TMI Blog2022 (6) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... orded by the Principal Commissioner, in respect of any of the charges framed against the appellant under regulation 10 (a), (d), (e), (m) (n), whereas the findings recorded by the enquiry officer are more justifiable and logical. 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 it is not found 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 order of revocation of the license of CB and forfeiture of the security deposit is set aside - penalty is reduced from Rs 50,000/- to Rs 25,000/- - appeal allowed in part. - Customs Appeal No. 86869 of 2021 - FINAL ORDER NO. A/85384/2022 - Dated:- 1-3-2022 - MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) AND MR. P. DINESHA, MEMBER (JUDICIAL) Shri Aditya Tripathi, Advocate, for the Appellant Shri Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2018. 2.4 Show Cause Notice dated 29.09.2020, was issued to the CB calling them upon to show cause, as to why the licence bearing no. 11/1830 issued to them should not be revoked and security deposited should not be forfeited and/or penalty should not be imposed upon them under Regulation 14 read with 17 of the CBLR, 2018, for their failure to comply with the provisions of the Regulations 10(a), 10(d), 10(e), 10(m) and 10(n) of CBLR, 2018. 2.5 As per the Inquiry report dated 01.04.2021 the charges framed against CB for the violation of Regulation 10(a), 10 (d), 10(e), 10(m) 10(n) of the CBLR, 2018 were held as 'not proved' except for charge under Regulation 10(n) in the Inquiry Report. 2.6 Principal Commissioner vide his Disagreement Memo dated 24.05.2021 disagreed with the inquiry report and called upon the CB to make submissions before him in the matter. 2.7 The show cause notice has been adjudicated as per the impugned order referred in para 1, above. Aggrieved appellant have preferred this appeal. 3.1 We have heard Shri Aditya Tripathi, Advocate for the appellant and Shri Manoj Das, Assistant Commissioner Authorized Representative for the revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ERWISE DECORATED LAYERS OF PLASTICS* to M/s. Hakeemsons. General Trading LLC, Post Box No: 45762, Dubai, United Arab Emirates by classifying the same under Customs Tariff Heading No. 4814 20 00. Sl No Shipping Bill Invoice Number Date C F Value of goods (In USD) DECLARED F.O.B. (In INR) IGST involved (In INR) Number Date 1 4336032 22- VS/EXP/ 2019- 2,05,200/- 1,42,43,677.50 25,67,052/- 05- 20/ 001 dated 19 03-05-19 2 4336091 22- VS/EXP/ 2019- 2,05,200/- 1,42,43,677.50 25,67,052/= ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods (In USD) DECLARED F.O.B. (In INR) IGST involved (In INR) Number Date 1 4339935 22- 05- 19 JE/EXP/ 2019- 20/ 001 dated 03-05-19 2,05,200/- 1,42,43,677.50 25,67,052/- 2 434006 22- 05- 19 JE/EXP/ 2019- 20/ 002 dated 03-05-19 2,05,200/- 1,42,43,677.50 25,67,052/= 3 4395073 24- 05- 19 JE/EXP/ 2019- 20/ 003 dated 03-05-19 2,05,200/- 1,42,43,677.50 25,67,052/- 4 4395193 24- 05- 19 JE/EXP/ 2019- 20/ 004 dated 03-05-19 2,05,200/- 1,42,43,677.50 25,67,052/= ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant to be exported, from their suppliers at a price which was higher than the price at which they were exporting the goods i.e. they were exporting the goods @ USD 2 Per Square Feet i.e. Rs. 139/- per Square feet whereas their purchase price was Rs. 165/- per square feet from M/s. Sunlight Export and Rs. 134/- per square feet from M/s. ESS TEE Sales and M/s. Hargun Exports. It was also a fact that on that date the suppliers had not filed any GST returns. Thus it leads to suspicion that no prudent businessmen would sell the goods by incurring losses. 10. Due to above abnormalities, vigil was kept and it was noticed that one Shri Iqbal Satarbhai Shekda was involved in clearance of the goods covered under Shipping Bills, appearing at Para No. 2 3, filed by M/s. Vicky Sales and M/s. Jagdambe Exports. 11.1 Whereas, it appears that statement of Shri Iqbal Satarbhat Shekda, H card holder of M/s. Premji Kanji Masani Private Limited, was recorded on 30-05-2019 (Sl. No. 88 of Annexure A of Show. Cause Notice), under Section 108 of the Customs Act, 1962, before the Superintendent of Customs House, Gujarat Pipavav Port Limited, Pipavay wherein he inter-alia stated that his fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obile numbers were 9769998740 and 9768638575. 12.2 Shri Yogesh Kanubhai Goradia upon being asked further stated that he worked as forwarder from Rajula, Mundra and Mumbai and have worked with (1) M/s. Rishad Shipping Clearing Agency Private Limited at Mundra Port, (2) M/s. Premji Kanji Masani Private Limited and M/s. SSS Sai Forwarders Private Limited at Pipavav Port and (3) M/s. CBN Impex Private Limited and M/8. Sainath Clearing Agency, owned by his cousin Shri Dinesh Mehta, at JNPT, Mumbai; that he work on behalf of the various importers / exporters and as a link between the importers/ exporters and the CHA; that he also receives work from other forwarders; that he receives payment/commission from the importer/exporter/forwarder for the services provided which is either received in cash as well as by account transfer; that the payment to CHA is done by him in cash as well as by account transfer. 