2019 (6) TMI 1594 - AT - Customs

Tribunal overturns license revocation & deposit forfeiture due to lack of evidence. Delays must be justified.

M/s. Mehul & Co. Versus Commissioner of Customs (General) Mumbai

The tribunal allowed the appeal, setting aside the revocation of the CB License and the forfeiture of the security deposit. The tribunal emphasized the ... Revocation of Customs Broker license - delay in conducting the enquiry proceedings - goods grossly misdeclared in terms of value, quantity and description - HELD THAT:- There are no justifiable reason being put forth to hold that Shri Sanjay Mishra was not the employee of the appellant. In the examination done before the enquiry officer, Shri Sanjay Mishra has specifically deposed that he is G Card holder given to him by Customs after conducting CHA examination as a permanent employee of a Custom Broker. He is thus authorized to meet the client and customs authorities and for signing the documents for clearance of goods. Commissioner has not rebutted the claims of the Custom Broker and Shri Sanjay Mishra to the effect that there was employer employee relationship between the two. Once the fact of Shri Sanjay Mishra being the employee of Custom Broker is accepted all other charges will fall. Appeal allowed - decided in favor of appellant. Issues Involved:1. Revocation of Custom Broker (CB) License.2. Allegations of license misuse and subletting.3. Delay in conducting inquiry proceedings.4. Justifiability of penalties imposed.Issue-wise Detailed Analysis:1. Revocation of Custom Broker (CB) License:The Commissioner of Customs (General), Mumbai, revoked the CB License of M/s Mehul & Co. and ordered the forfeiture of their security deposit due to alleged violations under the Customs Broker Licensing Regulations, 2013 (CBLR, 2013). The revocation was based on findings of gross misdeclaration of goods in terms of value, quantity, and description, and misuse of the Import Export Code (IEC) by unauthorized individuals.2. Allegations of License Misuse and Subletting:The charges against the appellant included allowing the license to be misused, failing to obtain proper authorization, not advising clients to comply with legal provisions, and not verifying the antecedents of the importer. The Commissioner concluded that the CB firm had subletted the license, as evidenced by the payment structure between the CB firm and Durga Shipping Co. The Commissioner noted that Sanjay Mishra, an employee of the CB firm, was effectively operating the license under the guise of being a legitimate employee.3. Delay in Conducting Inquiry Proceedings:The High Court of Bombay remanded the matter back to the tribunal, emphasizing that the time limits in Regulation 20 should be considered directory, not mandatory. The delay in the inquiry process, including the issuance of the notice and the submission of the inquiry report, was not justified by the Commissioner. The tribunal noted significant unexplained delays, including the period between the conclusion of initial proceedings and the subsequent examination of Shri Mehul Sanghavi, which affected the fairness of the process.4. Justifiability of Penalties Imposed:The tribunal found that the Commissioner did not provide adequate justification for the delay in the inquiry process. Additionally, the tribunal did not find sufficient evidence to support the claim that Sanjay Mishra was not an employee of the CB firm. The tribunal noted that the Commissioner failed to rebut the claims of an employer-employee relationship between the CB firm and Sanjay Mishra. As a result, the tribunal concluded that the harsh penalty of revocation was not justified and allowed the appeal, setting aside the impugned order.Conclusion:The tribunal allowed the appeal, setting aside the revocation of the CB License and the forfeiture of the security deposit. The tribunal emphasized the need for justifiable reasons for delays in the inquiry process and found that the evidence did not support the allegations of subletting the license. The order was pronounced in the open court.