TaxTMI 
TaxTMI 
2026 (8) TMI 940
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....thority'], whereby the Customs Broker licence of the Appellant was revoked, its security deposit was forfeited and a penalty of Rs. 50,000/- was imposed upon it. 2. The issue which arises for consideration in the present Appeal is whether the revocation of the Customs Broker licence of the Appellant, along with forfeiture of its security deposit and imposition of penalty, is sustainable in law in the facts and circumstances of the case, where the Bill of Entry was filed in the name and using the Customs Broker credentials of M/s Prakhar Gupta, but the Appellant, despite holding its own Customs Broker licence, was found to have undertaken the clearance-related activities in respect of the subject consignment. FACTUAL MATRIX: 3. In order to appreciate the controversy involved in the present Appeal, the relevant facts, in brief, are required to be noticed. 4. The Appellant is a Customs Broker holding Customs Broker Licence No. R-14/DEL/CUS/2020, stated to be valid up to 30.07.2030. The proceedings against the Appellant arose out of the import of a consignment by M/s JCS Botanicals, Greater Kailash, New Delhi, under Bill of Entry No. 7368812 dated 04.02.2022, filed at ICD, ....
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.... contact particulars. It also stated that correspondence in relation to the consignment had been conducted through Shri Awadhendra Yadav, who, according to the importer, worked with Shri Prakhar Gupta. 9. The statement of Shri Awadhendra Kumar, Director of the Appellant, was recorded on 07.03.2022. He stated that the documents relating to the consignment had been received by him on behalf of M/s Prakhar Gupta and that he had filed the documents on behalf of the said Customs Broker. He further stated that the original authorisation letter dated 21.02.2022 had been signed by Shri Prakhar Gupta and handed over to an employee of the Appellant, who thereafter forwarded a scanned copy thereof to Shri Sanjay Kumar. He also stated that the employees of the Appellant, including Shri Sanjay Kumar and Ms. Sneha, also worked for M/s Prakhar Gupta and that both entities were operating from the same premises. During the investigation, Shri Awadhendra Kumar also produced an agreement dated 16.07.2018 recording an arrangement between him and Shri Prakhar Gupta concerning the mutual handling and transaction of business. 10. Pursuant to the aforesaid investigation, the Joint Commissioner of Cu....
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....osed a penalty of Rs. 50,000/-. 16. Aggrieved by the aforesaid order, the Appellant preferred an appeal before the CESTAT. The CESTAT, upon consideration of the material on record and the rival submissions, dismissed the appeal vide the Impugned Order dated 23.09.2024. The Tribunal upheld the findings of violation of Regulations 10(a), 10(d), 10(e), 10(f) and 10(k) of the CBLR and found no sufficient ground to interfere with the revocation of the licence, forfeiture of the security deposit or imposition of penalty. 17. It is in the aforesaid circumstances that the Appellant has approached this Court under Section 130 of the Customs Act, challenging the Impugned Order passed by the CESTAT. CONTENTIONS OF THE PARTIES: 18. Contentions on behalf of the Appellant: 18.1. It was submitted that the CESTAT erred in holding that the Appellant had misused or sub-let the Customs Broker licence of M/s Prakhar Gupta. It was contended that the Bill of Entry was filed using the credentials of M/s Prakhar Gupta with his knowledge, instructions and consent, and that the importer was already a client of M/s Prakhar Gupta. The Appellant, therefore, could not be treated as having indepen....
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....nd that such prolonged suspension, coupled with the absence of any prior misconduct, ought to have been taken into account while determining the appropriate penalty. 19. Contentions on behalf of the Respondent: 19.1. Per contra, it was submitted that the subject consignment was sought to be cleared by filing the Bill of Entry using the Customs Broker credentials of M/s Prakhar Gupta, whereas the investigation had established that the Bill of Entry was, in fact, filed by the Appellant through its Director, Shri Awadhendra Kumar. It was contended that the Appellant, therefore, could not seek to disassociate itself from the transaction merely because the name of M/s Prakhar Gupta appeared as the Customs Broker in the Bill of Entry. 19.2. It was submitted that the goods imported by M/s JCS Botanicals were prohibited and were liable to confiscation under Sections 111(d) and 111(o) of the Customs Act, 1962. In such circumstances, the Appellant, having undertaken the clearance-related activities in relation to the consignment, was required to advise its client to comply with the provisions of the Customs Act and the allied laws, rules and regulations and, in the event of non-comp....
