2023 (4) TMI 1032 - AT - Customs

Customs broker's license revocation overturned, penalty reduced; Covid-19 impact considered

M/s N.S. Square Clearing Agency Versus Commissioner of Customs, Amritsar

The Tribunal set aside the revocation of the customs broker's license and reduced the penalty from Rs. 50,000 to Rs. 10,000. The appellant's argument that ... Revocation of Customs Broker License - levy of penalty - import of old and used medical equipments i.e. ventilators - prohibited goods as per Regulation 12(6) of Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, or not - wrongful information given to client/importer or not - HELD THAT:- The revocation of license has been done on the basis of alleged violation of Regulation 10 (d) & (e) of CBLR, 2018, wherein the customs brokers were required to adhere to the provisions of Customs Act, allied acts and Rule & Regulations made thereunder and to advice their client accordingly and to bring out any such non-compliance to the notice of the Deputy or Assistant Commissioner of Customs and that the customs broker should exercise due diligence to ascertain to correct information on his part to the clients. No case is made for alleged violation of Regulation 10 (d) & (e) ibid, in as much as, no evidence to prove that he has given a wrongful information to the clients/importers; at the most, there can be an alleged violation of Regulation 10 (d) as much as at the time of import of impugned goods, there is a prohibition under law for such imports. However, for the same reason, proceedings have been initiated against the importers and have been dropped - the omissions and commissions of the Customs Broker have been mitigated; in this background, continuation of proceedings against the customs brokers is unwarranted as the goods which were prohibited at the time of import were permitted to be cleared at a later stage due to an emergency situation prevailing due to Covid-19 pandemic. The commissions or omissions, if any, by the appellant, have not resulted in any contraventions of the Law or evasion of Duty, as the very same authorities, who have placed the prohibition on the impugned goods, have permitted the same at a later date. As such, it is found that harsh an action, such as revocation of license is neither justified nor substantiated. The punitive action to the extent of revocation of license is very harsh and certainly on higher side. Any punishment should be commensurate with omission or commission to meet the ends of justice. The revocation needs to be set aside and a suitable penalty can be imposed on them so that they will be careful in future. The impugned order is modified by setting aside the revocation of customs broker license and by reducing the penalty imposed to Rs. 10,000/- - Appeal allowed in part. Issues:The judgment involves the revocation of a customs broker's license for alleged violation of regulations regarding the clearance of imported old and used medical equipment, specifically ventilators, under the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016.Issue 1: Alleged violation of Regulation 10 (d) & (e) of CBLR, 2018The appellant filed bills of entry for clearance of imported old and used medical equipment, ventilators, which were alleged to be prohibited under Regulation 12(6) of Hazardous and Other Wastes Rules, 2016. The proceedings against the importers were dropped due to a Ministry Memorandum relaxing the rules in view of the Covid-19 situation, but actions were taken against the appellant customs broker. The appellant argued that the proceedings against them were unjustified as the importers were exonerated, and the imports were permitted later. They contended that the revocation of their license was improper and based on procedural errors. The Revenue argued that the appellant violated Regulation 10 (d) & (e) by not ensuring compliance with import-export policies and failing to provide specific examples of similar imports happening nationwide.Analysis:The Tribunal examined Regulation 10 (d) & (e) of CBLR, 2018, which mandates customs brokers to advise clients on compliance with laws and exercise due diligence in providing accurate information. The Ministry's Memorandum allowed the import of used critical care medical equipment due to the Covid-19 situation, indicating a relaxation in the rules. The Tribunal found no evidence of the appellant providing incorrect information to clients and noted that the prohibition on the imported goods was later lifted. It concluded that the revocation of the license was unwarranted, considering the emergency situation during the pandemic and the subsequent clearance of the goods. The Tribunal deemed the penalty of Rs. 50,000 too harsh and reduced it to Rs. 10,000, emphasizing that any punishment should be proportionate to the offense.Outcome:The Tribunal modified the impugned order by setting aside the revocation of the customs broker's license and reducing the penalty imposed. The appeal was disposed of with the revised penalty of Rs. 10,000.