Customs broker license revoked for subletting to unauthorized persons, security deposit forfeited, penalty reduced

M/s Sanjay Jain Versus Commissioner of Customs, Ludhiana

M/s Sanjay Jain Versus Commissioner of Customs, Ludhiana - TMI Issues Involved:
1. Revocation of Customs Broker License
2. Forfeiture of Security Deposit
3. Imposition of Penalty
4. Alleged Violation of CBLR, 2018 Regulations

Issue-wise Detailed Analysis:

1. Revocation of Customs Broker License:
The appellant's Customs Broker License was revoked due to alleged violations of the Customs Broker Licensing Regulations (CBLR), 2018. The appellant was accused of facilitating the smuggling of red sanders disguised as Basmati Rice. The container, intercepted at Mundra Port, was found to contain prohibited red sanders instead of the declared goods. The appellant argued that he complied with all regulations, verified KYC documents, and did not share his ID or password. However, the Tribunal found that the appellant was casual in his approach, allowed unauthorized persons to use his license, and did not conduct business personally or through an authorized representative. The Tribunal upheld the revocation, emphasizing the importance of trust and responsibility in the role of a Customs Broker.

2. Forfeiture of Security Deposit:
The security deposit of the appellant was forfeited as part of the penalty for the violations. The Tribunal noted that the appellant allowed his license to be used by others for financial gain, which constituted a breach of trust. The appellant's casual behavior and failure to supervise his employees adequately justified the forfeiture. The Tribunal upheld the forfeiture, aligning with the principle that such actions are detrimental to the interests of revenue and exporters.

3. Imposition of Penalty:
A penalty of Rs. 50,000/- was initially imposed on the appellant. The appellant contended that the penalty was unwarranted as he had not violated any regulations intentionally. The Tribunal found that while the revocation of the license and forfeiture of the security deposit were justified, the penalty should be commensurate with the omission or commission. The Tribunal reduced the penalty to Rs. 10,000/-, considering the revocation and forfeiture as sufficient punishment.

4. Alleged Violation of CBLR, 2018 Regulations:
The appellant was accused of violating multiple regulations under CBLR, 2018, including:
- Regulation 10(b): Sharing of ID/password with unauthorized persons.
- Regulation 10(d): Failure to verify the identity of the exporter and collect documents personally.
- Regulation 10(n): Inadequate verification of KYC documents.
- Regulation 13(3): Allowing unauthorized persons to sign documents.
- Regulation 13(12): Failure to exercise proper supervision.

The appellant argued that he verified the KYC documents online and did not share his ID/password. He also claimed that the consignment was sealed and supervised by Customs, mitigating his responsibility. However, the Tribunal found evidence of casual behavior and financial transactions indicating that the appellant allowed unauthorized persons to use his license. The Tribunal concluded that the appellant's actions constituted a breach of trust and upheld the findings of the adjudicating authority.

Conclusion:
The Tribunal upheld the revocation of the Customs Broker License and the forfeiture of the security deposit, citing the appellant's casual approach and breach of trust. The penalty was reduced from Rs. 50,000/- to Rs. 10,000/-, considering the revocation and forfeiture as sufficient punishment. The Tribunal emphasized the importance of the Customs Broker's role and the trust reposed in them by both the importers/exporters and the government agencies.