Customs broker revocation found disproportionate where shipping papers supported the declared vessel description and no mens rea was shown.

A Customs broker was alleged to have mis-declared an imported vessel and breached its obligations under the Customs Brokers Licensing Regulations, 2013. The available shipping documents described the vessel as a research vessel, and the Indian Registrar of Shipping certificate supported that description, so the broker had placed the relevant papers before Customs and no negligence, carelessness, collusion, or mala fide intent was shown. The later reclassification of the vessel after investigation was insufficient, by itself, to establish mens rea. On that basis, revocation of the broker's licence and forfeiture of the security deposit were found disproportionate and unsustainable, and restoration of the licence was directed.

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Issues: Whether the Customs broker was liable for revocation of licence and forfeiture of security deposit on the allegation that it mis-declared the imported vessel and failed to discharge its obligations under the Customs Brokers Licensing Regulations, 2013.

Analysis: The documents filed along with the Bill of Entry described the vessel as a research vessel, and the certificate issued by the Indian Registrar of Shipping also supported that description. On that factual basis, the Customs broker had placed the relevant papers before the Customs authorities and there was no material to attribute negligence, carelessness, or collusion to the broker. The subsequent reclassification after investigation could not, by itself, establish malafide conduct or mens rea on the part of the broker. In such circumstances, the extreme penalty of revocation was held to be disproportionate and unsustainable.

Conclusion: The revocation of the Customs broker licence and forfeiture of the security deposit were set aside, and restoration of the licence was directed.

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