2022 (12) TMI 1251 - AT - Customs

Customs broker's license reinstated due to lack of evidence, suspension deemed unjustified.

Daroowala Bros and Company Versus Commissioner of Customs (General), Mumbai

The tribunal found insufficient evidence linking the appellant directly to the alleged substitution of samples, deeming the suspension improper and ... Suspension of Customs Broker License - propriety of the deprivation - Clearance of PVC coated fabric width 54”’ packed in 917 rolls - HELD THAT:- From the statutory prescription, it is abundantly clear that there is no procedural fetter on ordering suspension of licence except for determination of immediacy when enquiry is pending or contemplated against a customs broker; however, continuation of suspension will be maintainable only upon affording opportunity for ‘post-decisional’ hearing in compliance thereof with stipulated timelines. The mandate of process is, invariably, observed in letter but, as it happens all too often, disregarding the harmonious construct of the provision as a whole: that, if inquiry has been only contemplated at the time of suspension, continuation of suspension is contingent upon crystallizing intention to take recourse to regulation 17 of Customs Broker Licencing Regulations, 2018 and that, either during pendency or mere contemplation of enquiry, the consequence of non-suspension outweighs deprivation caused by suspension. The latitude, and restraint, inherent in the design of regulation 16 of Customs Broker Licencing Regulations, 2018 thus revealed upon careful perusal is made more conspicuous by the appending of the non obstante clause: suspension is not a necessary pre-requisite for initiation of inquiry with intent to revoke licence or impose penalty and, while intention so to do has no bearing on suspension, decision to proceed with enquiry is inevitable precursor for continuation of suspension. It is the latter that we are concerned with in resolving this dispute - The allegation of substitution of samples has not attained final determination as fact and there is no evidence, as yet, linking the appellant to the allegation except by way of vicarious responsibility for misconduct of employee. It may not appear unreasonable for the appellant, as licencee, to be considered as accountable for acts of omission and commission on the part of its employees. The involvement of an individual, remunerated by the appellant, in alleged substitution of samples drawn by customs authorities was the cause for suspension. The continuation of suspension in the impugned order, sought to be justified by relying on confessional statements, does not go beyond that allegation at this stage. The individual concerned does not possess any status under the Regulations and act of his, in any capacity whatsoever, is beyond the scope of retribution under the Regulations. To foist deprivation of livelihood as licencee merely on inference, lacking legal foundation and devoid of procedural sanctity, is improper and our countenance of such will be approval of misadventure. The ends of justice can be met only by restoration of the license to the appellant while making it abundantly clear that this restoration will not have any impact on further investigations or further proceedings under the appropriate provisions in Customs Broker Licensing Regulations, 2018 that lies within the empowerment conferred on the licencing authority upon completion of investigation - Appeal allowed. Issues:Suspension of customs broker license under regulation 16(2) of Customs Broker Licensing Regulations, 2018 for alleged substitution of samples in consignment imported against bill of entry.Analysis:1. The appellant challenged the suspension of their customs broker license due to alleged substitution of samples in a consignment imported against a bill of entry. The test report indicated a discrepancy in the goods declared and the actual contents of the consignment, leading to the suspension under regulation 16 of Customs Broker Licensing Regulations, 2018.2. The appellant denied involvement in the substitution and argued that the delay in suspension indicated lack of immediacy. They relied on previous tribunal decisions to support their case and highlighted the failure to provide the offense report for effective defense. The appellant emphasized that their role had not been properly investigated before the suspension.3. The respondent contended that evidence, including a tampered sample and statements from individuals involved, supported the suspension to prevent future fraudulent activities. The presence of the appellant's employee during the sample drawal raised suspicions of involvement in the substitution.4. The tribunal emphasized that suspension is an interim measure pending further inquiry and should be based on immediate necessity. The tribunal highlighted the procedural requirements for suspension and the importance of post-decisional hearings to maintain fairness and natural justice.5. The tribunal clarified that suspension does not have to be preceded by an offense report and should be based on the immediate need for action. The decision to continue suspension should be supported by a pending or contemplated inquiry against the customs broker.6. The tribunal discussed the statutory framework governing customs broker licensing and emphasized the need for evidence linking the appellant directly to the alleged substitution of samples. Vicarious responsibility for employee actions was also considered within the regulatory framework.7. Ultimately, the tribunal found insufficient evidence linking the appellant directly to the alleged substitution of samples. The suspension was deemed improper and unjustified, leading to the restoration of the license without impacting further investigations or proceedings under the Customs Broker Licensing Regulations, 2018.This detailed analysis of the judgment highlights the key arguments, legal principles, and the tribunal's reasoning in deciding to lift the suspension of the customs broker license.