Tribunal upholds penalty for Custom Broker, stresses importance of due diligence and compliance

The Tribunal set aside the revocation of the Custom Broker Licence but upheld the forfeiture of the security deposit and the imposition of the Rs. 50,000/- penalty, emphasizing the importance of due diligence and compliance with KYC norms by Custom Brokers.

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Issues Involved:
1. Revocation of Custom Broker Licence
2. Forfeiture of Security Deposit
3. Imposition of Penalty

Summary:

1. Revocation of Custom Broker Licence:
The appeal challenges the Order-in-Original dated 28.06.2022, which revoked the Custom Broker Licence of the appellant under Regulation 17 of CBLR 2018. The revocation was based on the appellant's involvement in a fraudulent import case where a consignment marked for 50% examination was cleared without proper customs examination and duty payment. The Ld. Commissioner found that the Custom Broker failed to verify the Importer Exporter Code (IEC) and other KYC norms, as mandated by Regulation 10(n) of CBLR 2018. The appellant argued that the inquiry was conducted in violation of Regulation 17(4) of CBLR 2018, as they were not given the opportunity to cross-examine certain individuals whose statements were relied upon. The Tribunal concluded that while the appellant failed to perform due diligence, revocation of the licence was not warranted and set aside the revocation.

2. Forfeiture of Security Deposit:
The Ld. Commissioner also ordered the forfeiture of the security deposit made by the Custom Broker at the time of obtaining the licence, under Regulation 14 of CBLR 2018. The Tribunal upheld the forfeiture, noting that the appellant's failure to comply with KYC norms and their involvement in the fraudulent clearance of the consignment justified this action.

3. Imposition of Penalty:
A penalty of Rs. 50,000/- was imposed on the appellant under Regulation 18 read with Regulation 14 of CBLR 2018. The appellant contested the penalty, arguing that the inquiry was flawed and that they were not involved in the clandestine removal of goods. The Tribunal, however, found that the appellant's conduct, including the failure to verify KYC documents and connivance with customs officials, warranted the penalty. The Tribunal confirmed the imposition of the Rs. 50,000/- penalty.

Conclusion:
The Tribunal set aside the revocation of the Custom Broker Licence but upheld the forfeiture of the security deposit and the imposition of the Rs. 50,000/- penalty, emphasizing the importance of due diligence and compliance with KYC norms by Custom Brokers.

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