12.8 Upon being asked Shri Yogesh Kanubhai Goradia stated that Let Export Order has been granted for those shipping bills filed by M/s. Rishad Shipping Clearing Agency Private Limited85M/s. Premji Kanji Masani Private Limited however no Let Export Orders have been passed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ED ON THE FACE SIDE, WITH A GRAINED EMBOSSED, COLOURED, DESIGN, PRINTED OR OTHERWISE DECORATED LAYERS OF PLASTICS, lying at Contrans Logistics Private Limited's CFS, to be exported by M/s. Vicky Sales and M/s. Jagdambe Exports under different 8 Shipping Bills, tabulated at Para 2 3 supra, was carried out in presence of two independent panchas along with Shri Chirag Manatar, Executive of M/s. SSS Sai Forwarders Private Limited and Shri Yogesh Kanubhai Goradia, Proprietor of M/s. Jay Gigev Clearing Agency, Mumbai; that during the inspection and after looking to quality and condition of the goods it appeared that the said goods appeared to be overvalued in contravention of the provisions of the Customs Act, 1962 therefore the entire lot of good packed in 720 cartons, weighing 14,400 kilogram net, having declared F.O.B. value of Rs. 11,39,49,416/- seized under provision of Section 110 ibid and were handed over to custodian i.e. M/s Contrans Logistics Private Limited for safe custody. The above proceedings were recorded' under panchnama dated 31- 05-2019(Sl. No. 93 of Annexure A of Show Cause Notice). 29.1 Statement of Shri Kanhaiya Agarwal, Director of M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y impart to their clients with reference to work related to clearance of the subject export cargo as they were under the impression that further verification is not warranted as the exporters have made export through Pipavav port earlier as per the shipping bill provided. 29.6 Shri Kanhaiya Agarwal, upon being asked, stated that generally they charge agency charges between Rs. 1,500/- to Rs. 2,500/ Stuffing charges Rs. 500/-, Shipping Bill Extra Rs. 300/- to Rs. 500/-, CFS charges and EDI Charges are as actual; that they have sent a , quotation of Rs. 2,000/- agency charges and S/B charges of Rs. 300/- to M/s. Vicky Sales and M/s. Jagdambe Exports through Shri Yogesh Kanubhai Goradia; that he produced the invoices raised by his firm to other exporters which shows that they have not charged anything extra.(Sl. No. 156 of Annexure A of Show Cause Notice). 58.1 Now, therefore, in view of Section 124 of the Customs Act, 1962 read with Clause 6 of Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020, M/s. Vicky Sales, New Delhi, are hereby called upon to show cause to the Additional Commissioner of Customs (Preventive), Jamnagar having his office at Sar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause to the Additional Commissioner of Customs (Preventive), Jamnagar having his office at Sarda House, Opp. Panchwati, Bedi Bunder Road, Jamnagar 361 008, within 30 days from the date of receipt of this Show Cause Notice, as to why: (a) goods having declared F.O.B. value of Rs. 7,13,07,000/- involving illegal refund of Integrated Goods Services Tax amounting to Rs. 1,28,35,260)- should not be held liable for confiscation under Section 113(d) of the Customs Act, 1962; and (b) penalty under Section 114 of the Customs Act, 1962 should not be imposed upon them for rendering the above goods liable for confiscation; and : 58.4. Now, therefore, in view of Section 124 of the Customs Act, 1962 read with Clause 6 of Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020, Shri Sandeep Dawar, is hereby called upon to show cause to the Additional Commissioner of Customs (Preventive), Jamnagar having his office at Sarda House, Opp. Panchwati, Bedi Bunder Road, Jamnagar 361 008, within 30 days from the date of receipt of this Show Cause Notice, as to why: (a) penalty under Section 114 of the Customs Act, 1962 should not be imposed upon him; and (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g his office at Sarda House, Opp. Panchwati, Bedi Bunder Road, Jamnagar 361 008, within 30 days from the date of receipt of this Show Cause Notice, as to why penalty under Section 114 and/or 114AA of Customs Act, 1962 should not be imposed upon them. 59 The Noticees are hereby directed to produce all evidences upon which they intend to rely in support of their defence at the time of showing cause. They are further directed to indicate in their written reply as to whether they wish to be heard through virtual mode as stipulate in Central Board of Indirect Taxes Customs, New Delhi's instructions dated 27-04-2020 issued from F. No. 390/Misc/3/2019-JC or in person .. 4.4 After making investigations the show cause notice was issued to the CB, proposing for revocation of his license pending the enquiry to be made in the matter by the enquiry officer. 