2015 (12) TMI 2 - AT - Customs

Tribunal overturns Customs Broker License suspension citing procedural flaws and lack of evidence

The Tribunal set aside the suspension of the Customs Broker License due to procedural irregularities and lack of justification for the delay in taking ... Suspension of CHA license - Denial of duty free benefit - Misdeclaration - absence of the ITC (HS) Code number relating to Cocoa powder in the amendment sheets issued by DGFT against the original DFIA Licences - Held that:- It is quite obvious from the remarks of the Assessing Officer (AC)that the assessment was done in full consciousness of the facts of the case. We fail to see how the extended period can be invoked even under the Customs Act for demanding duty. We also fail to understand how suppression of facts or mala fide intention can be alleged on the part of the importer and, more importantly, the CHA, when all the facts were clearly before the Customs authorities. The case under the Customs Act is not before us. The case before us relates to suspension of CHA License in connection with the same imports. We find the allegations against the CHA are not supported by facts. We do not find mis-representation by the CHA of any facts. The CHA s role is to present all the documents before the assessing authority which they did. And the assessing authority passed the assessment order in complete knowledge of the facts as well as with knowledge of the CESTAT order in the case of M/s. Kushalchand & Co. (2010 (10) TMI 239 - CESTAT, BANGALORE). The endorsements were made by the assessing officer on the face of the Bill of Entry on the basis of CESTAT judgement which has become final. It (CESTAT) judgement was not challenged and therefore became binding on all lower authorities including Customs officers and the Customs Brokers. Judicial discipline requires the department to follow rulings rendered by higher judicial fourms. Therefore no action is warranted against the CHA. - Impugned order is set aside - Decided in favour of appellant. Issues Involved:1. Legality of the suspension of the Customs Broker License.2. Allegations of misrepresentation and suppression of facts by the Customs Broker.3. Compliance with procedural requirements for suspension under the Custom Broker Licensing Regulation (CBLR), 2013.4. Applicability of the previous Tribunal and Court rulings on the current case.Detailed Analysis:1. Legality of the Suspension of the Customs Broker License:The appellant, M/s Trans Sea Services Pvt. Ltd., had their Customs Broker License suspended by an Order dated 24.9.2014, which was confirmed by the Order-in-Original dated 21.10.2014. The appellant sought revocation of this interim suspension pending final adjudication of a show-cause notice dated 25.8.2014. The Tribunal found that there was a significant delay between the completion of imports (November 2012) and the issuance of the show-cause notice (August 2014), which exceeded the 12-month limitation period. The Tribunal held that the suspension was not justified as it did not meet the condition precedents of 'immediate action, as necessary, for reasons to be recorded' as required under Regulation 19 of CBLR, 2013 and the previous CHALR, 1984.2. Allegations of Misrepresentation and Suppression of Facts by the Customs Broker:The Tribunal examined the role of the Customs Broker in the import of Cocoa powder by M/s. Kushal Chand & Co. The Tribunal noted that the Customs Broker had performed their duties by presenting all necessary documents to the assessing authority. The assessment of the Bill of Entry was done by the Assistant Commissioner, who acknowledged that 'Flour is meant for any powdery substance and that the two terms powder and flour may be considered synonymous, as per CESTAT observation in S.Khusalchand's case.' The Tribunal found no evidence of misrepresentation or suppression of facts by the Customs Broker, as all relevant information was disclosed to the Customs authorities.3. Compliance with Procedural Requirements for Suspension under CBLR, 2013:The Tribunal held that the suspension of the Customs Broker's license did not comply with the procedural requirements under Regulation 19 of CBLR, 2013. The Tribunal emphasized that suspension should be an immediate action taken in justified cases, and post-decisional hearings should be provided. In this case, the suspension was imposed more than 12 months after the alleged misconduct, which was against the guidelines issued by the Board (Circular No. 9/2010-Cus dated 8.4.2010). The Tribunal also noted that the Customs Broker employed about 300 persons, and the suspension adversely affected their livelihood.4. Applicability of Previous Tribunal and Court Rulings:The Tribunal referred to its previous orders in the case of Khushalchand & Co. Vs. Commissioner of Customs, Mangalore, where it was held that Cocoa powder qualified as flour under the DFIA. This order was not challenged by the Revenue, making it binding. The Tribunal also referred to the Bombay High Court ruling in Babaji Shivram Clearing & Carriers Pvt. Ltd. Vs. UOI, which emphasized timely action by Customs authorities and post-decisional hearings. The Tribunal found that the suspension order conflicted with these precedents and the directions of the CBE&C.Conclusion:The Tribunal set aside the impugned order dated 24.09.2014, releasing the interim suspension of the appellant's Customs Broker License effective from 1.10.2014. The Tribunal directed the concerned Commissioner to allow the appellant to function as a Customs Broker pending final adjudication of the show-cause notice dated 25.08.2014. The appeal was allowed with consequential benefits.