Customs broker penalty fails where employees acted without authorisation and no active role by the broker was proved.

Penalty on a customs broker under Regulation 18 of the Customs Brokers Licensing Regulations, 2013 was not sustainable where the prohibited acts were carried out by employees on their own, without the broker's knowledge, approval or authorisation. The record showed that the employees handled new clients and filed bills of entry independently, and their statements confirmed that the managing director had not authorised the conduct. As no further active role by the broker was established in the investigation, and disciplinary action had already been taken against the employees, the basis for fastening liability on the broker was not made out. The penalty was therefore set aside.

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Issues: Whether penalty imposed on the customs broker under Regulation 18 of the Customs Brokers Licensing Regulations, 2013 was sustainable when the prohibited acts were committed by employees without the broker's knowledge or authorisation.

Analysis: The material on record showed that the employees independently handled new clients and filed bills of entry without informing or obtaining approval from the appellant. Their statements admitted that the acts were done without authorisation from the managing director. The record also indicated that the investigation did not produce evidence of any more active role by the appellant beyond the conduct of the two employees, and that disciplinary action had been taken against them by terminating their services. In these circumstances, the basis for fastening liability on the customs broker was not made out.

Conclusion: The penalty on the appellant was not justified and was set aside.

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