TMI Blog2023 (10) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... offence report was received from Kolkata Customs though it is shown that based on adjudication order of SIIB investigation, prohibition order of Commissioner of Customs, Kolkata, the Mumbai Customs authorities have initiated action under CBLR, 2018. There are no reasons recorded in detail justifying the delay in passing the impugned order by the learned Principal Commissioner. It appears that the reasons having been not quoted and if such reasons exist, the same being not specified and not explained for undue delay cannot be accepted as reasonable grounds. On the basis of various decisions taken by the coordinate benches of the Tribunal and higher judicial forums on the adherence to time limits prescribed under CBLR, 2018, and for the opportunity to be given for cross examination of witness whose statements were relied upon for action to be taken under CBLR, it is found that there is no basis for sustaining the impugned order of the learned Principal Commissioner. Failure to bring the rejection report of FSSAI to the knowledge of Customs authorities - non conduct of due diligence and advise the importer properly - violation of Regulation 10(d) and 10(e) of the Rules - H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants had colluded with the importer in clearance of imported goods contrary to the FSSAI rejection certificate. Thus, it is found that the conclusions arrived at by the Principal Commissioner in the impugned order is contrary to the factual position and thus it is not legally sustainable. There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revoking the license of the appellants, as well as in imposition of penalty against them and for forfeiture of security deposit - appeal allowed. - HON BLE MR. S.K. MOHANTY, MEMBER (JUDICIAL) And HON BLE MR. M.M. PARTHIBAN, MEMBER (TECHNICAL) Shri S. D. Deshpande, Advocate for the Appellant Shri Ram Kumar, Authorized Representative for the Respondent ORDER Per : M. M. PARTHIBAN : This is an appeal filed by M/s Protocol Logistics Private Limited, Mumbai (herein after, referred to as the appellants for short) assailing the Order-in-Original CAO No. 07/CAC/PCC(G)/SJ/CBS/Adj. dated 04.05.2023 (herein after, referred to as the impugned order ). 2. In the impugned order the learned Principal Commissioner of Customs (General), Mumbai in e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued to the appellants for acting as a Customs Broker under CBLR 2018, besides imposition of penalty and forfeiture of entire security deposit furnished by the appellants vide the impugned order dated 04.05.2023. 3.2 Learned Advocate appearing for the appellants submitted that on merits as well as on time limits, the impugned order does not sustain and pleaded that the same may be set aside. He also stated that appellants had already been imposed with a penalty of Rs.5,00,000/- for the violations of CBLR, 2018 vide Order-in-Original dated 31.03.2012. Hence, they should not be penalized again for the same violations. Further, he stated that the offence report in their case was received by the appellants on 10.08.2022 and thus action initiated by issue of SCN dated 28.12.2022 is beyond the prescribed period of 90 days and on account of delay in initiating the proceedings under CBLR, the same cannot be sustained. 3.3. Learned Advocate stated that it is not under dispute that the clearance of imported goods covered under B/E No.5052617 dated 25.09.2019 was done through Customs SWIFT system integrated with FSSAI; and as per FSSAI circular dated 10.01.2014, NOC for clearance of fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and hence got themselves necessary permission to operate their business as CB at Kolkata Customs Commissionerate under Regulation 7(3) ibid. FSSAI authorities vide letter in File No. AO/ Customs/FSSAI-ER-2021 dated 14.01.2021 had requested the Commissioner of Customs (Port), Custom House, Kolkata to take suitable action against the importer and CB due to non-compliance of FSS Act, 2006 and Rules and Regulations made there under, in import of Dried peeled whole Betel Nut by the importer-trader M/s Aakam Exim Private Limited, Chennai. On this basis, SIIB Customs, Kolkata had initiated investigation and issue show cause proceedings vide SCN No. S2-06/2021 SIB (Port) dated 28.07.2021, which culminated in issue of Order-in-Original No. KOL/CUS/ADC/PORT/Gr.I/26/2022 dated 31.03.2022 by confiscating the imported goods in B/E No.5052617 dated 25.09.2019 with redemption fine of Rs.6,00,000/- and imposed penalty of Rs.5,00,000/- each on the importer and on the appellants CB for the violations of Regulations 10(d), (e), (f), (m) and (q) of CBLR, 2018 under Section 112(a)(i) of the Customs Act, 1962. Subsequently, in terms of CBEC Circular No.09/2010-Customs dated 08.04.2010, Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follow the RMS/CCR instructions. Also check and endorse COO CFT. Accordingly, the appellants after ascertaining from the importer, who had visited FSSAI office and informed them that FSSAI had issued NOC, ensured payment of applicable customs duty on 05.03.2020 and produced documents to the Customs authorities on 06.03.2020. Upon issue of out pass from Customs on 19.03.2020, the appellants cleared the imported goods from Balmer Lawrie CFS on 20.03.2020. 