Customs broker compliance lapses sustained, but no proof of collusion; forfeiture without revocation upheld.

Supervisory and verification lapses by a customs broker were treated as proved violations of the Customs Brokers Licensing Regulations, 2013 because the record showed inadequate oversight of intermediaries and insufficient diligence in verifying exporters and IEC holders. The evidence, however, did not establish deliberate collusion, illegal gratification, or conscious participation in the alleged drawback fraud. On that footing, forfeiture of the security deposit without revocation of the licence was sustained under the regulator's discretion, and the lesser penalty was not interfered with.

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Issues: (i) Whether violations of Regulations 11(a), 11(b), 11(n) and 17(9) of the Customs Brokers Licensing Regulations, 2013 were proved on the record; (ii) Whether forfeiture of security deposit without revocation of licence under Regulation 20(7) of the Customs Brokers Licensing Regulations, 2013 called for interference.

Issue (i): Whether violations of Regulations 11(a), 11(b), 11(n) and 17(9) of the Customs Brokers Licensing Regulations, 2013 were proved on the record?

Analysis: The materials, including the investigation record and statements recorded under Section 108 of the Customs Act, 1962, showed that the customs work connected with the disputed exports was handled through inadequately supervised intermediaries. The record also disclosed failure to verify exporters and IEC holders with the diligence required under the licensing regulations. At the same time, the evidence did not conclusively establish deliberate collusion, receipt of illegal gratification, or conscious participation in the alleged drawback fraud.

Conclusion: The violations of Regulations 11(a), 11(b), 11(n) and 17(9) were sustained, but only as serious lapses in supervision, due diligence and verification, not as proved deliberate fraud.

Issue (ii): Whether forfeiture of security deposit without revocation of licence under Regulation 20(7) of the Customs Brokers Licensing Regulations, 2013 called for interference?

Analysis: Regulation 20(7) confers discretion on the adjudicating authority to impose a lesser consequence instead of revocation depending on the gravity of the proved lapse. On the facts, the authority had already considered the inquiry report and surrounding circumstances and, while finding violations, chose forfeiture of security deposit instead of revocation. The departmental challenge to enhance the punishment was therefore not sustainable, and the broker was also not entitled to total exoneration.

Conclusion: The discretionary order of forfeiture without revocation was upheld and no interference was called for.

Final Conclusion: The common order left the findings of regulatory violation intact while sustaining the lesser penalty of forfeiture and declining revocation of the licence, with all connected appeals failing.

Ratio Decidendi: In disciplinary proceedings under the Customs Brokers Licensing Regulations, established supervisory and verification lapses may justify regulatory action even without proof of conscious collusion, and the adjudicating authority may validly choose a lesser penalty instead of revocation where the circumstances do not warrant the harsher consequence.

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