconduct and the findings in the impugned order none of the facts and circumstances advance the proposition that regulation 10(d) and regulation 10(e) of Customs Broker Licensing Regulations 2018 had been breached. Conclusion - The failure to file the declaration may at best be considered a technical irregularity inasmuch as it was not noticed by the customs authorities either. In any case the drawback claims in the seven shipping bills even if ineligible is not of such magnitude as to warrant imposition of all the penalties and detriments available in the empowerment of the licensing authority. The interest of justice would be met by setting aside the revocation and forfeiture of security deposit under regulation 14 of Customs Broker Licensing Regulations 2018 while upholding the penalty under regulation 18 of Customs Broker Licensing Regulations 2018. Appeal disposed off.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The case revolves around the Customs Broker Licensing Regulations, 2018, particularly regulations 10(d), 10(e), 10(f), 14, and 18. Regulation 10 outlines the obligations of customs brokers, while regulation 14 pertains to the revocation of licenses and forfeiture of security deposits. Regulation 18 deals with penalties for non-compliance. Court's interpretation and reasoning: The Tribunal examined whether the appellant's actions constituted a breach of the specified regulations. The primary focus was on whether the appellant failed to advise the exporter on compliance with statutory provisions and report non-compliance, and whether they were part of a conspiracy to claim ineligible drawback. Key evidence and findings: The Tribunal found that the licensing authority's decision was based on presumptions rather than concrete evidence. The charges of conspiracy and non-compliance with mandatory declarations were not substantiated by evidence. The Tribunal noted that the appellant's role was limited to handling export cargo between the filing of the shipping bill and the grant of the 'let export order'. Application of law to facts: The Tribunal applied the relevant regulations to the facts, noting that the appellant's obligations were limited to the clearance process and did not extend to advising exporters on all statutory compliance issues. The Tribunal found no evidence that the appellant failed to communicate necessary information or that they were involved in any conspiracy. Treatment of competing arguments: The Tribunal considered the arguments from both the appellant and the respondent. The appellant argued that their role was limited and that they were not part of any conspiracy. The respondent argued that the appellant failed to advise the exporter properly, leading to non-compliance. The Tribunal found the appellant's arguments more persuasive due to the lack of evidence supporting the charges. Conclusions: The Tribunal concluded that the charges against the appellant were not proven and that the revocation of the license and forfeiture of the security deposit were not justified. However, it upheld the penalty under regulation 18 as a measure of caution. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: "The facts of the customer exported goods in violation of the customs law indicates that the CB had withheld information to the customer in this regard." Core principles established:
Final determinations on each issue:
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