4.5 The report of enquiry officer on the each of the charges and contravention leveled against the appellant is reproduced below: ARTICLES OF CHARGE AND FINDINGS OF INQUIRY 15. Regulation 10(a) of CBLR, 2018 A Customs Broker shall obtain an authorization from each of the companies, firms or individuals by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by CB during P.H. I have gone through the Incident report dt. 20-6-19 with statement of CB dt. 19-6-19 and SCN dated 24.06.2020 issued by the Additional Commissioner of Customs (Preventive),Jamnagar after completion of investigation. 15.4. The CB obtained authorization from exporter through Mr. Yogesh Goradia. It is also important to mention that throughout the investigation both exporters have not denied the authorization and didn't indicated that they have not authorized the CB. Therefore charges that CB contravened the provisions of Regulation 10(a) are not proved, 16. Regulation 10(d) of CBLR, 2018 The Customs Broker shall advise his client to comply with the provisions of the Act, other allied Ads 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 16.1. As per para 9.2 of impugned Show Cause Notice the CB appears to have contravened the provisions of Regulation 10(d) or CBLR 2018 as they have failed to advise their clients exporters to comply with the provisions of the Customs Act, 1962 and CGST Act, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the provision, of Regulation 10(d) are not proved. 17. Regulation 10(e) of CBLR, 2018 the Customs Broker shall 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; 17.1. As per para 9.3 of impugned Show Cause Notice, CB appears to have contravened the provisions of Regulation 10(e) of CBLR.2018 as they failed to exercise due diligence to ascertain the correctness of the information that they were imparting to their client. As admitted by the CB is his statement dated 19.06.2019 that he was in impression that further verification not warranted as the exporters have made export through Pipavav Port earlier as per the shipping Bills provided which led to the fraudulent export of goods for IGST availment The CB appears to not have worked diligently in the clearance of the said shipping bills for export consignments which were found mis-declared Submission of CB during P.11. 17.2 'The fact of overvaluation of export goods and illegal claim of IGST, came to the knowledge of the CB during the course of investigation only and the CB full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h written submissions during PH and Incident report dt. 20-6-19, the development of events should be as follows. On 21-5-19 CB asked for KYC documents and prepared checklist On 21-5-19 exporter approved checklist. On 22-5-19 CB asked for supporting documents to exporter. On 22-5-19 24-05-19 shipping bills were filed. On 25-5-19 DC, Customs, Pipavav called for documents supporting the valuation On 31-5-19 Goods examined and seized in presence of CB and representative of exporter, I don't see any delay on part of CB here. Therefore charges that CB contravened the provisions of Regulation 101m) are not proved. 19. Regulation 10(11) of CBLR, 2018 the Customs Broker shall very correctness of importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN) identity of his client functioning of his client at the declared address using reliable, independent, authentic documents, data or information; 19.1. As per Para 9,5 of the impugned Show Cause Notice the CB failed to verify the identity, antecedent and address etc of their client as they did not verily the address of their exporter. The same was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the exporters' viz. M/s. Vicky Sales and M/s. Jagdambe Exports. Findings of inquiry 19.3. I have gone through the incident report al. 20-6-19 with statement of CB dt. 19-6-19. On question no 3,4 7 the CB agreed that they had not done physical verification of exporter's address, that they had not talked to exporter in person, that they have not verified authenticity of authorization Letter received through Mr. Yogesh Goradia. I have also gone through trail and WhatsApp communication between CB and Mr. Goradia before filing of shipping bills wherein CB was requesting for KYC documents. During PH dt. 23-3-71, Mr. Dhakan, G-card holder, stated that in response to these emails, their regional office received KYC documents by hand before filing of shipping bills. 19.4. IEC and GSTIN are correct. However, in terms of verifying functioning of exporters at the declared address, I find that CB failed to check Authenticity of authorization letter and CB did not communicate to exporters directly. To that extent I find that charges that CB contravened the provisions of Regulation 10[n) are proved. 