Customs Broker due diligence and supervision failures can justify licence revocation where diverted imported goods and false importer details are proved.

A Customs Broker may be held liable where it fails to exercise due diligence in verifying the importer, properly supervise its authorised representative, and act promptly on irregularities. On the facts recorded, the importer was fictitious, the declared address was false, and the seized goods were diverted from Customs custody to a private godown; corroborated statements and documents linked the broker's representative and associate to that diversion. The regulatory breaches were treated as grave, and proportionality did not prevent revocation of the licence and forfeiture of security in the circumstances.

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Issues: (i) Whether the Customs Broker could be held responsible for the misdeclaration, undervaluation, infringement of intellectual property rights, and diversion of the imported goods; (ii) Whether the Customs Broker had violated the obligations imposed under the Customs Broker Licensing Regulations so as to justify revocation of the licence and forfeiture of security.

Issue (i): Whether the Customs Broker could be held responsible for the misdeclaration, undervaluation, infringement of intellectual property rights, and diversion of the imported goods?

Analysis: The record showed that the import documents were processed through the Customs Broker's authorised representative, who was present during examination and seizure. The importer was found to be fictitious, the declared address false, and the goods were traced from Customs custody to a private godown instead of the bonded warehouse. The materials on record, including corroborated statements and contemporaneous documents, established that the Customs Broker's representative and his associate were involved in the movement and diversion of the seized consignment, and that the Customs Broker failed to verify the importer's antecedents and to act on the irregularities in time.

Conclusion: The issue was answered against the Customs Broker and in favour of Revenue.

Issue (ii): Whether the Customs Broker had violated the obligations imposed under the Customs Broker Licensing Regulations so as to justify revocation of the licence and forfeiture of security?

Analysis: The obligations of a Customs Broker require authorisation, due diligence, proper supervision of employees, and prompt reporting of non-compliance. On the facts found, the Customs Broker failed to exercise due diligence in verifying the importer, failed to safeguard the transaction after seizure, and was bound by the acts of its authorised representative and associate. The violations were held to be grave, and the principle of proportionality was not found to bar the extreme penalty in the circumstances.

Conclusion: The issue was answered against the Customs Broker and in favour of Revenue.

Final Conclusion: The regulatory breaches and the broker's connected involvement in the diversion of the seized goods justified the adverse action taken, and the challenge to the revocation did not succeed.

Ratio Decidendi: A Customs Broker is liable where it fails to exercise due diligence in verifying the importer and supervising its authorised representatives, and its regulatory obligations are breached by connected acts or omissions leading to diversion of goods and other customs violations.

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