Customs broker license revocation set aside as disproportionate despite CBLR 2018 violations for negligence not misconduct

CESTAT NEW DELHI held that customs broker's license revocation was disproportionate despite violations of CBLR 2018 regulations 10(a), 10(b), and 10(e). The tribunal found violations regarding unauthorized representation and inadequate due diligence in checking dual packing lists, but rejected violations of regulations 10(d), 10(j), 10(k), and 10(q). Court determined violations stemmed from negligence rather than intentional misconduct. License revocation was set aside as disproportionate punishment that would deprive appellant of livelihood, while security deposit forfeiture and penalty were upheld. Appeal allowed in part.

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Issues Involved:
1. Violation of Regulation 10(a) of Customs Brokers Licensing Regulations, 2018 (CBLR, 2018)
2. Violation of Regulation 10(b) of CBLR, 2018
3. Violation of Regulation 10(d) of CBLR, 2018
4. Violation of Regulation 10(e) of CBLR, 2018
5. Violation of Regulation 10(j), 10(k), and 10(q) of CBLR, 2018

Summary:

Issue 1: Violation of Regulation 10(a) of CBLR, 2018
The appellant failed to produce any authorization from the exporter, M/s. Batra Enterprises, for Shri Pran Shanker Jha, an employee of their freight forwarder, to act as an authorized representative. This absence of authorization was deemed sufficient to prove the violation of Regulation 10(a).

Issue 2: Violation of Regulation 10(b) of CBLR, 2018
The appellant allowed an unauthorized person, Shri Pran Shanker Jha, to file shipping bills from outside the customs station. The regulation mandates that business related to customs must be transacted either personally or through an authorized employee approved by the Deputy Commissioner of Customs or Assistant Commissioner of Customs. This unauthorized transaction confirmed the violation of Regulation 10(b).

Issue 3: Violation of Regulation 10(d) of CBLR, 2018
The appellant was not found to have knowledge of any intentional changes in the documents forwarded by the exporter. The mistake in the invoice cum packing list was acknowledged as a clerical error by the exporter's staff. The Tribunal held that the appellant had no means to verify the quantity or weight of the goods sealed by the exporter. Therefore, the violation of Regulation 10(d) was not sustainable.

Issue 4: Violation of Regulation 10(e) of CBLR, 2018
The appellant did not exercise due diligence to ascertain the correctness of the information, as evidenced by the existence of two different sets of invoices. Despite the clerical error acknowledged by the exporter, the appellant failed to verify the discrepancy. Thus, the Tribunal confirmed the violation of Regulation 10(e).

Issue 5: Violation of Regulation 10(j), 10(k), and 10(q) of CBLR, 2018
The Tribunal found no evidence that the appellant refused access to, concealed, or destroyed any documents. The appellant maintained up-to-date records and cooperated with the customs authorities. Hence, the violations of Regulations 10(j), 10(k), and 10(q) were not substantiated.

Conclusion:
The Tribunal set aside the findings related to violations of Regulations 10(d), 10(j), 10(k), and 10(q). However, it confirmed the violations of Regulations 10(a), 10(b), and 10(e). The Tribunal held that while the appellant was guilty of certain violations, these were not grave enough to justify the revocation of the customs license. Instead, the Tribunal upheld the order of forfeiting the security deposit and imposing a penalty but set aside the order of revocation of the license. The appeal was partly allowed.

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