Customs broker license suspension revoked on appeal due to lack of violations.

The Tribunal allowed the appeal of M/s Total Clearance, revoking the suspension and subsequent revocation of their customs broker license under the Customs Brokers Licensing Regulations, 2018. The Tribunal found no merit in the charges of violations under specific regulations, emphasizing that the appellant had fulfilled their obligations and obtained necessary documentation. The order was set aside, and the appeal was allowed on 13/07/2023.

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Issues Involved:
1. Violation of Customs Brokers Licensing Regulations, 2018, specifically regulations 10(d), 10(n), and 1(4).
2. Proportionality of penalties imposed.
3. Validity of the licensing authority's findings and revocation of the customs broker license.

Summary:

1. Violation of Customs Brokers Licensing Regulations, 2018:
Proceedings were initiated against the appellant, M/s Total Clearance, under the Customs Brokers Licensing Regulations, 2018, for facilitating exports using fake purchase invoices and misuse of the 'importer-exporter code (IEC)' of 41 purported exporters. The appellant's customs broker license was suspended and later revoked, with the entire security deposit forfeited and a penalty imposed. The charges included breaches of regulations 10(d), 10(n), and 1(4), while charges under regulations 10(a), 10(c), and 10(m) were dropped.

2. Proportionality of Penalties:
The Tribunal found it surprising that despite some charges being unproven, no allowance was made for the dilution of the actual breach. Without delving into the proportionality of penalties, the Tribunal focused on the findings that led to the revocation of the license.

3. Evaluation of Licensing Authority's Findings:
- Regulation 1(4): The licensing authority contended that the customs broker admitted to procuring business through an intermediary and not handling goods in the port area, suggesting effective transfer of the license. However, reliance was placed on previous Tribunal decisions, which held that procuring business through an intermediary does not constitute sub-letting or transferring the license.

- Regulation 10(d): The customs broker is required to advise clients to comply with the Customs Act and report non-compliance. The licensing authority argued that the appellant failed to check client details and did not directly obtain authorization from the actual owner or purported exporter. The Tribunal referenced previous judgments, noting that the responsibility of customs brokers ends with fulfilling their obligations under the regulations, and physical verification of the exporter's address is not required.

- Regulation 10(n): The Tribunal cited previous decisions, emphasizing that the system of exports relies heavily on trust and facilitation. The customs broker's responsibility ends with fulfilling obligations under Regulation 10, and the burden of misuse of export promotion schemes cannot be placed solely on the customs broker.

Conclusion:
The Tribunal concluded that the appellant had obtained necessary documentation, and there was no evidence that the exporters did not exist at the given addresses or that the client had not been advised to comply with the Customs Act. The suspect transaction occurred before the goods were entered for export. Consequently, the Tribunal found no merit in the impugned order, set it aside, and allowed the appeal.

Order Pronounced:
The order was pronounced in the open court on 13/07/2023.

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