TaxTMI 
TaxTMI 
2024 (12) TMI 170
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....on 71 ibid until further orders. This order is the result of separate show cause proceedings initiated vide Show Cause Notice (SCN) No. 218/2022-23 dated 22.12.2022, inter-alia, seeking action against the appellants CB under Section 124 of the Customs Act, 1962. In the said SCN, it was alleged that the appellants CB did not exercise due diligence in discharging their obligation as required under sub-regulations 10(d), 10(e), 10(k) and 10(n) of CBLR, 2018. On such basis, and by treating it as an offence report, the learned Commissioner had come to the conclusion that the appellants CB had prima facie failed to fulfill their responsibility as per provisions of CBLR, 2018 for ordering immediate suspension under Regulation 16(2) of CBLR, 2018 vide Order dated 17.04.2023. After giving a post decisional hearing on 24.04.2023, the licensing authority i.e., Commissioner of Customs had ordered for continued suspension of the CB license of the appellants vide order dated 04.05.2023. 2.2 The said customs offence case was also adjudicated by the learned Additional Commissioner of Customs vide Order-in-Original CAO No. ADC/PKK/ CC(G)/SJ/CBS Adj. dated 12.06.2023, in a separate proceedings wh....
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....e impugned order dated 04.05.2023. Feeling aggrieved with the impugned order, the appellants have preferred this appeal before the Tribunal. 3.1 Learned Advocate for the appellants contends that all the allegations of violation of Regulations 10(d), 10(e), 10(k) and 10(n) of CBLR, 2018 in both the cases have been countered by them. One of the main arguments advanced by the learned Advocate against the impugned order dated 04.05.2023, is that learned Commissioner had not considered the factual details submitted by them during the adjudication proceedings and passed the impugned order in a mechanical manner. He further stated that the departmental SIIB(X) officers themselves had verified the premises of exporter M/s R.S. Creations and submitted a visit report dated 18.12.2019 stating the existence of the exporter and that the summons was also served upon them which was duly received by exporter, and hence the findings of the learned Commissioner that the exporter did not exist in the said address is factually incorrect. Further, he stated that there is no evidence on record to allege that the appellants have not advised the exporters properly, did not maintain records of transacti....
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....of the appellant's CB license, as well as continued suspension of the CB license in the impugned order and stated that the same are sustainable in law. 5. We have heard both sides and perused the case records. 6.1 The issue involved herein is to decide (i) whether the action taken for immediate suspension of the appellant Customs Broker and its continuation is legally sustainable in terms of CBLR, 2018 or not. The specific sub-regulations which were alleged to have been violated by the appellants are Regulations 10(d), 10(e), 10(k) and 10(n) of CBLR, 2018, and hence the issue to be decided is also (ii) whether such distinct charges framed against the appellants enable the immediate suspension action and its continuation under Regulation 16 of the CBLR, 2018. We find that the Regulation 10 ibid, provide for the obligations that a Customs Broker is expected to fulfill during their transaction with Customs in connection with import and export of goods. These regulations are extracted and given below as follows: "Regulation 10. Obligations of Customs Broker: - A Customs Broker shall - ... (d) advise his client to comply with the provisions o....
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....imposing penalty. Regulation 17. (1) The Principal Commissioner or Commissioner of Customs shall issue a notice in writing to the Customs Broker within a period of ninety days from the date of receipt of an offence report, stating the grounds on which it is proposed to revoke the license or impose penalty requiring the said Customs Broker to submit within thirty days to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defense and also to specify in the said statement whether the Customs Broker desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs. (2) The Commissioner of Customs may, on receipt of the written statement from the Customs Broker, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, to inquire into the grounds which are not admitted by the Customs Broker. (3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shal....
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.... specified in regulation 14 or incapacitated in the meaning of the said regulation, then the Principal Commissioner of Customs or Commissioner of Customs may pass an order imposing penalty as provided in regulation 18: Provided that where an order is passed against an F-card holder, he shall surrender the photo-identity card issued in Form F forthwith to the Deputy Commissioner of Customs or Assistant Commissioner of Customs. (9) Where in an offence report, charges have been framed against an F- card holder in addition to the Customs Broker who has been issued a license under regulation 7, then procedure prescribed in regulations 16 and 17 shall be followed mutatis mutandis in so far as the prescribed procedure is relevant to the F-card holder: Provided that where any action is contemplated against a G-card holder alone under these regulations, then instead of authority referred to in sub- regulation (8), a Deputy Commissioner or Assistant Commissioner rank officer shall pass such order as mentioned in the said sub-regulation along with debarring such G-card holder from transacting the business under these regulations for a period of six months from such ....