10. We further find that instructions issued by CBEC circular No.58/2001-Customs dated 25.10.2001 in respect of application of Prevention of Food Adulteration Act, 1954/Food Safety and Standards Act, 2006 provide for referring all food products to the PHOs/FSSAI for testing and clearance shall be allowed by Customs only after receipt of the test report. The relevant paragraph of the above CBEC circular is extracted below: 2. The matter has been examined by the Board. Considering the difficulties being faced by the trade, the following decisions have been taken for clearance of food articles. 2.1 The Customs shall undertake the following general checks in addition to testing of samples in terms of subparagraph 2.2 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority of India by an order for the purpose of performing functions under section 25 of the Act; (l) Food Importer means a Food Business Operator importing or desirous of importing article of food into Indian territory, who is duly licensed as Importer under the Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011 made under the Act; Chapter II Licensing of Food Importers 3. (1) No person shall import any article of food without an import license from the Central Licensing Authority in accordance with the provisions of the Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011. (2) For the purposes of sub-regulation (1), the Food Importer shall register himself with the Directorate General of Foreign Trade and possess valid Import-Export Code. E. Issue/ Non-issue of NOC/NCC 29. Authorized Officers (AOs) to forward the system generated NOC only to the Customs Authorities if the sample is conforming to the tested parameters. In case the food article does not conform to the tested parameters, forward the system generated non-conforming report along with lab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not the case of the Revenue that there was any collusion by the appellants with FSSAI or Customs authorities; or that the appellants CB or importer fabricated the NOC, particularly when such NOC/ certificate is required to be issued as system generated and the manual certificates are exceptional and after obtaining permission from FSSAI HQ. In view of the above factual details, we are of the considered view that under no circumstances, particularly when the imported goods have been duly permitted by the Customs authorities for FSSAI clearance/NOC, the appellants CB could be held responsible for taking action under CBLR. Thus, we are of the view that the impugned order is not sustainable as it has ignored the above facts. 12. On the aspect of time limits prescribed under CBLR, the very first action under Regulation 17(1) ibid, is for issue of notice in writing stating the grounds on which it is proposed to revoke the license or impose penalty, which is required to be issued within 90 days from the date of receipt of intelligence/offence report from investigation authority. As the SCN was issued in this case on 28.12.2022, after having received the prohibition order dated 15.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely delay in adjudication and that for the import transaction in September 2019, the order of revocation of appellant s customs broker license has been passed on 04.05.2023. Revenue is unable to explain why there was such a long delay in taking action against appellants, when the information about confirmation of penalties for improper import through SIIB investigation was received vide Order dated 31.03.2022. There is no mention of when the offence report was received from Kolkata Customs though it is shown that based on adjudication order of SIIB investigation, prohibition order of Commissioner of Customs, Kolkata, the Mumbai Customs authorities have initiated action under CBLR, 2018. There are no reasons recorded in detail justifying the delay in passing the impugned order by the learned Principal Commissioner. It appears that the reasons having been not quoted and if such reasons exist, the same being not specified and not explained for undue delay cannot be accepted as reasonable grounds in terms of the test laid down by the Hon ble High Court of Bombay. 15. In view of the above and on the basis of various decisions taken by the coordinate benches of the Tribunal and higher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... astern Region) of the FSSAI addressed to appellants and importer have been issued beyond the date of clearance of imported goods by Customs on 20.03.2020, and thus the appellants could not have either advised the importer or brought this to the knowledge of Customs. Further, when the CBEC circular and FSSAI guidelines specifically provide that the Customs authorities should check on the issue of NOC before clearance of imported goods, the responsibility for exercise of due diligence or bringing this to the knowledge of Customs does not lie on the part of the appellants and for the same, responsibility cannot be fastened on the appellants. Thus, we find that there is no evidence to indicate any violation of Regulations 10(d) or 10(e) ibid, by the appellants. 18. We further find that in respect of Regulation 10(f), 10(m) and 10(q) ibid, there is no factual evidence to show that the appellants had withheld any information, or was there any delay or inefficiency or non-cooperation to join the investigation by the appellants. The factual records indicate that the appellants were not aware of the non-conformity certificate issued to the importer and they were informed by the importer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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