4.6 Principal Commissioner did not agree with the enquiry report and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exporters for export related activity. The Customs documents were received from Shri Yogesh Goradia and not from M/s Vicky Sales and M/s Jagdambe Export the exporting firm. Despite enough experience in Customs Broking, it is strange that this did not arouse suspicion in mind of CB especially when CB was not in touch with their clients by any means. Thus it is evident that Customs Broker was deliberately not dealing with the exporter and he obtained authorization without proper verification of KYC documents in order to facilitate fraud being perpetrated. I find that the whole purpose of obtaining authorization has been defeated i.e. to ensure that the CB has interacted with the genuine exporter/ importer and is aware of the goods to be cleared on behalf of the client. The CB has filed the Shipping Bills without proper verification of the authorization letter from the exporter as mandated under Regulation 10(a) of the CBLR, 2018. I hold that the CB failed to fulfil the obligation of Regulation 10(a) of CBLR, 2018. 7.2 I find that Shri Kanhaiya Agarwal (director of CB firm M/s SSS Sai Forwarders) in his statement recorded on 19.06:2019 under Section 108 of the Customs Act, 1962 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gesh Goradia, who had no authorisation or any legal standing to hand over documents on behalf of their client. There is no evidence of the CB making any effort to discourage such exports. Thus, it is clear that the CB did not impart any information at all to their client and did nothing to discourage him from being fraud exporter. 8.2 Thus, it is clear that the CB has not worked diligently in the clearance of the said shipping bills for export consignments which were found mis-declared. The CB had clearly accepted the documents from a person who was not the employee of the exporter and filed the S/B. Hence, it is evident that the Customs Broker by their acts of deliberate commission and omission had facilitated the exporters. to avail CGST/SGST credit on inflated invoices. It is clearly evident that the Customs Broker processed the documents for filing the Shipping Bills without exercising due diligence to ascertain the correctness of the information regarding clearance formalities needed to be fulfilled. They also suppressed the fact of difference in signatures on authorization and KYC from Customs authorities and that they were dealing with a forwarder in place of exporter. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated. I find that the total IGST involved due to the alleged fraudulent over invoicing is Rs 2,05,36,416/-. The exporters fraudulently availed this type of credit of IGST with intention to get refund from overvalued exports. Thus considering the high amount of revenue involved, the CB was required to be more vigilant in verification of KYC norms at the time of taking up the consignment for Customs clearance, which had not been done in this case. In this regard, I find it strange that the CB who has enough experience in matters of dealing with the importers and exporters, conveniently ignored the fact that the Shipping bills were similar and of same value and having noticed that the signatures made on authorization letter, export invoice, Bank verification certificate and Bond in respect of exporters differed with each other had not taken this issue as a serious matter as all the documents were given by Shri Yogesh Goradia through courier. I note that CB only contacted Shri Yogesh Goradia for their doubt and never tried to approach exporters by any means. Thus, it is safely assumed that this knowledge would force the CB to go in deep into the issue regarding the verification of KYC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 [(c) the applicant has undergone Aadhaar authentication in the manner provided in rule 10B;] (2) The details of the 5[relevant export invoices in respect of export of goods] contained in FORM GSTR-1 shall be transmitted electronically by the common portal to the system designated by the Customs and the said system shall electronically transmit to the common portal, a confirmation that the goods covered by the said invoices have been exported out of India. 6 [Provided that where the date for furnishing the details of outward supplies in FORM GSTR-1 for a tax period has been extended in exercise of the powers conferred under section 37 of the Act, the supplier shall furnish the information relating to exports as specified in Table 6A of FORM GSTR-1 after the return in FORM GSTR-3B has been furnished and the same shall be transmitted electronically by the common portal to the system designated by the Customs: Provided further that the information in Table 6A furnished under the first proviso shall be auto-drafted in FORM GSTR- 1 for the said tax period.] (3) Upon the receipt of the information regarding the furnishing of a valid return in FORM GSTR-3 7[o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of rule 89] 12 [(10) The persons claiming refund of integrated tax paid on exports of goods or services should not have - (a) received supplies on which the benefit of the Government of India, Ministry of Finance notification No. 48/2017-Central Tax, dated the 18th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1305 (E), dated the 18th October, 2017 except so far it relates to receipt of capital goods by such person against Export Promotion Capital Goods Scheme or notification No. 40/2017-Central Tax (Rate), dated