2024 (8) TMI 964 - HC - Customs

Appeal dismissed; customs broker license revoked and security deposit forfeited for advising mis-declaration and failing compliance advice

The HC dismissed the appeal, upholding revocation of the customs broker license and forfeiture of the security deposit. The court accepted factual ... Forefeiture of security deposit - goods sought to be cleared, were 'blank guns' which could have been modified into lethal weapons jeopardizing the National Security - HELD THAT:- In the order-in-original respondent had given a factual finding against appellant holding that appellant was responsible to advise the Importer to follow rules and regulations governing clearance of the imported goods and any non-compliance should have been brought to the notice of the Customs Authorities. There is also a factual finding that appellant had suggested to the Importer to mis-declare the imported goods in order to aid and abet the Importer in circumventing the requirement under both Foreign Trade Policy and the Arms Act, 1959 read with the Arms Rules, 2016 as amended. There is a factual finding that appellant was having knowledge of such mis-declaration and accordingly mis-classification under CTH 9503 being 'Blank Firing Guns' and required DGFT license under the import policy and license under the Arms Act, 1959 read with Arms Rules, 2016. This factual finding has been accepted by the Tribunal. Therefore, since it was only on the basis of factual finding, thus, no substantial questions of law arise - the revocation of the Customs Broker License and the forfeiture of the security deposit upheld - appeal dismissed. Issues:1. Interpretation of findings regarding the security deposit forfeiture.2. Consideration of forensic science lab reports.3. Justification for security deposit forfeiture.4. Allegations of misdeclaration and misclassification.5. Revocation of Customs Broker License.6. Acceptance of factual findings by the Tribunal.Analysis:1. The appellant, a Customs Broker, assisted an Importer in clearing consignments of metal toy guns. The goods were examined, and reports from forensic laboratories confirmed they were non-lethal and not covered under the Arms Act. Several consignments were cleared under the appropriate tariff heading without issues. However, a later consignment faced confiscation due to alleged misdeclaration and misclassification under the new Arms Rules 2016.2. The appellant appealed the revocation of their Customs Broker License, arguing against the forfeiture of a security deposit. The Tribunal's order upheld the forfeiture, citing the potential risk posed by the blank guns that could be modified into lethal weapons, impacting national security. The Tribunal deemed the forfeiture appropriate, considering the failure to comply with import policy requirements.3. The Tribunal also found the appellant responsible for advising the Importer on compliance with regulations and alleged involvement in misdeclaration to circumvent legal requirements. The Tribunal accepted these factual findings, leading to the dismissal of the appeal against the license revocation. The Tribunal concluded that no substantial legal questions arose solely based on factual findings.4. The judgment highlights the importance of Customs Brokers ensuring compliance with regulations and advising Importers correctly. The decision emphasizes the severe consequences, such as license revocation and security deposit forfeiture, for non-compliance and misdeclaration in customs clearance processes.5. Ultimately, the appeal was dismissed, affirming the revocation of the Customs Broker License and the forfeiture of the security deposit. The judgment underscores the significance of upholding legal and regulatory standards in customs clearance activities to prevent risks to national security and ensure adherence to import policies and licensing requirements.