2022 (12) TMI 1300 - AT - Customs

Tribunal remands case for reconsideration due to discrepancies in manipulation charge

MAT SHIPPING Versus C.C. -KANDLA

MAT SHIPPING Versus C.C. -KANDLA - TMI Issues Involved:1. Alleged manipulation of test reports by the appellant.2. Suspension and revocation of Customs Broker License.3. Alleged violations of various regulations under Customs Brokers Licensing Regulations (CBLR), 2018.Issue-wise Detailed Analysis:1. Alleged Manipulation of Test Reports by the Appellant:The primary accusation against the appellant, a custom broker, was that they influenced the chemical examiner at Kandla Laboratory to issue fabricated test reports to misclassify imported goods. The goods, suspected to be Superior Kerosene Oil (SKO), were declared as Industrial Composite Mixture Plus (ICMP) to bypass import restrictions. The Department of Revenue Intelligence (DRI) detained a consignment under Bill of Entry No. 7749179 dated 23.08.2018, and the test report from Kandla Laboratory indicated the goods met the requirements of Kerosene as per IS 1459-1974. The appellant allegedly manipulated the final boiling point of the cargo to be below 240 degrees Celsius to avoid classification as SKO, which is restricted for import.2. Suspension and Revocation of Customs Broker License:Based on the investigation, the appellant's license was suspended on 15.02.2019 and continued on 28.02.2019. A show cause notice dated 07.05.2019 was issued by the Principal Commissioner, Custom House, Kandla, proposing the revocation of the Customs Broker License under Regulation 14 of CBLR, 2018, forfeiture of the security furnished, and imposition of a penalty under Regulation 18 for failing to comply with several provisions of Regulation 10 of CBLR, 2018. The charges were confirmed, leading to the appellant's appeal before the tribunal.3. Alleged Violations of Various Regulations under CBLR, 2018:The appellant's defense addressed multiple alleged violations:- Regulation 10(a): The appellant argued that they obtained authorizations from all importers and none denied appointing them as the Customs Broker.- Regulation 10(d): The appellant contended that the department did not establish the imported goods as SKO, thus the allegation of non-compliance with advising clients to follow the law was unfounded.- Regulation 10(e): The appellant maintained that it is not the broker's responsibility to test the nature and description of goods but to rely on the importer's declaration.- Regulation 10(i): The appellant denied any conversation or deal with the chemical examiner to manipulate reports.- Regulation 10(f): The appellant argued that the violation could only be established if the goods were proven to be SKO, which was not done.- Regulation 10(m): The appellant claimed the allegation was unsubstantiated and without evidence.- Regulation 10(n): The appellant argued that all importers were verified and participated in the inquiry, thus the allegation of non-verification was incorrect.Tribunal's Findings:The tribunal noted that the main charge was the manipulation of the final boiling point to ensure the goods did not qualify as SKO but as ICMP. However, the tribunal found that even if the final boiling point was manipulated to below 240 degrees Celsius, it would still qualify as SKO, which contradicted the appellant's alleged objective. This fundamental discrepancy was not clarified in the impugned order. Consequently, the tribunal set aside the impugned order and remanded the matter to the original adjudicating authority for a fresh decision after giving the appellant an opportunity to defend themselves.Conclusion:The appeal was allowed by way of remand, and the case was sent back to the original adjudicating authority for reconsideration. The tribunal emphasized the need to clarify the fundamental charge of manipulating the test report and the resulting classification of the goods.