2019 (11) TMI 621 - AT - Customs

Tribunal overturns order, exonerates appellant from allegations under Regulations 10(e) and 10(n). Emphasizes punishment proportionality.

The Tribunal set aside the impugned order, allowed the appeal, and disposed of the stay petition. The appellant was exonerated from the allegations under ... Revocation of CHA License - forfeiture of security deposit - not obtaining authorization from the importer - violation of Regulation 10(a) of the CBLR, 2018 - not advising the client - violation of Regulation 10(d) of the CBLR, 2018 - non-compliance with due diligence - Regulation 10(e) of the CBLR - non-verification of Regulation 10(n) of the CBLR - HELD THAT:- Out of the 4 violations alleged against the appellant, the Inquiry Officer has exonerated the appellant under Regulation 10(e) and 10(n) and has only found the appellant violating Regulations 10(a) and 10(d) which pertains to not obtaining authorization from the importer and not advising his client properly. As far as verification of the documents are concerned, the appellant has been exonerated and we find that the appellant was approached by one Mr. Alexander Nathan who is alleged to be the employee of the importer as per his own statement which remained unrebutted till today shows that the appellant has been properly authorized by Mr. Alexander Nathan by handing over the necessary authorization and KYC documents which were properly verified by the appellant. Further in view of the various decisions relied upon by the appellant, it is not necessary that the Customs Broker should personally verify the premises of the importer. Once the Customs Broker has been approached by the employee of the importer and he has verified the necessary documents, then there cannot be any allegation of violations against the CHA - Further the impugned order says that the appellant has not advised the importer without specifying as to what advice was required to be given by the appellant and the same was not given by the appellant to the importer. The impugned order is not sustainable in law - Appeal allowed - decided in favor of appellant. Issues Involved:1. Violation of Regulation 10(a) of the CBLR, 2018 - Not obtaining authorization from the importer.2. Violation of Regulation 10(d) of the CBLR, 2018 - Not advising the client.3. Violation of Regulation 10(e) of the CBLR, 2018 - Not complying with due diligence.4. Violation of Regulation 10(n) of the CBLR, 2018 - Not verifying the IEC number and functioning of the client at the declared address.Detailed Analysis:1. Violation of Regulation 10(a) of the CBLR, 2018 - Not obtaining authorization from the importer:The Inquiry Officer found the allegation of not obtaining authorization from the importer to be sustainable. However, the appellant argued that Mr. Alexander Nathan, who approached them, was an employee of the importer and provided the necessary authorization and KYC documents. The Tribunal noted that the appellant had verified these documents and that the statement of Mr. Alexander Nathan being an employee of the importer remained unrebutted. Therefore, the Tribunal concluded that the appellant had been properly authorized by Mr. Nathan, and there was no violation of Regulation 10(a).2. Violation of Regulation 10(d) of the CBLR, 2018 - Not advising the client:The Inquiry Officer also found the allegation of not advising the client to be sustainable. The appellant contended that the impugned order did not specify what advice was required and not given. The Tribunal observed that the Commissioner had not pointed out any specific lapse on the part of the appellant under Regulation 10(d) and had merely resorted to general assumptions. Consequently, the Tribunal found no substantial evidence to support the allegation of violation of Regulation 10(d).3. Violation of Regulation 10(e) of the CBLR, 2018 - Not complying with due diligence:The Inquiry Officer exonerated the appellant from the allegation of not complying with due diligence. The Tribunal concurred with this finding, noting that the appellant had verified the necessary documents provided by Mr. Alexander Nathan. The Tribunal referenced various judicial precedents, emphasizing that personal verification of the importer's premises by the Customs Broker was not mandatory. Hence, the Tribunal upheld the exoneration of the appellant under Regulation 10(e).4. Violation of Regulation 10(n) of the CBLR, 2018 - Not verifying the IEC number and functioning of the client at the declared address:Similar to Regulation 10(e), the Inquiry Officer found the allegation of not verifying the IEC number and the client's functioning at the declared address to be unsustainable. The Tribunal agreed with this conclusion, reiterating that the appellant had verified the necessary documents and there was no requirement for physical verification of the premises. Thus, the appellant was exonerated from the allegation under Regulation 10(n).Conclusion:The Tribunal found that the Inquiry Officer's report had exonerated the appellant from the allegations under Regulations 10(e) and 10(n), and there was no substantial evidence to support the allegations under Regulations 10(a) and 10(d). The Tribunal emphasized the importance of proportionality in punishment, referencing various judicial precedents that highlighted the need for penalties to be commensurate with the violations. Consequently, the Tribunal set aside the impugned order, allowed the appeal, and disposed of the stay petition.