2023 (4) TMI 785 - AT - Customs

Customs Broker license suspension overturned, allowing appeal to proceed.

M/s. India Transport & Travel Private Limited Versus Commissioner of Customs (Airport & ACC), Kolkata

The Tribunal concluded that the suspension of the Customs Broker's license was not warranted as the investigation was completed and a Show Cause Notice ... Suspension of Customs Broker License - restricted goods - immediate action required as specified under Regulation 16(1) CBLR 2018 - illegal attempt (on the part of Customs Broker) to import the ‘restricted goods’ namely second-hand ‘Data Processing Servers’ without having mandatory documents - HELD THAT:- The import of second hand goods is ‘restricted’ and importable only against an authorization from DGFT. Also, Data Processing Servers are notified goods at Sl.No.15 of Electronics and IT Goods (Requirements of Compulsory Registration) Order, 2012 (hereinafter referred as CRO, 2012) as amended from time to time and the import is ‘restricted’ and attracts mandatory BIS certification and import of unregistered/non compliant notified products as in CRO, 2012 as amended, is prohibited. As per para 2.13 of Foreign Trade Policy (2015-2020), regarding “Clearance of Goods from Customs against Authorization”, the filing of Warehousing Bill of Entry, in case of ‘Restricted goods’ is not available - However, in the present case, the importer has imported the second hand goods and filed the Bill of Entry for Warehousing without having any valid authorization which violates the provisions of Para 2.13 of Foreign Trade Policy (2015-2020) as amended from time to time. It is observed that Regulation 16(1) provides for suspension of license of the Customs Broker where an inquiry against them is pending or contemplated. It is required only in ‘appropriate cases’ where ‘immediate action’ is necessary. Thus, the suspension of CB license is not a mandatory requirement in all cases. Suspension of CB license is resorted only in cases where ‘immediate action’ is warranted. It is observed that the goods in question have been received in the Port area on 23.02.22 and the Customs Broker has filed the warehousing Bill of Entry on 31.05.22. The Customs Broker was issued the CB Order 19.12.22 and the same was confirmed on 10.01.23. It is observed that after filing of the warehousing Bill of Entry by the Customs Broker, the SIIB (Port) has initiated the investigation against the imported consignment and issued a Show Cause Notice dated 19.02.2022 - the investigation in this case has already completed and there is no urgent necessity warranting restriction on the Customs Broker. Immediate suspension of the Customs Broker is warranted when there is an apprehension that the CB may interfere in the investigation or tamper with any evidence which will be detrimental to the investigation. There is no such apprehension in this case, as the investigation has already been completed and Notice issued. Thus, there is no urgent necessity to suspend the license of the CB. The clearing agent has filed the warehousing Bill of Entry, as the importer was not having the mandatory documents. Arranging the documents is the responsibility of the importer. There are no fault with the Customs Broker for not arranging the documents before importation of the second hand goods. As the mandatory documents could not be arranged in time, the Customs Broker has advised the importer to file Warehousing Bill of Entry to save demurrage charges. Even though warehousing is not permissible for second hand goods, they filed warehousing bill of entry only to minimize the loses and opted for First check. It is observed that they have opted for first check on their own and fully cooperated with the investigation by the SIIB (Port) - The enquiry proposed under Regulation 17 of CBLR, 2018 can go on even without suspension of the license. After completion of the enquiry, the Competent Authority will decide whether revocation of license is warranted or not in this case - there are no merits of the case as to whether the CB has violated Regulations 10(d), 10(e), 10(f) and 10(m) of CBLR, 2018 or not, as alleged in the notice. That decision will be taken by the competent authority after completion of the Inquiry proceedings. The suspension of the licence is not warranted in this case, at this stage, after completion of the investigation and issue of Show Cause Notice - Appeal allowed. Issues Involved:1. Validity of the suspension of the Customs Broker's license under Regulation 16(1) of CBLR, 2018.2. Whether immediate action was necessary under Regulation 16(1) of CBLR, 2018.3. Responsibility for arranging mandatory documents for the import consignment.Summary of Judgment:1. Validity of the Suspension of the Customs Broker's License:The Customs Broker (CB) was suspended under Regulation 16(1) of CBLR, 2018, on allegations of violating Regulations 10(d), 10(e), 10(f), and 10(m) while handling the import consignment of M/s. Eastern Light Industries Pvt. Ltd. The suspension was confirmed by the Commissioner of Customs, initiating further proceedings under Regulation 17(1) of CBLR, 2018.2. Necessity of Immediate Action:The Appellant argued that the suspension was unwarranted as the investigation had already been concluded, and a Show Cause Notice had been issued. They contended that immediate action under Regulation 16(1) is necessary only in appropriate cases, which was not applicable here given the time elapsed since the arrival and seizure of the goods. The Tribunal cited several precedents, including Rubee Air Freight Ltd. v. CC (Airport & Administration), Kolkata [2010 (257) E.L.T. 20 (Cal.)], which emphasized that immediate suspension should be exercised cautiously and only in exceptional cases.3. Responsibility for Arranging Mandatory Documents:The Appellant maintained that it was the importer's responsibility to arrange mandatory documents such as BIS Certificate, DGFT authorization, and NOC from MOEF. The Customs Broker advised the importer that the goods could not be cleared for home consumption without these documents and opted for warehousing to minimize demurrage charges. The Tribunal found that the Customs Broker had advised the importer properly and opted for First Check, showing no intention to violate regulations.Conclusion:The Tribunal concluded that the suspension of the Customs Broker's license was not warranted at this stage, as the investigation was already completed and a Show Cause Notice had been issued. The inquiry under Regulation 17 of CBLR, 2018, could proceed without the suspension of the license. The Tribunal set aside the impugned order suspending the license and allowed the appeal.