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TMI Blog2025 (1) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bombay High Court and Kolkata High Court have held that issuance of notice within stipulated time limit is not mandatory but directory in nature. Since in this case we have already found that department itself was describing the time line provided in CBLR as sacrosanct, hence we rely on the judgments of Hon ble High Court of Delhi and Madras, wherein, it was held that time line prescribed in the CBLR is mandatory and since in the present appeal the SCN has been admittedly issued beyond 90 days, thus, on this count itself, the SCN is not tenable and subsequent revocation of license based on this SCN is also liable to be set aside. Whether, in the given facts of the case, there is any breach of the provisions under regulations 10(d) 10(e) of CBRL, 2018? - HELD THAT:- As can be seen from Regulation 10(d), the customs broker is required to advice his client to comply with the provisions of the Act and in case of non-compliance, he is required to bring the matter to the notice of Deputy Commissioner of Assistant Commissioner of Customs. In this case, it is apparent that the client was the same appellant company but in the capacity of importer. Therefore, there is nothing on record t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne for issuing SCNs under CBLR was affirmed. The necessity for substantial evidence to support charges under regulations 10(d) and 10(e) was emphasized. The impugned order revoking the license of the appellant as well as forfeiture of security deposit and imposition of penalty for violation of 10(d) and 10(e) of CBLR is set aside - the impugned order is not sustainable on account of delay in issuing SCN as well as on account of non-substantiating the grounds for invoking regulations 10(d) 10(e). Appeal allowed. - MR. A.K. JYOTISHI, MEMBER (TECHNICAL) AND MR. ANGAD PRASAD, MEMBER (JUDICIAL) Shri Dr. L. Venkateswara Rao, Advocate for the Appellant. Shri A. Rangadham, AR for the Respondent. ORDER M/s Rich Mark Shipping and Logistics Pvt Ltd., (hereinafter referred to as the Appellant) are in appeal against the OIO dt.16.08.2024 (impugned order) passed by the Principal Commissioner of Customs, Visakhapatnam. The Adjudicating Authority, vide the impugned order, has, inter alia, revoked the Customs Broker License No. 02/2011 issued to the appellant under Regulation 14 of Customs Brokers Licensing Regulations, 2018 (CBLR) for contravening the provisions of Regulation 10(d) 10(e) and als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, it is 21.03.2023 and (iii) on verifying the investigation report along with RUD submitted by the SIIB, a copy of email dt.21.08.2023 was found from the supplier for the above points in favour of the appellant, which, however, was not considered sustainable by department. Therefore, he concluded that Custom Broker had failed to properly advise their client regarding rules and regulations of Customs Act and other allied Acts. Learned Advocate submits that the said averment by the enquiry officer is not correct, wherein, the discrepancies pointed out by the department have already been duly clarified by the supplier of the goods, as under:- a) The dates on the purchase order and the invoice should be viceversa. The date should be read as 06.02.2023 for invoice and the purchase order date should be 03.02.2023. The mishap happened as the remittance is still pending against the said invoice and is the reason why the error in dates has been made by their accounts department. b) That the export containers were fumigated on 12.02.2023 and were kept in storage for 72 hours as per the international fumigation Rules; the containers were checked again by the fumigation department on 16.02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due diligence he has not exercised in imparting any information to his client i.e., the appellant, in the capacity of importer. He has relied on various case laws as under in support of his contention that allegation of non-compliance of regulation 10(e) of CBLR is not sustainable. a) MK Enterprises Vs Pr. CC (Gen.), Mumbai [2024 (1) TMI 98 CESTAT Mumbai] b) Trinity International Forwarders Vs CC (Prev.), Jaipur [2024 (17) CENTAX 314 (Tri-Del)] c) MK Shah Co Vs CC (Airport ACC) [2023 (2) CENTAX 34 (Tri-Cal)] d) Kunal Travels (Cargo) Vs CC (I G), IGI Airport, New Delhi [2017 (3) TMI 1494 Delhi] 6. Learned Advocate further submits that there are catena of judgments wherein it has been held by the Tribunal that the charges under regulation 10(d) 10(e) cannot be made against custom broker since custom broker operates on the basis of documents supplied to him and does not physically see goods before their receipt in the custom area. As custom broker cannot detect overvaluation and mis-classification from the documents supplied by its clients without examination of goods, charge of violation of regulations 10(d) 10(e) of CBLR would not be tenable. 