Customs broker license revocation partially overturned, security deposit forfeiture reduced from Rs.15,000 to Rs.5,000 under Regulation 10(e)

CESTAT Mumbai partially allowed the appeal regarding customs broker license revocation and security deposit forfeiture. The tribunal found that the customs broker violated only Regulation 10(e) of CBLR 2018 by failing to cross-verify tariff classification despite having documents showing correct HS code. Violations of Regulations 10(d) and 10(m) were not established as the broker filed bills of entry per importer's documents without knowledge of mis-declaration and cooperated during investigations. The tribunal reduced the security deposit forfeiture from Rs.15,000 to Rs.5,000, finding partial forfeiture appropriate for the single violation under Regulation 10(e).

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Issues Involved:
1. Violation of Regulations 13(d), 13(e), and 13(n) of CHALR, 2004 corresponding to 10(d), 10(e), and 10(m) of CBLR, 2018.
2. Partial forfeiture of the security deposit.

Summary:

Issue 1: Violation of Regulations 13(d), 13(e), and 13(n) of CHALR, 2004/10(d), 10(e), and 10(m) of CBLR, 2018

The appellants, M/s Kismat Clearing Agency, were accused of violating Regulations 13(d), 13(e), and 13(n) of CHALR, 2004, corresponding to 10(d), 10(e), and 10(m) of CBLR, 2018. The specific violations included failure to advise the client to comply with the provisions of the Act, lack of due diligence in ascertaining the correctness of information, and inefficiency in discharging duties.

The Tribunal found that the appellants had declared the imported goods based on documents provided by the importer and were unaware of any mis-declaration. The violations were discovered only after specific information was received by NSPU, and the appellants could not be held responsible for the mis-declaration and undervaluation of goods. Therefore, the violation of Regulation 10(d) was not sustainable.

Regarding Regulation 10(e), the Tribunal agreed with the Commissioner that the appellants did not exercise due diligence in verifying the tariff classification mentioned in the documents provided by the importer. Thus, the violation of Regulation 10(e) was upheld.

For Regulation 10(m), the Tribunal found no evidence to support the claim that the appellants were inefficient in their duties. The customs duty was paid on time, and the appellants cooperated with the investigation. Therefore, the violation of Regulation 10(m) was not legally sustainable.

Issue 2: Partial Forfeiture of Security Deposit

The Commissioner of Customs (General) had ordered partial forfeiture of the security deposit of Rs.15,000/- for the violations. The Tribunal found that the appellants' failure to act proactively in verifying the correct HS code for the imported goods justified a partial forfeiture of Rs.5,000/-. The Tribunal modified the impugned order to reflect this partial forfeiture, deeming it reasonable and commensurate with the violation.

In conclusion, the appeal was allowed in favor of the appellants, with a modification to the impugned order to partially forfeit the security deposit to the extent of Rs.5,000/-.

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