the 23rd October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1320 (E), dated the 23rd October, 2017 or notification No. 41/2017-Integrated Tax (Rate), dated the 23rd October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1321 (E), dated the 23rd October, 2017 has been availed; or (b) availed the benefit under notification No. 78/2017- Customs, dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er goes a step further where they proceed against the exporters and the CB s for the ITC credit taken by the exporter on the basis of the basis of the supplies received by them. We have serious doubts about the actions proposed vis a vis the provisions of Rule 96 reproduced above. Customs authority can proceed for overvaluation of the goods as per the provisions of Custom Act, 1962, but can they question the ITC credit availed by the exporter. Be that as it may be, here the licence of CB has been revoked for the reason that the exporters have fraudulently availed excess ITC, by receiving the goods at inflated prices from their supplier. 4.9 The role of CB is limited to facilitation of the imports and exports by filing the documents after due verification. Is the role beyond that envisaged in terms of any regulation under CBLR. The fraudulent credit if availed is a matter for investigation by the concerned Central/ State Tax Authorities. How can a CB be responsible for not advising the client, exporter in that respect?. How in case of exports when the exporter has been registered on the GSTN, after due verification and diligence by the GST authorities, the availability of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on alleged against the importer is non-declaration of retail sale price on auto parts imported by them for assessment under Section 4A of the Central Excise Act, 1944 for CVD. We find that the bill of entry was filed by the appellant after the goods were detained by the officers of DRI. The said bill of entry was filed on first check basis for verification of the goods before assessment. In such a situation, we find that no mala fide or intentional violation of any provisions of the Customs Act can be alleged on the part of the Customs broker. Regarding KYC norms and obligations under Regulation 11, we find that case as made out in the original order is neither convincing nor sustainable. 9. We find that the impugned order did not make out a sustainable case for revocation of licence. In the case of Setwin Shipping Agency v. CC (General), Mumbai - 2010 (250) E.L.T. 141 (Tri.-Mumbai), the Tribunal held that there is no requirement for the CHA to verify physically the premises of importer/exporter. The Tribunal also observed that it is a settled law that the punishment has to be commensurate and proportionate to the offence committed. In the present case, we notice that the puni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified by the respondent. 4.12 In view of discussions as above we do not find any 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), (e), (m) (n), whereas the findings recorded by the enquiry officer are more justifiable and logical. In the case of ACE Global Industries [2018 (364) ELT 841 (Tri Chennai)] tribunal observed as follows: 6. We are unable to appreciate such a peremptory conclusion. The CBLR, 2013 lays down that stepwise procedures are to be followed before ordering any punishment to the Customs broker. True, the said regulations do contain provisions for revocation of the license and for forfeiture of full amount of security deposit, however these are maximum punishments which should be awarded only when the culpability of the Customs broker is established beyond doubt and such culpability is of very grave and extensive nature. In case of such fraudulent imports, for awarding such punishment, it has to be established without doubt that the Customs broker had colluded with the importer to enable the fraud to take place. No such culpability is forthco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no need for a personal meeting of the CB with the importer. However, we find that this is a case where IEC of the importer firm was being misused by a third person, Shri Amar Vachhar who was neither partner nor held any other official position in that firm. Both the partners of M/s. Unisys Enterprises have disclosed in their statements to DRI that they were not aware of the details of the imports and had never met Shri Sameer Jha, proprietor of CB. From this, it emerges that the appellant has failed to obtain the authorization from the actual importer and violation of Regulation 11(a) stands established. 10. Regarding Regulation 11(d), requiring the CB to advice their client to comply with the provisions of customs Act, it stands established that the appellant has not even met the actual importer and as such requesting of advising the client for compliance of various legal positions does not arise. In view of the above failure to observe Regulation 11(d) stands established. 