7. Another major argument taken for non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is breach of trust then the consequences have to be followed in terms of CBLR, 2018. They have relied on the following case laws:- a) Sriaanshu Logistics through Proprietor Vs CC (Gen.) [2024 (3) TMI 706 Delhi HC] b) Noble Agency Vs CC, Mumbai [2002 (2) TMI 171 CEGAT, Mumbai] 10. Further, they have also submitted that time lines prescribed under CBLR are not mandatory in nature, as held in catena of judgments and therefore, if there has been any violation on this count, that alone would not be sufficient to negate the findings of the Adjudicating Authority leading to revocation of license. They have relied, inter alia, on the following case laws:- a) Prl CC (Gen.), Mumbai Vs Unison Clearing Pvt Ltd Ors [2018 (4) TMI 1053 Bombay HC] b) Chairman LIC of India Ors Vs A Masilamani [2012 (11) TMI 1083 SC] c) Burleigh International Vs CC (Import of General) [2014 (5) TMI 1105 Delhi HC] d) M/s Bose Enterprise Anr Vs Union of India Ors [2011 (3) TMI 1608 Calcutta HC] e) UOI Vs RS Saini [1991 (3) TMI 391 SC] f) M/s Rubal Logistics Pvt Ltd Vs CC (Gen.) [2019 (6) TMI 1230 CESTAT New Delhi] 11. He also submits that suspension of license of appellant, as custom broker and imposition of penalty o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence despite some overlapping facts and therefore, the decision in respect of one SCN issued under different Act cannot be relied upon for deciding the case in relation to separate proceedings under different Act/Regulation. In fact, that is why these two SCNs and proceedings are to be kept separate without intermixing, as a decision of one cannot be relied upon in another proceeding, though relevant facts may be referred to. It is noted that SCN dt.06.03.2024 issued to the appellant, acting as imported, has also been relied upon in the present SCN. With this distinction, we now proceed to examine the charges leveled against the appellant and the impugned order, whereby the license has been revoked. 15. On going through the SCN, it is obvious that the SCN dt.13.03.2024 has been issued in the backdrop of case made by the department in relation to detection of contravening goods covered under Bill of Entry No.5008577 dt.11.03.2023 and for which a separate SCN dt.06.03.2024 for invoking various section of the Customs Act has been issued. In the backdrop of the same factual matrix, another proceeding was initiated against the appellant under CBLR, 2018. The facts, in brief, are tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appointment, grant of license, period of validity of license, etc. Regulation 10 provides for certain obligations, which the custom broker shall be bound to follow or comply with. These regulations, inter alia, provides for obligation under 10(d) 10(e), which are the allegations in the SCN and the breach of which is the basis for revocation of license. For ease of reference regulations 10(d) 10(e) of CBLR are reproduced below:- 10. Obligations of Customs Broker A Customs Broker shall (d) advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of noncompliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; (e) exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage; 18. Therefore, it can be seen that out of 17 obligations, the department has alleged only two violations against the appellant or in other words, they have not been found to have violated any other obligations vis- -vis the consignment in respect of whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is seen that in terms of a note issued vide F.No.S22/04/2023-SIIB PT.I dt.21.03.2023, a provisional suspension order dt.24.03.2023 was issued to the customs broker in exercise of the powers conferred under regulation 16(1) by suspending the customs broker license with immediate effect, being fully satisfied that the customs broker had, prima facie, not fulfilled their obligation as laid down under regulation 10(d) 10(e) of CBLR, 2018. Therefore, what is obvious is that the suspension order dt.24.03.2023 was issued in exercise of powers under regulation 16(1) relying on the note dt.21.03.2023. Since this suspension order clearly brings out the grounds on which the said suspension was carried out, therefore, it is obvious that for the purpose of section 17(1), the date of receipt of offence report, in the given factual matrix, would be 21.03.2023 and not what the Adjudicating Authority has held in Para 31 to 35 of the impugned order. He has examined the note dt.21.03.2023 and observed that there were no charges framed against the appellant in the said note and therefore, he has taken the investigation report received by the customs broker section from SIIB on 27.02.2024 as the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the appellants have mainly contended that in view of statutory provisions, it is an undisputed fact that SCN has been issued only on 13.03.2024, whereas the offence report was received, vide note dt.21.03.2023. For the reasons discussed, we find in the context that the date of receipt of note is to be treated as date of receipt of offence report and therefore, there is a delay of more than 90 days in issuing SCN. It is also admitted fact that violation of regulations 10(d) and 10(e) was clearly indicated in the first suspension order dt.24.03.2023 and the same has continued even in the suspension order dt.11.04.2023 06.10.2023, SCN and even in the final order. No additional charges or violations have been brought on record. Further, even after receipt of so called investigation report , which is being referred to as Offence report by the Adjudicating Authority to justify meeting the time line, no new charges were leveled. Since the violation of regulations 10(d) 10(e) was, prima facie, found to be invokable in the light of note dt.21.03.2023 itself, which gave details of case against the appellant, as importer, and no further charges or violation could be fastened on them as cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue has been examined by a Larger Bench (Five Member Bench) of the Tribunal in Collector of Central Excise, Chandigarh v. Kashmir Conductors [1997 (96) E.L.T. 257 (Tri.)]