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2023 (12) TMI 1154 - AT - CustomsRevocation of Customs Broker License - forfeiture of security deposit - Violation of Advance Authorisation scheme - duty free import which were diverted in the local market illegally instead of using the same imported goods for manufacture of export goods - contravention of Regulations 10(d) and 10(n) of CBLR, 2018 - HELD THAT:- Sufficient and reasonable opportunity was given to the appellants before passing an order, in respect of charges framed against them and there is no infirmity of the impugned order in not following the principles of natural justice in this regard. The appellants have duly filed the ex-bond bills of entry as per the documents given by the importers and they were not aware of the purported diversion of the imported goods. In the instant case, the violations was found by the department only on the basis of specific intelligence developed by DRI, KZU and communicated in their offence report dated 30.06.2021, much later after the clearance of ex-bond warehoused goods, and hence the appellants CB cannot be found fault for the reason that they did not advise their client importer to comply with the provisions of the Act. Further, as the purported diversion of imported goods was not known to the appellants, the non-compliance by the importer of license/Advance Authorisation conditions in respect of imported goods could not have been brought to the notice of the Deputy Commissioner of Customs (DC) or Assistant Commissioner of Customs (AC) by the appellants CB - violation of Regulation 10(d) ibid, as concluded in the impugned order is not sustainable. Violation under Regulation 10(n) - HELD THAT:- Circular No. 9/2010-Customs dated 08.04.2010 clearly explains the provision of CBLR/CHA Regulations which require the Customs Brokers to verify the antecedents, correctness of Import Export Court (IEC) Number, identity of his client and the functioning of his client in the declared address by using reliable, independent, authentic documents, data and information. The said guidelines provide for the list of documents that is required to be verified and that are to be obtained from the client importer/exporter. it is also provided that any two documents of among such specified documents is sufficient for fulfilling the obligation prescribed under Regulation 13(o)/10(n) of CHALR, 2004/CBLR, 2018. In the present case, the appellants CB had obtained the KYC documents and submitted the same to the Customs Department - there are no legal basis for upholding of the alleged violation of Regulation 10(n) ibid by the appellants in the impugned order. In the instant case, the suspension was continued during the inquiry proceedings for about 12 months till the completion of inquiry proceedings and revocation of CB license by the impugned order - the order of revocation of appellant’s CB license has been passed on 23.09.2022 i.e., about 14 months and 23 days from the date of offence report. Though the time lines indicated in the CBLR, 2018 provide for completion of the inquiry proceedings, if calculated from the date of receipt of offence report, would require such an order under Regulation 17(7) ibid to be issued within 270 days, we find that there is no case for inordinate delay as the adjudication was done within a reasonable period of time. The appellants could have been proactive in fulfilling their obligation as Customs Broker for exercising due diligence, particularly when the import documents were obtained from the importers through an intermediary in ensuring that all documents relating to imports are genuine, the KYC documents given by the importer are also genuine and that these are not fake or fabricated. Thus, to this extent the appellants CB are found to have not complied with the requirement of sub-regulation 10(n) and thus imposition of penalty in not being proactive for fulfilling of regulation 10(n) of CBLR, 2013 alone, is appropriate and justifiable. There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revoking the CB license of the appellants; and for forfeiture of entire security deposit, inasmuch as there is no violation of Regulation 10(d) of the CBLR, 2018, and the findings in the impugned order is contrary to the facts on record - in view of the failure of the appellants to have acted in a proactive manner in fulfilment of the obligation under Regulation 10(n) ibid, particularly when they had received the documents from importer through intermediary, it is justifiable to impose a penalty of Rs.10,000/-, which would be reasonable. Appeal allowed in part.
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