11. Regulation 11(e) requires due diligence to ascertain the correctness of information which he imparts to client. In the facts of the present case, both the partners of M/s. Unisys Enterprise, have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the original adjudicating authority has rightly imposed the penalty upon the appellant herein. HLPL Global Logistics Pvt. Ltd. [2019 (370) E.L.T. 501 (Tri. - De!.)} wherein it was held that - Under the circumstances, we are in agreement with the finding of the Ld. Adjudicating authority that CHA helps not properly verified the functioning of the client from at the declared address by using reliable independent and authenticate documents. This was a serious lapse on part of the CHA in verifying the KYC before taking up the Customs clearance of consignment of rough diamond imported by M/s. Neotex Exim Put. Ltd. The appellants, considering the nature of the imported goods i.e. rough diamond, would have exercised more vigilant approach before taking up the consignment for Customs clearance after verification of KYC norms of the importer, which has not been done in this case . However we find that the said decision has not been rendered in a proceedings initiated under CBLR, but is under section 110(2) of the Customs Act, 1962 as observed by the tribunal in para 5 reproduced below: 5. We have heard rival contentions and perused the case record. The issue before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e part of the authorities, otherwise two types of actions would not have been provided for. Primarily it is for the Commissioner/Tribunal to decide as to which of the actions would be appropriate but while choosing any of the two modes, the Commissioner/Tribunal has to consider all relevant aspects and has to draw a balance sheet of gravity of infraction and mitigating circumstances. The difference in approach for consideration of cases warranting revocation or suspension or non-renewal has to be borne in mind while dealing with individual cases. In a given case the authorities may be of the view that non-renewal of licence for a period of time would be sufficient. That would be in a somewhat similar position to that of suspension of licence though it may not be so in all cases. On the other hand, there may be cases where the authorities may be of the view that licensee does not deserve a renewal either. Position would be different there. Though we have not dealt with the question of proportionality, it is to be noted that the authorities while dealing with the consequences of any action which may give rise to action for suspension, revocation or nonrenewal have to keep several asp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in this manner. This is not to say that the trust operating between the Customs Authorities and the CHA is to be taken lightly, or that violations of the CHA Regulations should not be dealt with sternly. A penalty must be imposed. At the same time, the penalty must - as in any ordered system - be proportional to the violation. Just as the law abhors impunity for infractions, it cautions against a disproportionate penalty. Neither extreme is to be encouraged. In this case, in view of the absence of any mensrea, the violation concerns the provision of G cards to two individuals and that alone. A penalty of revocation of license for this contravention of the CHA Regulations unjustly restricts the appellant s ability to engage in the business of the CHA for his entire lifetime. As importantly, it skews the proportionality doctrine, substantially lowering the bar for revocation as a permissible penalty, especially given the dire civil consequences that follow. On the other hand, the minority Opinion of the CESTAT, delivered by the Judicial Member, correctly appreciates the balance of relevant factors, i.e. knowledge/mensrea, gravity of the infraction, the stringency of the penalty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the revenue authorities: They have been performing as CB for nearly 8 years and have developed goodwill for their firm in trade. They handle work relating to shipments of nearly 1000 reputed star house and AEO certified clients across the country. Their aggregate turnover for the last five years is about Rs 1591.18 crores. They have performed their functions throughout as Custom Brokers with utmost care and diligence, and their past record is evidence for their goodwill, integrity and efficiency in handling the customs related works. They have nine branches spread across the country and employ about 250 persons, the order of revocation of their license will not only be harsh on them but will deprive all the persons employed by them from their livelihood. 4.21 In view of the above discussions we are inclined to modify the impugned order to extent of: (i) Setting aside the order of revocation of the license of CB and forfeiture of the security deposit. (ii) Reduce the penalty imposed on the CB from Rs 50,000/- to Rs 25,000/- (iii) Since we are setting aside the order of revocation of license all the licenses and F , G and H cards issued to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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