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....akhar Gupta and Shri Awadhendra Kumar, as well as the other material on record, establish that the clearance-related activities were undertaken by the Appellant. The importer had furnished the relevant documents to the email address of the Appellant and the examination proceedings were attended by Shri Sanjay Kumar, who was an employee and G-Card holder of the Appellant. Shri Awadhendra Kumar, Director of the Appellant, also acknowledged that he had received the documents from the importer and had filed the same on behalf of M/s Prakhar Gupta. 22. The Appellant's principal defence is that the use of the credentials of M/s Prakhar Gupta was with his knowledge, instructions and consent and that there was a mutual understanding between the parties. However, this submission does not advance the Appellant's case. The fact that M/s Prakhar Gupta may have permitted the Appellant to use his Customs Broker credentials does not authorise the Appellant to undertake Customs Broker functions in a transaction in which it had not obtained authorisation from the importer in its own name or to file the Bill of Entry using the credentials of another Customs Broker. The very circumstance relied up....
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....rt. 26. In this regard, the submission of the Appellant that the prohibited nature of the goods could only be ascertained upon examination cannot be accepted as a complete answer to the violations found against it. A Customs Broker is not merely required to file documents furnished by an importer. The obligations under the CBLR require the Customs Broker to exercise the degree of diligence expected of a licensed intermediary and to advise the client regarding the statutory requirements governing the import and clearance of goods. Where the goods are subject to restrictions or prohibition under the applicable law, the Customs Broker cannot proceed with their clearance by simply filing the Bill of Entry in the name of another Customs Broker. 27. The Appellant's reliance upon the fact that the goods were subsequently permitted to be re-exported upon payment of redemption fine and penalty by the importer also does not materially assist its case. The fact that the adjudicating authority permitted redemption of the goods for re-export, subject to the statutory conditions, concerns the consequences visited upon the importer in respect of the imported goods. It does not retrospective....
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....umar. Shri Awadhendra Kumar had also acknowledged having collected the original documents from the importer. However, those original documents were not produced before the Customs authorities when called for. The finding that the Appellant failed to maintain and produce the requisite records and documents relating to the transaction, therefore, warrants no interference. 32. The Appellant has placed considerable reliance upon the fact that the Customs Broker licence of M/s Prakhar Gupta, whose credentials were used for filing the Bill of Entry, was subsequently set aside by the CESTAT, Allahabad Bench, by Final Order No. 70530-70531/2024 dated 20.08.2024. This circumstance, however, cannot by itself determine the legality of the action taken against the Appellant. The proceedings against M/s Prakhar Gupta and those against the Appellant concern the respective statutory obligations of two separate Customs Brokers. The relief granted to M/s Prakhar Gupta in his proceedings cannot erase the independent conduct of the Appellant established on the basis of the material available in the present case. 33. Similarly, the submission that there was no previous violation on the part of t....
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.... merely technical or procedural in nature. The consequence of revocation may undoubtedly be severe, but the severity of the consequence must be assessed against the gravity of the conduct established on record. 37. The Appellant's further submission that its licence had remained suspended for a substantial period also does not, in the facts of the present case, warrant setting aside the revocation. Suspension is an interim regulatory measure pending adjudication of the allegations, whereas revocation follows upon a finding that the Customs Broker has committed violations warranting such action. The period during which the licence remained suspended cannot, therefore, by itself, be treated as a substitute for the final consequence of revocation, particularly where the violations found are substantive and relate to the manner in which the Appellant undertook Customs Broker activities. 38. This Court is also mindful that the present proceedings arise under Section 130 of the Customs Act and interference with the findings of the CESTAT would be warranted only upon the existence of a substantial question of law. In the present case, having regard to the deliberate use of another C....