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....required to be passed either revoking the suspension or continuing it, as the case may be, justifying the reasons to be recorded in writing. 6.4 Further, plain reading of the above legal provisions of Regulation 17 of CBLR state in clear terms that the inquiry proceedings have to be followed as per the procedure prescribed in the Regulation 17 ibid. The following are the various steps involved therein in passing an order under Section 17 inquiry proceedings: (i) Issue of Show Cause Notice to a CB against whom action has been proposed under CBLR (ii) On the basis of written reply submitted by the CB, determine the grounds which have been accepted by him and those which have not been admitted by the CB, and appoint an Inquiry Officer to inquire into such grounds which are not admitted (iii) Inquiry officer to take into account all necessary evidence, oral or documentary for ascertaining the correct position (iv) opportunity for cross-examination of the persons examined in support of the evidence against the CB (v) Preparation of the inquiry report containing the findings of the inquiry officer (vi) Obtaining written representat....
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....re was involvement of the appellants CB in such overvaluation of the export goods. Therefore, we are of the considered view, that there are no specific grounds to evidentially prove that immediate suspension of the appellants CB license is required as an appropriate case, for initiating action under Regulation 16 of CBLR, 2018. Further, none of the parties are able to provide further information about the inquiry proceedings that is required to be initiated under Regulation 17 for bringing the case to a logical conclusion as per CBLR, 2018. 6.7 In this regard, we find that Central Board of Indirect Taxes and Customs (CBIC) had issued certain instructions to all the Chief Commissioners/ Commissioners of Customs about the various references received about suspension of CB licenses being resorted to by the licensing authorities even in cases which do not merit immediate suspension of CB license. Even though such instruction No.24/2023 was issued few months after issue of impugned order, the context with which such instructions was issued and that the problem of immediate suspension being invoked in a number of cases is indicative that the impugned order also needs to be examined fr....
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....y." Plain reading of above instructions reveals that there is twin requirement of appropriateness of the case, as such action is not contemplated in every case. These are (i) the grounds for invoking immediate suspension action should be indicated so as to demonstrate that it is not an exercise undertaken in a mechanical or routine manner; and (ii) that the reasons for such immediate suspension should be recorded. These are to be fulfilled for taking action on immediate suspension of CB license under Regulation 16 of CBLR, 2018. From the facts of the case, it is clear that there is no ground or evidence produced by the department to implicate the appellants CB in overvaluation of export goods. In fact, even in the proceedings initiated for the customs offences against the appellants CB, there is no such evidence forthcoming as seen from the adjudication order dated 12.06.2023, in order to claim that the learned Commissioner had gone by his preponderance of probability, in order to decide that the present case is an appropriate case for immediate suspension, on the basis of his subjective satisfaction of the facts and evidences. There is neither such basis recorded by learned Com....
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....r years, and hence the above ratio of the decision taken by the Tribunal is squarely applicable to the present case before us. 6.9 We further find that in one another case involving smuggling of prohibited goods for export, long gap of nine months from the date of incident and action for immediate suspension and non-initiation of inquiry proceedings were cited as the grounds by the Co-ordinate Bench of the Tribunal in the case of K.S. Kannan Vs. Commissioner of Customs, Chennai - 2008 (227) E.L.T. 414 (Tri. - Chennai) setting aside the order for immediate suspension. The relevant paragraphs of the said order is extracted and given below: "2. It is submitted by the counsel for the appellants that the suspension of CHA licence without enquiry or show-cause notice after more than nine months from the date of the relevant incident cannot be sustained in law. In this connection, learned Counsel has relied on the following decisions :- (i) Ganesh Shipping Agency v. Commissioner of Customs, Chennai - 2008 (222) E.L.T. 536 (Tri. - Chennai) (ii) P.C. India Shipping Agency v. Commissioner of Customs (General), Mumbai-I - 2007 (213) E.L.T. 251 (Tri. - Mumbai) ....
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....terials are available for the same." 7. In view of the above discussion on the crux of the grounds of appeal against the impugned order, it is hereby made very clear that we are not examining the allegations of violation of various Regulations under CBLR against the appellants, as it is pre-mature inasmuch as the licensing authority i.e., Commissioner of Customs is yet to finally pass a speaking order under Sub-regulation (8) of Regulation 17 of CBLR, 2018. We are also therefore not expressing our opinion on any of the alleged violations of Regulation 10 ibid, as there is an independent inquiry proceeding that is required to be conducted by the jurisdictional Customs Commissionerate as licensing authority and on which a speaking order is required to be passed by him in terms of Regulation 17 of CBLR. 8.1 In view of the above analysis of the legal provisions under Regulation 16 and 17 of CBLR, 2018 and on the facts of the case, we find that the impugned order dated 04.05.2023 is liable to be set aside, as it does not stand the scrutiny of law. 8.2. In view of the foregoing discussions, we do not find any merits in the impugned order 04.05.2023 passed by the learned Commissi....