2024 (1) TMI 348 - AT - Customs

CESTAT revokes customs broker license suspension citing natural justice violation under CBLR 2018 Regulations 10(d) and 10(m)

CESTAT Mumbai allowed the appeal challenging suspension of customs broker license. The Principal Commissioner had suspended the license alleging ... Suspension of Customs Broker License - contravention of Regulations 10(d) and 10(m) of CBLR, 2018 - appellants CB did not declare the complete details of the imported goods and the mandatory declarations required under BIS, WPC certification, Legal Meteorology Packaged Commodities Rules - whether the appellant Customs Broker has fulfilled all his obligations as required under CBLR, 2013 or not? - violation of principles of natural justice. HELD THAT:- The impugned order dated 23.05.2023 has been passed by the Principal Commissioner of Customs (General) after taking into consideration the written submissions made by the appellants and the record of oral submission made at the time of personal hearing on 27.04.2023, for considering the charges of violations against them, before passing the impugned order. Thus, sufficient and reasonable opportunity was given to the appellants before passing an order, in respect of charges framed against them. Violation of Regulation 10(d) ibid - HELD THAT:- The appellants could not submit the complete details in respect of the imported goods. The facts also revealed that during an investigation by CIU, the appellants CB had submitted the BIS certificates and ETA (self-declaration) one time import permission in respect of few imported goods, which the customs authorities have found to be proper. This has also been recorded in paragraph 2.2 of the impugned order. In the absence of any document to prove that the appellants CB had purposefully mis-declared the description or other details of imported goods, it is difficult to fasten liability for the violation of Regulation 10(d) ibid on the appellants for not advising their clients or informing the Customs Authorities in respect of the details that was not furnished at the time of filing of bill of entry. Violation of Regulation 10(m) ibid - HELD THAT:- The appellants CB had filed the bill of entry on the basis of invoice and packing list, providing the details of brand name, model number, battery ratings/capacity, nature of goods such as neckband or wireless type earphone etc. Thus, the appellants CB has been careful and diligent in submitting the complete details inasmuch as the same are available in the invoice, packing list while submitting the bill of entry before the customs authorities. There is no evidence or any document to prove that the appellants CB contributed to the delay or inefficiency, in handling the import transaction. Thus, there are no merits or any evidence to prove that the appellants are violated the requirements or obligations under Regulations 10(m) ibid. It is also found that the appellants CB had specifically requested for cross examination of the importer and the persons whose statements were recorded by the Inquiry Officer on 07.02.2023. However, no reasons were given for declining the cross examination to the appellants - there is a failure in the Inquiry proceedings to comply with the requirement of providing natural justice under Regulation 17(4) ibid. In the case of M/S SHASTA FREIGHT SERVICES PVT. LTD. VERSUS PRL. COMMISSIONER OF CUSTOMS, HYDERABAD AND COMMISSIONER OF CUSTOMS, 2. COMMISSIONER OF CUSTOMS, O/O THE COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, HYDERABAD [2019 (9) TMI 363 - TELANGANA AND ANDHRA PRADESH HIGH COURT], the Hon’ble High Court of Telangana had clearly held the noncompliance with providing of opportunity of cross examination to a Customs broker in the inquiry proceedings as violation of principles of natural justice under 17(4) of the CBLR, 2018. There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revoking the CB license of the appellants; and for forfeiture of entire security deposit, inasmuch as there is no violation of Regulation 10(d) and 10(m) of the CBLR, 2018, and the findings in the impugned order is contrary to the facts on record. The impugned order set aside - appeal allowed in favor of appellant. Issues Involved:1. Violation of Regulations 10(d) and 10(m) of Customs Brokers Licensing Regulations (CBLR), 2018.2. Compliance with principles of natural justice under Regulation 17(4) of CBLR, 2018.Summary:Issue 1: Violation of Regulations 10(d) and 10(m) of CBLR, 2018The appellants, M/s JZN Logistics, were accused of contravening Regulations 10(d) and 10(m) of CBLR, 2018, based on an offence report from the Central Intelligence Unit (CIU) regarding imported goods in container No. TEMU 8525264. The Principal Commissioner of Customs (General), Mumbai-I, suspended the appellants' Customs Broker (CB) license and initiated inquiry proceedings. The inquiry report concluded that the appellants had violated the regulations, leading to the revocation of their CB license, forfeiture of the security deposit, and imposition of a penalty of Rs. 50,000.The appellants contended that they had made declarations based on documents provided by the importers and were unaware of any mis-declaration. They argued that they had diligently discharged their duties and had no connection with the violations of Customs law. The Tribunal found that the appellants had declared the description of the imported goods based on the invoices and packing lists provided by the importer. There was no evidence that the appellants had purposefully mis-declared the details of the imported goods. The Tribunal concluded that the appellants did not violate Regulation 10(d) and 10(m) as there was no evidence of delay or inefficiency on their part.Issue 2: Compliance with principles of natural justice under Regulation 17(4) of CBLR, 2018The appellants requested cross-examination of the importer and other persons whose statements were recorded by the Inquiry Officer, which was denied. The Tribunal found that denying the opportunity for cross-examination constituted a violation of the principles of natural justice. The Tribunal referred to the case of M/s Shastha Freight Services Pvt. Ltd., where the Hon'ble High Court of Telangana and the Supreme Court emphasized the importance of cross-examination in ensuring natural justice. The Tribunal also cited the case of Andaman Timber Industries, where the Supreme Court held that denying cross-examination when the statements are the basis of the order is a serious flaw, making the order a nullity.The Tribunal concluded that the failure to provide an opportunity for cross-examination in the inquiry proceedings was a violation of Regulation 17(4) of CBLR, 2018, and thus, the impugned order could not be legally sustained.Conclusion:The Tribunal set aside the impugned order, finding no merits in the revocation of the CB license, forfeiture of the security deposit, or imposition of a penalty. The appeal was allowed in favor of the appellants.