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TMI Blog2016 (5) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... ns rea involved on the part of the appellant in mis-use of the licence in Mumbai and the decisions pronounced by the Hon'ble Bombay High Court in the case of Shri Venkatesh Shipping Services Pvt. Ltd. Vs. Union of India [2012 (9) TMI 425 - BOMBAY HIGH COURT], the present appellant deserves restoration of his Customs Broker Licence. Forfeiture of security - Held that:- there is nothing on record to arrive at the conclusion that Shri Naresh Makhwana paid ₹ 35,000/- per month to the appellant as consideration for sub-letting his license. There is no document evidencing the sub-let or the payment or promise to pay monthly consideration. The bank account of Shri Naresh Makhwana or the appellant have not been placed on record to show that there was any such monthly payment made by Shri Naresh Makhwana to appellant. Not even a single instance of payment of ₹ 35,000/- is proved. Thus the retracted statement of the appellant is not corroborated by any independent evidence. The department has failed to establish the flow of consideration from Shri Naresh Makhwana to appellant and the sub-let of license. The Hon'ble Member(Technical) has ordered forfeiture of security on the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. It is seen that the Commissioner in the present impugned order has exonerated the appellant from the allegations of violation of provisions of Regulation 11(d), 11(f) and 11(n). However, he revoked the licence of the appellant by concluding that he has sub-letted his licence to the said Shri Naresh Makwana. For better appreciation, we reproduce paragraph 10 of his order. The case before me is not a case of minor infraction of the provisions of CBLR, 2013, but a major one involving subletting of the licence to the third party for monetary consideration, with complete disregard to the rules therein. The very purpose of granting licence authorizing a person to act as customs broker on behalf of importers and exporters is to facilitate import and export of goods at any customs station in accordance with the provisions of Customs Act, 1962 and any law for the time being in force. Though a customs broker is employed by and is representing the importers/exporters, he has been granted licence by the Department and hence can work only to the extent the law permits and within the procedures laid down by the statutes. The Customs Brokers Licensing Regulations, 2013, enjoins certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of Customs or the Assistant Commissioner of Customs, who shall be allowed to work in the customs station as a duly authorized employee on behalf of that firm or company. As such, as per the appellant the said Shri Naresh Makwana was a qualified person in terms of Regulation 15 and was given a G Card by the Revenue itself. 6. As such, the only question to be decided in the present appeal is as to whether the grant of G Card to Shri Naresh Makwana amounts to sub-letting of licence by the present broker so as to hold contravention of Regulation 10 against him. The Revenues stand is that inasmuch as G Card holder was meeting all the expenses of the Mumbai Office of the present appellant, the same would amount to sub-letting of his licence. On the other hand, the assessees stand, right from the beginning has been that their Mumbai office was running into losses and on account of financial difficulties they were not able to run the same. As such, the G card holder was appointed therein who was meeting all the expenses of the Mumbai office and as such, in said terms it cannot be said that the licence was sub-letted. 7. We find favour with the above contention of the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elhi High Court was challenged by the Revenue before the Honble Supreme Court and was dismissed reported as Commission vs. Ashiana Cargo Services: 2015 (320) E.L.T. A175 (S.C.). 9. At this stage, we may deal with the contention of the learned DR appearing for the Revenue for upholding the forfeiture of the security deposit. First of all, having set aside the revocation of the licence, upholding of forfeiture of security deposit would be a self-contradictory order inasmuch as we have not found anything against the customs broker. Secondly, we find that the Commissioner himself in his impugned order has held that there is no reliable evidence to prove involvement of the customs broker in the said smuggling attempt by the importer or assistance by the G Card holder. He has further concluded that Shri Naresh Makwana has willfully collided with the importer to evade payment of duty and this negates the allegation that customs broker contravened the provisions of the CBLR 2013. Accordingly he has dropped the charges leveled against the broker in terms of Regulations 11(d), 11(f) and 11(n) of CBLR 2013. As such, forfeiture of security amount which is nothing but a penal action against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bited by the Commissioner of Customs, Mumbai, who issued the prohibition order thus not allowing him to operate under his licence in Mumbai. 14. From the facts, it is clear that there was no supervision, no control of the appellant on his Mumbai office and the activities of the G Card holder Shri Naresh Makwana, who was projected as an employee of the appellant. From the facts, it has come on record clearly that the appellant was getting a monetary consideration of ₹ 35,000/- per month. However, the learned advocate for the appellant says that it was rather the maintenance of office money which was being paid to the appellant by G Card holder Shri Naresh Makwana. The learned advocate further clarifies that this monetary consideration of ₹ 35,000/- was not being paid but rather used by G Card holder Shri Naresh Makwana in maintenance of the office at Mumbai itself. However, the findings given in para 8 of the impugned order of the Commissioner of Customs, Cochin points out as below: 8. . That Sri Naresh Makwana had been independently operating the Mumbai office of CB and transacting business using the license of CB without any supervision or control of CB, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the jurisdictional area of Mumbai Customs, one cannot judiciously say that the appellant has not violated Regulation 10 of Customs Broker Licensing Regulations, 2013. 