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2022 (6) TMI 784 - AT - CustomsRevocation of Customs Broker License - Forfeiture of security deposit - levy of penalty - act of substitution and smuggling of red sanders - allegation of lack of negligence on the part of appellant in not undertaking the proper verification of the exporter/ IEC Holder - HELD THAT:- The entire case made against the appellant is on account of their failure not to properly and completely verify the antecedents of the person/ client entrusting them with the paper and consignment for export. In view of the judgements relied upon by the Appellant and those referred in the inquiry report there was no need for physical visit to the premises and meeting with the client before taking the job. Principal Commissioner has relied upon the statement recorded during the course of investigation. These statements have not been corroborated. Even the statutory documents produced by the appellant for undertaking the KYC of the exporter (IEC Holder) have not been verified and found to fake etc. It is not even the case of revenue that these documents were not taken by the Appellant for undertaking KYC. The only allegation that has been made the ground for not complying/ discharging the obligations casted under CBLR, 2018 is that CB had not physically met and physically verified their premises. The CB was require to do the KYC on the basis of the documents prescribed. Undisputedly such KYC was done by the appellant, only what was not done was physical meeting and physical verification of the premises. There are no merits in any of the findings recorded by the Principal Commissioner, in respect of any of the charges framed against the appellant under regulation 10 (a), (d) & (n), 13 (12) whereas the findings recorded by the enquiry officer are more justifiable and logical. It is also not the case of revenue that appellant was in any way involved in abetting or colluding with the alleged fraudsters in the substitution of export consignments after their clearance from CFS. If the fact of not involvement with the act of smuggling the Red Sanders, is to be held in favour of the Appellants than in our view the punishments inflicted by the impugned order on the appellants are excessive and not proportionate to the violations committed if any. This is also to be viewed in light of the fact that the inquiry officer has in his report held that none of the alleged violations can be established against the appellant during the inquiry proceedings - just for failure to physically visit and verify the antecedents of the client, revocation of the licence of the CB broker has been held to be not justified. Thus, the enquiry officer has more reasonably concluded in the matter, and the appellant CB can at the most be held guilty for contravention of the Regulation 10 (n). Various High Courts have held that punishment for the offences should be proportionate to the gravity of offence. In the present we do not find that appellant was in any way responsible for any act of misconduct but is vicariously responsible for the acts of their employees, hence the punishment of revocation of licence is much harsh and disproportionate to the offences committed. The impugned order stands modified to extent of setting aside the order of revocation of the license of CB and forfeiture of the security deposit - the penalty imposed on the CB reduced from Rs 50,000/- to Rs 10,000/- - appeal allowed in part.
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