2019 (10) TMI 1288 - AT - Customs

Tribunal overturns license suspension due to delayed action, cites need for urgency

M/s. Maa Kamakhya Enterprise Versus Principal Commissioner of Customs (Preventive), Kolkata

M/s. Maa Kamakhya Enterprise Versus Principal Commissioner of Customs (Preventive), Kolkata - 2020 (372) E.L.T. 594 (Tri. - Kolkata) Issues involved:- Alleged suspension of appellant's license for transacting export business without filing BRCs- Appellant's compliance with Customs Broker Licensing Regulations- Allegations of fraudulent export and manipulation by the Customs Broker- Applicability of Regulation 16(1) of CBLR 2018- Suspension order validity and necessity of immediate action- Bombay High Court ruling on interim suspension of license- Direction for expeditious completion of enquiry proceedingsIssue 1: Alleged suspension of appellant's license for transacting export business without filing BRCsThe appellant's license was suspended due to their involvement in handling export consignments where the exporter failed to submit Bank Realization Certificates (BRCs) against draw back claims. The department observed discrepancies in the export process, suspecting that certain consignments were not physically exported but only documented. The suspension was made under Regulation 16(1) of CBLR 2018.Issue 2: Appellant's compliance with Customs Broker Licensing RegulationsThe appellant argued that they complied with the provisions of Regulation 10(d) and 10(e) of CBLR 2018. They claimed to have verified the exporter's credentials and maintained proper documentation before handling the export consignments. The appellant contended that the allegations were based on assumptions and that they fulfilled their obligations as a Customs Broker.Issue 3: Allegations of fraudulent export and manipulation by the Customs BrokerIt was alleged that the Customs Broker facilitated the exporter in claiming export benefits without ensuring actual exportation. The Customs Broker's responsibility includes handling all documents until actual exportation occurs. The department suspected manipulation of the system to benefit the exporter without verifying the physical export of goods.Issue 4: Applicability of Regulation 16(1) of CBLR 2018The appellant contested the applicability of Regulation 16(1) of CBLR 2018 to their case, arguing that immediate suspension was not warranted. They emphasized that the duty drawback was paid to exporters without timely submission of BRCs, questioning the necessity of immediate action under the regulation.Issue 5: Suspension order validity and necessity of immediate actionThe Tribunal found that the suspension order was an interim measure based on alleged misgivings from 2015, issued in 2019. Citing a Bombay High Court ruling, the Tribunal concluded that the suspension lacked urgency as the alleged violation occurred several years prior. The Tribunal set aside the suspension order, allowing the appellant to resume business as a Customs Broker.Issue 6: Bombay High Court ruling on interim suspension of licenseThe Tribunal referenced a Bombay High Court ruling emphasizing that interim suspension should only be used in cases requiring immediate action. In this instance, the delay between the alleged violation and suspension indicated no emergency warranting immediate license suspension.Issue 7: Direction for expeditious completion of enquiry proceedingsThe Tribunal directed the Principal Commissioner of Customs to conclude the enquiry proceedings promptly, preferably within six months. This direction aimed to ensure a timely resolution of the case while allowing the appellant to continue operating as a Customs Broker.This detailed analysis covers the key issues addressed in the judgment, providing a comprehensive overview of the legal aspects and arguments presented by the parties involved.