16. I find that impugned order dated 29.4.2015 has ordered revocation of the appellants Customs Broker Licence with forfeiture of whole of security deposited. The implication of this is that the appellant is out of his business of running customs broker operations since 29.4.2015. The appellant has thus almost been without business for about over three months. However, it is important to mention that there has not been any mens rea involved on the part of the appellant in the misuse of his licence in Mumbai; this is definitely a diminishing factor in favour of the appellant thus making a case for lesser punishment to the appellant. It is pointed out that punishment imposed by the impugned order has got two facets viz., revocation of Customs Broker Licence and forfeiture of whole of security deposited. Considering facts and circumstances on record and the law prevalent today, now it is to be examined and considered that what punishment here is warranted to meet the ends of justice. 16.1. Here I would like t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also been a punishment for him) and when there was no mens rea involved on the part of the appellant in mis-use of the licence in Mumbai and the decisions pronounced in above cases (though the Hon ble Bombay High Court order in the case of Shri Venkatesh Shipping Services Pvt. Ltd. supra says that it was restricted to the facts of that case and could not be treated as precedent), I am of the considered view that the present appellant deserves restoration of his Customs Broker Licence but the security deposit given to the Customs has to be forfeited and the impugned order can be sustained only to this much extent. When we are ordering here restoration of Customs Broker Licence and forfeiture of security deposit, it is to meet the ends of justice so that the violation of Regulation 10 of Customs Broker Licensing Regulations, (CBLR), 2013 does not go completely unpunished. It has been proved beyond doubt from the facts and findings on record mentioned earlier that the appellant actually violated Regulation 10 of CBLR, 2013 and therefore deserve to be penalized under the provisions of Regulation 18 of CBLR, 2013. After carefully considering the full spectrum of facts, activities and op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f forfeiture penalty can be resolved by the third Member. However, on going through the order sinned by the learned Member (Technical), it is seen that following differences of opinion emerge : - (i) When both the Members have set aside the revocation of the licence, whether the appellant's licence should be restored with immediate effect or the same would become operative from the date of deposit of the fresh security amount of ₹ 75,000/- as ordered by the learned Member (Technical); (ii) Whether the forfeiture of security amount has to be set aside in toto, as held by learned member (judicial) or the same has to be upheld to the exten of ₹ 75,000/-, as ordered by learned Member (Technical); and (iii) Whether the appeal has to be allowed fully as helf by learned Member (Judicial) or the same has to be allowed partially requiring the Customs Broker to deposit an amount of ₹ 75,000/- for restoration of his licence. The above Differences of Opinion are referred to the Honble President for referring the same to Third Member to be appointed by him. Archana Wadhwa Judicial Member Ashok K. Arya Technical Member ORDER PER: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrated, I do not think it necessary to repeat the same. The difference of opinion referred also raises a little doubt and confusion as there is a hand written remark by the learned Technical Member, which reads as under: regarding the difference of opinion X on page 16 not entirely represent the right position, later part I agree 4. From the totality of all the differences of opinion I understand that both members agree that the impugned order to the extent of revocation of license of appellant requires to be set aside. The learned Member(Judicial) has held that the order to forfeit the security also is to be set aside. Whereas, the learned Member(Technical) has held that the security deposit of ₹ 75,000/- made at the time of taking the license has to be forfeited. In the impugned order, the Commissioner has revoked the license and ordered forfeiture of security deposit. The Commissioner observed that appellant has sub let the Customs Broker License to Shri Naresh Makhwana and therefore, ordered revocation of license and forfeiture of security. The learned Judicial Member while considering the issue whether appellant has sub-let his license to Shri Naresh Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to Shri Naresh Makhwana in return of the monetary consideration. The learned Member (Technical) has heavily relied upon the findings made in the impugned order to arrive at the conclusion that the license was sub-let and there is violation of Regulation 10 of Customs Brokers License Regulations, 2013 . 7. Whereas, the Learned Member (Judicial) has observed that the Commissioner has repeatedly referred to Shri Naresh Makhwana as the G-card Holder of the present broker. Such appointment of G.Card holder is permissible in terms of Regulation 15. Whatever is the arrangement between Customs Broker and the G-card Holder is a matter of economics between two of them and cannot be said to be contravention of provisions of Customs Brokers License Regulations, 2013. The learned Member (Judicial) held that appointment of G-card Holder does not tantamount to sub-letting of license. 8. The difference revolves around the question, whether there is any evidence to conclude that there was sub-letting of license or not. The learned Member(Technical) has placed reliance on the findings of the Commissioner in the impugned order which states that there was return of monetary consideration of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is proved. Thus the retracted statement of the appellant is not corroborated by any independent evidence. This has to be read together with the fact that the department issued notice to the appellant for the alleged imported consignment of M/s Abay Enterprises in which the documents were prepared and presented by Shri Naresh Makhwana. It is not disputed that there was a valid authorisation given by appellant to Shri Naresh Makhwana. When department has issued notice to appellant for documents prepared by Shri Naresh Makhwana, it can only mean that department is aware that only an authority has been granted to Shri Makhwana to operate on the license of appellant and that the appellant is responsible for activities in Mumbai office also. So the contention of department that there is no supervision or control by appellant and that the license has been sub-let to another and the whole activities in Mumbai are carried out by Shri Naresh Makhwana is not tenable. 10. The Tribunal in the case of Jai Ambe Logistics Vs Commissioner of Customs(General) NCH, Mumbai 2015(327) ELT 730 (Tri-Mumbai) has held that where no evidence has been adduced by the revenue to show that any consideration h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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