2021 (10) TMI 720 - AT - Customs

Tribunal remands customs broker license revocation, orders fresh inquiry

Simon Brothers Pvt Ltd Versus Commissioner of Customs (General), Mumbai

The tribunal set aside the order revoking the customs broker license and forfeiting the security deposit, directing a fresh inquiry to be conducted by the ... Revocation of Customs Broker License - forfeiture of the security deposit - levy of penalty - imports of mobile phones - excess of quantity declared - lacking in mandatory BIS marks - HELD THAT:- The allegations pertaining to breach of obligations and lack of proper supervisory control over employees has been held as proved along with the allegation that the licence had been transferred to Hitesh Ajmera who, admittedly, had been handling of not only the consignments involved in the said investigations but of many other imports and exports for several years. The embargo, in Customs Brokers Licensing Regulations 2018, on transfer of licence and the vicarious responsibilities for acts of omission and commission by employees are intentionally segregated from the obligations that are the essence binding the licensor and licencee vis-à-vis clients in the scheme of Customs Brokers Licensing Regulations, 2018. On the finding of the licence having been transferred, the appellant should not have been held accountable for compliance with obligations that devolve on a licencee in the handling of clients. Nor can the licensee on record be proceeded against for acts of employees as the alteration of employee-employer relationship erases the existence of expectation as far as employees are concerned. The substantial reliance placed by the licencing authority on the findings of the adjudicating authority in proceedings under the Customs Act, 1962 not only weakens the conclusion in the light of subsequent developments but is also inconsistent with the principles of natural justice that mandates independent appraisal of the charges framed under the Customs Brokers Licensing Regulations, 2018 on the findings evinced in the enquiry proceedings. In the light of the submissions made by the customs broker on alleged misuse of the licence coupled with the absence of the Director, Frederick D’Souza, from day-to-day functions, the sustainability of the charges requires a fresh determination - the matter is remanded back to the licensing authority to cause a fresh enquiry to be conducted and for decision on the proposed revocation and forfeiture to be taken thereafter - Appeal allowed by way of remand. Issues:Challenge to revocation of customs broker license and forfeiture of security deposit under Customs Broker Licensing Regulations, 2018.Analysis:The appellant, M/s Simon Brothers Pvt Ltd, contested the revocation of its customs broker license and forfeiture of the security deposit under Customs Broker Licensing Regulations, 2018. The case arose from investigations into imports of mobile phones by their client, M/s Creative Sales and Marketing, which were found to be in excess of declared quantity and lacking mandatory BIS marks. Hitesh Ajmera, who handled the clearance, was alleged to have made upfront payments and assured monthly payments from earnings related to the license operation.The suspension of the license was continued pending completion of prescribed procedures under the Customs Brokers Licensing Regulations. The inquiry identified breaches of various regulations, leading to the revocation and forfeiture of the license. Charges included breaches of obligations in regulation 11 and failure to exercise supervision over employees as per regulation 17.The appellant argued that parallel proceedings under the Customs Act resulted in penalties being dropped, undermining the basis for the revocation. They also raised concerns about the delay in proceedings, unanswered issues during the process, and the presumption of license transfer without conclusive evidence.The Authorized Representative highlighted the lack of diligence by the licensee in complying with obligations, emphasizing the role of the customs broker in facilitating violations of import laws. The revocation was deemed justified based on established breaches.Upon review, the tribunal found the allegations of breaches and lack of supervisory control over employees proven. However, it questioned the accountability of the appellant for transferred license obligations and employee actions, emphasizing the segregation of responsibilities under the Customs Brokers Licensing Regulations, 2018.The tribunal criticized the reliance on findings from Customs Act proceedings, calling for an independent assessment based on the Customs Brokers Licensing Regulations charges. Due to concerns over misuse of the license and the absence of the director from daily operations, the tribunal remanded the matter for a fresh inquiry and decision on revocation and forfeiture.In conclusion, the tribunal set aside the impugned order, directing a fresh enquiry to be conducted by the licensing authority for a new decision on the revocation and forfeiture issues.