Bona fide exemption claim based on importer documents cannot justify broker licence revocation; appeal allowed and penalties set aside.

Revocation of a customs broker licence, forfeiture of security and penalty predicated solely on Regulation 10(d)/11(d) was set aside because the record did not establish primary liability for an ineligible exemption claim. The tribunal found inconsistent application of mind by the licensing authority, noted prior departmental clearances and importer-documented exemption claims, and applied precedent that bona fide classification or exemption claims based on importer documents and past clearances do not equate to mis-declaration warranting licence revocation; the impugned sanctions were therefore quashed.

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Issues: Whether the Customs Broker breached obligations under Regulation 10(d) of the Customs Brokers Licensing Regulations, 2018 (and corresponding Regulation 11(d) of the 2013 Regulations) such as to justify revocation of the broker's licence, forfeiture of the security deposit and imposition of penalty.

Analysis: The Tribunal examined the impugned order and the inquiry record and found that only the single charge under Regulation 10(d)/11(d) was confirmed while charges under Regulations 10(e)/11(e) and 10(f)/11(f) were dropped by the licensing authority. The Tribunal identified contradictions in the licensing authority's findings-on one hand criticising the broker for failing to verify eligibility and notify authorities, and on the other treating the matter as involving interpretation of exemption notifications discoverable only by departmental examination. The Tribunal noted that the port customs authorities had previously cleared similar consignments under the exemption and that the original offence report's penal action against the broker was dropped; the importer paid differential duty when challenged. The Tribunal also considered delay in inquiry and noted litigation-related causes and prior authority holding timelines to be directory. Precedent was applied to the effect that a bona fide classification or claim of exemption based on importer documents and past clearances cannot be equated with a mis-declaration warranting revocation. On this basis the Tribunal concluded that the record did not support fastening primary liability on the broker for the ineligible exemption claim and that the licensing authority had not applied mind consistently in sustaining the single charge.

Conclusion: The impugned order confirming violation of Regulation 10(d)/11(d) and revoking the broker's licence, forfeiting the security deposit and imposing penalty is unsustainable; the appeal is allowed in favour of the appellant and the impugned order is set aside.

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