Customs Broker due diligence defeated licence revocation and penalty absent proof of collusion or deliberate misconduct.

A Customs Broker's licence revocation and penalty were found unsustainable where the broker had obtained and verified available KYC documents and there was no proof of collusion, deliberate facilitation, or mens rea. The governing regulations were read as requiring authorization, compliance advice, and due diligence based on documents and reliable information, not as imposing an inflexible duty of physical verification of the importer's premises or a personal meeting. As the show cause notice did not clearly identify the exact breach and the record showed no active misconduct, the revocation order and monetary penalty were set aside with consequential relief.

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Issues: Whether the revocation of the Customs Broker licence and the imposition of penalty were justified on the ground that the broker failed to verify the importer's antecedents, KYC particulars and the correctness of the import documentation.

Analysis: The enquiry report had found negligence but negatived any deliberate connivance. The show cause notice did not clearly identify the exact regulatory breach, and the record showed that the broker had obtained and verified the available KYC documents. The governing regulations required authorization, advising compliance, and due diligence, but did not require physical verification of the importer's premises or a personal meeting as an inflexible condition. The decision relied on the settled view that a Customs Broker is to verify the client on the basis of documents and reliable information placed before it, and that absent evidence of active facilitation, collusion, or mens rea, revocation and penalty cannot be sustained merely because the import was later found to be misdeclared or undervalued.

Conclusion: The licence revocation and penalty were not sustainable and the findings were in favour of the appellant.

Final Conclusion: The order of revocation and penalty was set aside, and the appeal was allowed with consequential relief.

Ratio Decidendi: A Customs Broker cannot be penalised by revocation of licence or monetary penalty in the absence of proof of collusion or deliberate misconduct where due diligence was exercised on the basis of the documents and information available, and physical verification of the importer's premises is not a mandatory requirement under the regulatory framework.

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