Customs broker license revocation overturned due to lack of evidence linking broker to export over-valuation fraud

CESTAT Kolkata set aside the Commissioner's order revoking a customs broker's license for alleged over-valuation of export goods. The tribunal found no conclusive evidence linking the broker to the fraud, noting that export value declaration is the exporter's prerogative, not the broker's. The department failed to establish the broker's involvement through positive evidence, relying instead on unverified testimony and presumptions. The tribunal ruled that allegations under CBLR 2018 were misdirected and unfounded, annulling the license revocation and associated penalties.

---

---

Issues involved: Alleged involvement in export fraud, Violation of Customs Broker Licensing Regulations 2018

Alleged involvement in export fraud:
The appellant, a Customs Broker, was accused of being involved in an export fraud scheme where certain consignments were over-valued to defraud the government. The investigations revealed discrepancies in the valuation of goods exported by M/s. Gupta Vyapaar, leading to suspicions of fraud. The appellant denied any knowledge or involvement in the fraudulent activities carried out by the exporter.

Violation of Customs Broker Licensing Regulations 2018:
A show cause notice was issued to the appellant alleging violations of various regulations under the Customs Broker Licensing Regulations 2018. The appellant was charged with failure to comply with obligations such as advising clients on compliance with customs regulations, ensuring speedy and efficient discharge of duties, verifying client details, and cooperating with customs authorities. The department accused the appellant of not exercising proper supervision over employees and being involved in facilitating export fraud.

Judgment:
The tribunal considered the contentions of both sides and found that there was no conclusive evidence linking the appellant to the export fraud. It was noted that the Customs Broker's role is limited to filing customs documents based on information provided by the exporter, and the responsibility for declaring export values lies with the exporter. The tribunal found no evidence of malafide intent on the part of the Customs Broker and concluded that the allegations against the appellant were misdirected and mis-founded.

The tribunal emphasized the importance of positive and reliable evidence to establish charges against the Customs Broker and highlighted the lack of substantial evidence in this case. It was concluded that the department failed to make a sustainable case of violation of the Customs Broker Licensing Regulations 2018. As a result, the tribunal quashed the order revoking the Customs Broker license and provided the appellant with all consequential benefits as per the law.

This judgment was pronounced in open court on 01.12.2023 by the members of the tribunal, Mr. Ashok Jindal (Member - Judicial) and Mr. Rajeev Tandon (Member - Technical).

---