2022 (7) TMI 1198 - HC - Customs

Court Upholds License Revocation for Customs Broker, Emphasizes Compliance Obligations

Commissioner Of Customs (Airport & Administration) Versus M/s. Marico Logistics Private Limited

Commissioner Of Customs (Airport & Administration) Versus M/s. Marico Logistics Private Limited - TMI Issues Involved:1. Liability of the respondent under Regulation 17(9) of the Customs Broker Licensing Regulation 2013.2. Implications of the payment of differential duty amount by the respondent.3. Binding nature of statements made by the director of the respondent admitting the offense.Detailed Analysis:1. Liability under Regulation 17(9) of the Customs Broker Licensing Regulation 2013:The court examined whether the respondent, a Customs Broker, was liable for the acts or omissions of its employees as stipulated under Regulation 17(9) of the Customs Broker Licensing Regulation (CBLR) 2013. The respondent's license was revoked due to manipulation in the net weight of imported goods. The Directorate of Revenue Intelligence (DRI) reported the offense, leading to the suspension and subsequent revocation of the respondent's license. The tribunal had previously reversed this decision, citing inconsistencies in statements. However, the court emphasized that the tribunal failed to consider the preponderance of probability and the respondent's obligations under Regulation 11 of CBLR 2013. The court concluded that the respondent failed to fulfill its duties, including verifying the importer's identity and ensuring compliance with customs regulations, thereby justifying the revocation of the license.2. Implications of the Payment of Differential Duty Amount:The court addressed whether the payment of Rs. 65.40 lakhs by the respondent constituted an admission of liability. The tribunal had found the payment insufficient to prove the respondent's involvement as the de facto importer. However, the court disagreed, noting that the payment indicated the respondent's acknowledgment of the duty liability. The respondent's failure to produce the importer and the voluntary payment of the differential duty further supported the conclusion that the respondent acted as the de facto importer. Thus, the court held that the payment was a significant factor in establishing the respondent's liability.3. Binding Nature of Statements by the Director:The court considered whether the statements made by the respondent's director, admitting the offense, were binding on the respondent company. The tribunal had noted contradictions in the director's statements and the statements of other individuals involved. However, the court emphasized that the standard of proof in such cases is based on the preponderance of probabilities, not beyond reasonable doubt. The statements recorded under Section 108 of the Customs Act indicated clear admissions of guilt and manipulation of weights, which were not retracted. The court found no inconsistencies significant enough to undermine the evidence presented by the licensing authority. Therefore, the court concluded that the director's statements were binding on the respondent company and supported the revocation of the license.Doctrine of Proportionality:The tribunal had invoked the doctrine of proportionality, deeming the revocation of the license too harsh. The court, however, found this reasoning based on misplaced sympathy. It reiterated that the respondent had no vested right to handle cargo in a Customs area, and the license came with conditions that the respondent failed to meet. The court referenced several Supreme Court judgments to assert that judicial review of administrative actions is permissible only if the decision is illegal, unreasonable, irrational, or procedurally improper. The court concluded that the revocation of the license was proportionate to the violations committed by the respondent.Conclusion:The court found that the tribunal's order suffered from errors of law and perversity. It upheld the revocation of the respondent's license, answering the substantial questions of law in favor of the revenue. The appeal filed by the revenue was allowed, and the tribunal's decision was overturned.