TaxTMI 
TaxTMI 
2023 (9) TMI 1389
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....ments. He has been engaged in this business for 11 years. During the normal course of business activity, M/s Shree Enterprises sought the services for clearance of the consignment from the appellant. The appellant thereafter requested the said exporter who supplied the requisite KYC documents viz., copy of the IEC, GST registration certificate, PAN of the exporting firm and partners, Aadhar number, electricity bill of the rented premises, partnership deed of the exporting firm, bank certificate etc. All these documents were verified with the original by the appellant along with the declared office premises. The Commissioner received the Analytical Report no: 32/2022-23 dated 05.01.2023, which had analysed various exports covering 436 shipping bills and had identified 27 non- existent exporters. On receipt of the said report, the Commissioner ordered immediate suspension of the Customs Broker license of the appellant vide the impugned order. 3. Learned Counsel for the appellant submitted that the Regulation 16 of CBLR, 2018 starts with a non-obstante clause and has invested the Commissioner of Customs with power to suspend the license of a Customs Broker in appropriate case where....
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.... in respect of the cancelled GSTIN till 22.07.2021 i.e., which was much after the date of export. The issuance of second GSTIN itself prove that the firm was very much in existence. He further submitted on the issue of issuance of the statutory documents, that it was not the responsibility of the appellant to find out whether the GSTIN had been issued correctly or not. Consequently, the appellant cannot be punished on the said ground. He submitted that the negative report submitted by jurisdictional GST officer regarding nonfunctioning of the assessee at their principal place of business is the responsibility of the officer who has issued the registration certificate to that assessee. Even the issuance of the registration certificate errantly is not the responsibility of Custom Broker, but the responsibility of the concerned departmental authority. He further submitted that the Adjudicating Authority had failed to appreciate that all the export made by the exporter of the appellant was under LETTER OF UNDERTAKING (LUT) and procedure had been defined in CGST Act 2017/IGST Act 2017 and corresponding Rules. In this context, the learned Counsel further submitted that before opting for ....
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....lls having FOB value of Rs.144,05,67,230/- and claimed drawback amount of Rs.3,43,53,506/- & ROSTEL/RODTEP amount of Rs.24,01,945/- on behalf of a nonexistent firm i.e., M/s Shree Enterprises registered with GSTIN NO. 07ABDES0914GIZA. On receipt of the DGARM report, prima facie it was observed that the appellant had not complied with the provisions of CBLR, 2018 and accordingly CB licence had been suspended on 13.02.2023 vide order No. 06/ZR/ Suspension/Policy/2023 dated 13.02.2023 and the suspension is confirmed on 02.03.2023 order No. 18/ZR/ Suspension- Confirmation/Policy/2023 after giving appropriate opportunity as per principles of natural justice. 5.1 The learned Authorised Representative further submitted that that proper procedure has been prescribed under law which had not been completed. Therefore, the balance of judgement, at this stage, was not in favour of the appellant, as they had provided export services to a non-existent entity M/s Shree Enterprises, even though the information that its Aadhar verification was not done was in public domain and available to the appellant. 6. We have heard the Learned Counsel for the appellant and the learned Authorised represe....
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...., as they are provided export services to M/s Shree Enterprises even though the information that its Aadhar verification was not done was a public domain and available to see the period thus there is a case for continuation of the suspension of the CB licence." 9. From the findings recorded in the impugned order we are not in position to decipher any cause of immediate need for suspension of the CB license. The Revenue has not brought forward any evidence that the earlier export documents filed by the appellant are fabricated or manipulated. The Revenue has also not been able to lead any evidence that the said exporter was not existent at the time of export, and the CB had connived in any fraud to defraud the Government exchequer. It has also been brought on record that one of the GSTINs was still in existence at the time of suspension of the appellant's license. We are in agreement with the contention of the learned counsel that the physical verification of the exporter's premises was not the responsibility of the appellant, and infact is the responsibility of the authority approving the GSTIN. Under such circumstances, the action initiated against the appellant CHA cannot be s....
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....ord with the principles of accountability or of prompt response. There is no evidence of any lack of cooperation on the part of appellant herein. 7. In these circumstances, the cause of justice cannot be further enabled except by an immediate revocation of the suspension and reinstatement of the license. Needless to say, this is without prejudice to continuation with other proceedings permissible under the Customs Brokers Licensing Regulations, 2018." 10. Although there is enough power vested in the Commissioner to suspend the license of Custom Broker, in terms of Customs Brokers Licensing Regulations, 2018, however the said power which impacts the livelihood of the person and his employees needs to be exercised with caution and in accordance with the inbuilt safeguards, to prevent the arbitrary and reckless use of the power. In our view, in the present case, Commissioner has not recorded any reason for the cause of immediate suspension. Infact, there is no cogent reason or finding recorded by the Commissioner to suspend the license of the appellant two years after the date of export. In this regard, we note that the Hon'ble Madras High Court has in case of Thiru Rani L....
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....egorical terms in each and every case, where action under Regulation 11(2) is invoked, that immediate action is required based on the reasons supporting such apprehension of the authority of continuance of illegality. Hence, there is a clear distinction between the nature of action taken under Regulations 11(1) and 11(2), while the former is a punitive, the later is a preventive. Perusal of the impugned order in this writ petition would show that no such consideration was made by the Commissioner of Customs except extracting Regulation 11(2) and stating that an enquiry is contemplated in this case and that allowing the petitioner to continue for work will seriously jeopardize the Customs duties and security of Cargo. The respondent has not stated any other reason anywhere as to why an immediate action is required in this case. 10. This Court has considered the similar provision made under Regulation 21(2) of the Customs House Agents Licensing Regulations, 1984 in W.P. No. 17363/1994, dated 28-11-1994 reported in 1995 (77) E.L.T. 79 (Madras) [East West Freight Carriers (P) Ltd. v. Collector of Customs, Madras]. At paragraph Nos. 7 to 9 of the said decision, it has been obse....
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....98 passed by the respondent No. 2 clearly suggests that the power under Regulation 21(2) was resorted to apparently without spelling out in the impugned order as to whether any immediate action was necessary so as to suspend the licence of the appellants with immediate effect. Undoubtedly a plain reading of the Regulation 21(2) clearly stipulates that the requirement to take immediate action is a sine qua non to the suspension of a licence under Regulation 21(2) because such suspension is not by way of any punishment, as is contemplated by Regulation 21(2), but is required to cater to a situation warranting immediate action. The purpose of resorting to immediate suspension of a licence because of some immediate action is to immediately stop the activities of the clearing agent so as to disable him from taking any further action in the matter since, under a particular situation and under some given set of circumstances, the requirement of immediate action may demand that the clearing agent may be immediately required to be prevented from working any further. The minimum that is required by the Commissioner to enable him to exercise such power is the spelling out of the circumstances....