. One issue that was addressed by the Larger Bench was what should be done when the Tribunal is faced with conflicting decisions of High Courts. The five member Larger Bench of the Tribunal held that if the jurisdictional High Court has taken a particular view on an interpretation or proposition of law, that view has to be followed, but if the jurisdictional High Court has not expressed any view in regard to the subject matter and there are conflicting views of other High Courts, then the Tribunal will be free to formulate its own view. The relevant paragraphs of the decision of the Larger Bench are reproduced below :- 10 The question as to how the Tribunal should proceed in the face of conflicting decisions of High Courts has been considered in M/s. Atma Steels P. Ltd. and Others v. Collector of Central Excise, Chandigarh reported in 1984 (17) E.L.T. 331 wherein the Larger Bench consisting of five Members held that, in view of its All India jurisdiction and peculiar features, the Tribunal cannot be held bound t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard to constitutionality of a provisions. The Tribunal has held that since the adjudication of vires of a provision of a statute or Notification is outside the jurisdiction of the Tribunal and the jurisdictional High Court i.e., the High Court having jurisdiction over the authority and the assessee, has not struck down the provision or Notification as ultra vires, the Tribunal has to follow the same and the assessee is entitled to take the stand that he is entitled to the benefit of the particular provision or Notification since the jurisdictional High Court has not struck it down, even though some other High Court may have done so. In case the conflict of decisions among High Courts does not relate to vires of any provision or Notification, it has been held that the Tribunal has to proceed in accordance with the decision in Atma Steels (P.) Ltd. in the light of the decision of Supreme Court in the East India Commercial Company case i.e. where the jurisdictional High Court has taken a particular view on interpretation or proposition of law, that view has to be followed in cases within such jurisdiction. If the jurisdictional High Court has not expressed any view in regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to dispute the veracity, thus, there are reasons this should not be accepted by the department unless an independent enquiry by department would have revealed that these documents as fake or submission made therein were incorrect. There is nothing on record to that effect. On the contrary, the department has in fact, accepted that no payment has been made in respect of the goods imported under Bill of Entry No.5008577 dt.11.03.2023. Therefore, the charges leveled against the appellant under Regulation 10(d) are not tenable, in the facts of the case. Moreover, exactly what provisions of the Act or other allied Acts or Rules were not advised by the appellant to his client is also not forthcoming in the charges leveled against the appellant in the SCN. Therefore, unless there is a very clear ground about the charges leveled, the appellant would not get an opportunity to defend his case. For example, if it was regarding wrong classification or wrong valuation, there is nothing on record that he has advised anything to the contrary. The documents where mismatches have been noticed are in relation to the invoice dates, purchase order and phytosanitary certificate, etc., and such inconsis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it could not be presumed that everything which was known to the company, as importer was also known to the appellant, as customs broker, unless detailed evidence is brought on record. The plea by the appellant that after the examination of the goods, it was the customs broker who duly sought clarification from the supplier, vide email and in fact, got certain clarification dt.19.03.2023 20.03.2023 from the supplier indicating, inter alia, that they would like to apologize for the error in the above shipment and also informing that the goods which they had ordered in 2x40 ft. container were still lying in warehouse at Jabel Ali and the shipment, which is received by them was not meant for them and it was mistake of warehouse people for loading wrong cargo in the container. Thus, there is a clear trail of letter and emails showing that they had approached the supplier after noticing the discrepancy found after opening of the sealed container. Department has not disputed that these emails are fake and have only said that the letter dt.21.08.2023 appears to be an afterthought. Therefore, this would support the submission of the appellant that they had not only exercised due diligence b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not find any negligence as such on the part of customs broker, amounting to lack of exercising due diligence and hence did not find merit on imposition of penalty. The appellants have also relied other judgments. What various tribunals have considered that in a given factual matrix, where there is a serious violation by the customs broker i.e., transferring of license to third party, impersonation filing of documents without authority of the exporter/importer, violation of other obligations including KYC, misuse of ID, etc., it was held to be in violations to the provisions under regulations 10(d) 10(e) of CBLR. In this regard, we have already observed that none of these charges have been made or brought on record. Even at the cost of repetition, it is to be pointed out that non-compliance of the provisions under CBLR alone has to be examined for the action under CBLR and evidence without implicating under Customs Act for breach of any explicit provisions under Customs Act cannot be relied upon by the authority to take action under CBLR provisions. If the appellants are also charged under Customs Act for the alleged misdeclared import, he will be dealt with in accordance with the ..... 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