Customs broker license suspended for facilitating red sanders smuggling by mis-declaring endangered species as iron materials

CESTAT New Delhi upheld the suspension of a customs broker's license for facilitating smuggling of red sanders, an endangered species, by mis-declaring them as decorative iron materials. The broker violated multiple regulations by filing shipping bills without authorization from the exporter, failing to verify client identity, and sub-letting his license to facilitate the illegal export scheme. The tribunal found these violations constituted deliberate misconduct rather than innocent errors, warranting license suspension to maintain customs control integrity.

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Issues:
Violation of Customs Broker Licensing Regulations 2018 - Regulations 10(a), 10(d), 10(e), and 10(n) by the appellant. Proportionality of punishment imposed on the appellant.

Analysis:
The appeal was filed to challenge the Order in Original (OIO) revoking the Customs Broker's license, forfeiting the security deposit, and imposing a penalty on the appellant under Regulations 14 and 18 of the Customs Broker Licensing Regulations 2018 (CBLR). The investigation revealed that the appellant attempted to export prohibited goods (Red Sanders) mis-declared as decorative iron materials without proper authorization. The appellant filed the shipping bill in the name of another entity without their knowledge or authorization, leading to violations of CBLR regulations.

The appellant was found to have violated Regulation 10(a) by not obtaining authorization from the entity in whose name the shipping bill was filed. Additionally, Regulation 10(d) was breached as the appellant failed to advise the client on compliance and colluded in filing a benami shipping bill. Regulation 10(n) was also violated as the appellant did not verify the identity of the client and filed the bill behind their back to facilitate smuggling. The appellant's actions were deliberate, involving sub-letting the license to another individual for a monthly fee.

The judgment emphasized that such violations undermine the control system by Customs, enabling easy smuggling of prohibited goods. Allowing Customs Brokers to file benami bills without client knowledge poses a significant risk. The appellant's deliberate scheme of sub-letting the license for smuggling purposes was deemed a serious offense. Consequently, the impugned order revoking the license, forfeiting the deposit, and imposing a penalty was upheld, and the appeal was dismissed. The judgment highlights the importance of upholding regulations to prevent illicit activities facilitated by Customs Brokers.

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