Customs Broker licence compliance: failure to admit recorded statements nullified alleged breaches, leading to order being set aside for lack of evidence

The text addresses enforcement of customs broker licensing obligations where disciplinary findings rested solely on recorded statements that were not admitted as evidence by the Commissioner; consequently those statements were deemed irrelevant and could not sustain findings of breaches of licensing regulations. Because the person(s) who made the statements were neither examined nor their statements formally relied upon in the show cause notice, alleged violations relating to due diligence, supervision, duty to inform clients and vicarious liability were not established and the impugned order was set aside.

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Issues: (i) Whether, on the available evidence, the appellant violated Regulations 10(d), 10(e), 10(f), 10(m) and 13(12) of the Customs Broker Licencing Regulations, 2018; (ii) Whether the penalty and forfeiture imposed on the appellant are proportionate to any established violations.

Issue (i): Whether the appellant violated Regulations 10(d), 10(e), 10(f), 10(m) and 13(12) of the Customs Broker Licencing Regulations, 2018.

Analysis: The impugned findings of violation are founded predominantly on statements recorded from various importers under section 108 of the Customs Act, 1962. For such statements to be admissible and relevant in administrative proceedings, the procedure in section 138B of the Customs Act must be followed, which requires examination of the declarant as a witness and an express admission of the statement as evidence by the adjudicating authority. The adjudicating authority did not examine the declarants as witnesses nor record the requisite opinion admitting those statements as evidence. No other independent evidence has been shown to substantiate the violations relied upon.

Conclusion: The findings of violation of Regulations 10(d), 10(e), 10(f), 10(m) and 13(12) cannot be sustained and are decided in favour of the appellant.

Issue (ii): Whether the penalty and forfeiture imposed are proportionate to any established violations.

Analysis: As the impugned order's substantive findings of breaches are unsustained for want of admissible evidence, there is no basis on record to uphold the penalty, forfeiture or revocation imposed on the appellant. The proportionality of penalty is therefore considered in the context that the underlying violations have not been proved by admissible evidence.

Conclusion: The penalty, forfeiture and revocation imposed are not sustained; this conclusion is in favour of the appellant.

Final Conclusion: The impugned order revoking the customs broker licence and imposing penalty and forfeiture is set aside and the appeal is allowed, with consequential relief to the appellant.

Ratio Decidendi: Statements recorded under section 108 of the Customs Act, 1962 are not admissible in administrative adjudication unless the adjudicating authority examines the declarant as a witness and expressly admits the statement as evidence under section 138B; absence of such procedural compliance renders findings based solely on those statements unsustainable.

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