Customs Appellant not liable for reporting post-clearance offence. Punitive measures revoked, Rs. 50,000/- penalty upheld.

The court held that the Appellant was not liable for reporting an offence committed after goods were cleared from the Customs Station and stored in the bonded warehouse. The court found no violations of specific regulations under the Customs Brokers Licensing Regulations, 2018 and 2013. The punitive measures imposed on the Appellant were deemed disproportionate, leading to the revocation of the license and forfeiture of the security deposit being set aside. The court upheld a penalty of Rs. 50,000/- and allowed the Appellant to apply for a new license. The appeal was allowed in favor of the Appellant.

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Issues Involved:
1. Whether the Appellant is liable for reporting an offence committed in relation to goods stored in the bonded warehouse after the professional role of the Customs Broker had ended.
2. Whether the Appellant violated specific regulations under the Customs Brokers Licensing Regulations, 2018 (CBLR, 2018) and Customs Brokers Licensing Regulations, 2013 (CBLR, 2013).
3. Whether the punitive measures imposed on the Appellant were proportionate.

Summary:

Issue 1: Liability for Reporting Offence Post Professional Role
The court examined if the Appellant, under CBLR, 2018 read with CBLR, 2013, was liable for reporting an offence committed after the goods had been cleared from the Customs Station and stored in the bonded warehouse. The court concluded that the Appellant's duty ended once the goods were cleared from the Customs Station and reached the bonded warehouse. The Appellant was not responsible for the illegal diversion of goods by the importer firms into the domestic market without paying customs duty. The court held that the Appellant could not be held liable for the personal acts and omissions of the importer firms after the clearance of goods from the Customs Station.

Issue 2: Violation of Specific Regulations
The court analyzed the alleged violations of various regulations:

- Regulation 10(b) of CBLR, 2018 read with 11(b) of CBLR, 2013: The court found no material on record to indicate that the Appellant had not carried out the work of filing the Bills of Entry (B/Es) either personally or through his authorized employee. Therefore, there was no violation of this regulation.

- Regulation 10(d) of CBLR, 2018 read with 11(d) of CBLR, 2013: The court held that the Appellant was not responsible for advising the importer firms on re-export obligations after the goods were cleared from the Customs Station. The duty to report non-compliance was limited to the documents submitted by the Customs Broker for clearance at the Customs Station.

- Regulation 10(e) of CBLR, 2018 read with 11(e) of CBLR, 2013: The court found no evidence that the Appellant had given incorrect information to the importer firms. The illegal actions of the importer firms after the clearance of goods did not attract a violation of this regulation by the Appellant.

- Regulation 10(n) of CBLR, 2018 read with 11(n) of CBLR, 2013: The court noted that the Appellant had verified the Importer Exporter Code (IEC) and the physical addresses of the importer firms. The court referenced the judgment in Kunal Travels (Cargo) v. Commissioner of Customs (Import & General), which held that a Customs Broker is not expected to conduct a background check of the importer/client. Therefore, there was no blatant violation of this regulation.

Issue 3: Proportionality of Punitive Measures
The court considered the proportionality of the punishment imposed on the Appellant. It noted that the Appellant's Customs Broker License had been revoked for over 4.5 years, which was a severe punishment. The court found that the revocation of the license and forfeiture of the security deposit were disproportionate to the Appellant's failure to collect KYC documents. The court set aside the revocation of the license and forfeiture of the security deposit but upheld the penalty of Rs. 50,000/-.

Conclusion:
The appeal was allowed in favor of the Appellant. The court set aside the revocation of the license and forfeiture of the security deposit, upheld the penalty of Rs. 50,000/-, and allowed the Appellant to apply for a new license.

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