Tribunal upholds Rs.50,000 maximum penalty under Reg.22 CBLR 2013; revocation or forfeiture disallowed under Reg.20(7)

CESTAT CHENNAI - AT upheld the Commissioner's order imposing the maximum permissible penalty of Rs.50,000 under Reg.22 of CBLR, 2013, and refused revocation of the customs broker licence or forfeiture of security. The Tribunal found Regulation 20(7) permits either revocation or penalty (capped at Rs.50,000) but not both, and the Review Committee could not override the Commissioner's statutory discretion. On facts, complicity in smuggling was not established for the broker under review and the enquiry report largely exonerated the broker; applying proportionality, the Revenue's appeal was dismissed.

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Issues: (i) Whether the penalty of Rs.50,000/- imposed under Regulation 18/20(7)/22 of the Customs Brokers Licensing Regulations, 2013 is commensurate with the offence and whether revocation of the customs broker licence and forfeiture of security deposit can be imposed in the facts of the case.

Analysis: The statutory scheme under Regulations 20(7) and 22 of the Customs Brokers Licensing Regulations, 2013 authorizes the Commissioner to, after consideration of the inquiry report and representations, either revoke the licence or impose a penalty not exceeding the amount prescribed in Regulation 22; the scheme does not permit both revocation/forfeiture and penalty beyond the prescribed cap. The enquiry report, relevant findings on verification failures, and the limits of the delegated power under the Regulations are to be read together with the principle of proportionality when assessing whether extreme sanctions like revocation of licence and forfeiture of security are warranted. Where the adjudicating authority has imposed the maximum monetary penalty allowed by Regulation 22 after considering the inquiry report and circumstances, superior review cannot direct a sanction beyond the statutory mandate.

Conclusion: The penalty of Rs.50,000/- imposed under the Regulations is within the statutory power and, having regard to proportionality and the facts including the enquiry officer's report, revocation of licence and forfeiture of security deposit are not warranted; the appeal against the impugned order is dismissed in favour of the Customs Broker.

Ratio Decidendi: Where a statute authorizes either revocation of licence or imposition of monetary penalty up to a statutory maximum, administrative or review authorities cannot require or direct sanctions beyond that statutory scheme; the decision to impose the maximum permissible penalty is valid and must be assessed through the lens of proportionality.

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