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  • Rajesh Audithyan

IMPORTANCE OF DUE DILIGENCE DURING FILING OF SHIPPING BILL

#CUSTOMS BROKERS LEGAL UPDATES#

CESTAT NEW DELHI

M/S GREEN VIEW LOGISTICS VERSUS COMMISSIONER, CUSTOMS (AIRPORT & GENERAL) - NEW DELHI

Customs Appeal No. 50749 of 2021Order No. - FINAL ORDER NO. 51791/2021

Dated: - 03 September 2021

CASE HEAD NOTES : Proceedings for revocation of license contemplated under regulations 14 and 17 are independent of the proceedings for suspension of the license under regulation 16. Merely because the Commissioner of Customs decides not to continue with the suspension order after hearing the Customs Broker, would not divest the Commissioner of Customs of his power to proceed under regulations 14 and 17 for revocation of the license.

A notice has to be issued to a Customs Brokers stating the grounds on which it is proposed to revoke the license or impose penalty and a Customs Broker has to submit a reply to the Deputy Commissioner of Customs nominated by the Commissioner to submit statement of defense and also to specify whether the Customs Broker desires to be heard in person - It is on a consideration of the report submitted by the Deputy Commissioner and the representation made by the Customs Broker that the Commissioner is required to pass an order either revoking the suspension of the license or revoking the license. In this view of the matter, the findings recorded under regulation 16(2) cannot in any manner have any bearing on the findings recorded under regulation 17.

It needs to be noted that a finding has been recorded in the order dated June 11, 2021 that an attempt was made by the Appellant to export restricted items by mis-declaring the Customs Tariff Heading of the goods by M/s Balaji International through the Appellant as a Customs Broker and the Appellant failed to exercise due diligence at the time of filing the shipping bill. A finding has also recorded that both the exporter and the Customs Broker had stated at the time of personal hearing that goods were restricted at the time when the Shipping Bill was filed.

Appeal by Customs Broker is dismissed.


Judgment / Order

MR. DILIP GUPTA, PRESIDENT AND MR. C.J.MATHEW, MEMBER (TECHNICAL)

Shri Sarwar Raza, Advocate for the Appellant

Shri Sunil Kumar, Authorized Representative of the Department

ORDER

The order dated June 11, 2021 passed by the Commissioner of Customs (Airport & General) [The Commissioner] revoking the Customs Brokers License of the Appellant has been assailed in this appeal. The order also seeks to forfeit the security deposit and imposes penalty of ₹ 50,000/- on the Appellant.

2. It transpires that earlier the Customs Brokers License of the Appellant was suspended under regulation 16(1) of the Customs Brokers Licensing Regulation, 2018 [2018 Regulations] on October 01, 2020. Subsequently, the suspension was revoked on October 19, 2020 under regulation 16(2).

3. Proceedings were, however, initiated against the Appellant for revocation of the license under regulations 14 and 17 by issuance of a show cause notice dated December 22, 2020 and in terms of regulation 17 (1), the Appellant was called upon to show cause to the Commissioner within 30 days of the receipt of the enquiry report as to why it should not be held responsible for contravention of provisions of regulation 10 (e) and as to why the license which was valid upto 21.12.2025 should not be revoked and the security should not be forfeited in terms of regulation 14 read with regulation 17. The Appellant was also required to show cause as to why penalty should not be imposed under the provisions of regulation 18. An inquiry officer was appointed and the inquiry report dated March 18, 2021 was submitted. It was sent to the Appellant on March 22, 2021 requiring the Appellant to submit a representation on the inquiry report within thirty days. The Appellant submitted a reply dated September 19, 2021 and an opportunity of personal hearing was also granted to the Appellant on June 09, 2021. Thereafter, by an order dated June 11, 2021, the Customs Brokers License of the Appellant was revoked.

4. Shri Sarwar Raza, learned Counsel appearing for the Appellant submitted that once the suspension of the Customs Brokers License of the Appellant was revoked by order dated October 19, 2020 under regulation 16(2), the Commissioner could not have proceeded under regulation 17 for revocation of the license. According to the learned Counsel for the Appellant, the Commissioner could proceed under regulation 17 only if the Commissioner had, instead of revoking the suspension of the license, decided to continue the suspension. Learned Counsel also submitted that when the Commissioner had recorded findings in the order dated October 19, 2020 while passing the order revoking the suspension order, then the same grounds could not have formed the basis for revoking the license of the Appellant, in the absence of additional facts.

5. Shri Sunil Kumar, learned Authorized Representative of the Department submitted that proceedings under regulation 16 relate to suspension of a license, while proceedings under regulations 14 and 17 relate to revocation of license. Thus, even if the Commissioner had revoked the suspension order under regulation 16(2), nothing prevented the Commissioner from proceeding under regulations 14 and 17 for revocation of the license. The learned Authorized Representative also submitted that findings were recorded by the Commissioner in the order dated June 11, 2021 after taking into consideration the inquiry report submitted by the Deputy Commissioner pursuant to the issuance of a show cause notice to the Appellant, while the order for suspension of license was passed in a situation where immediate action was necessary.

6. The submissions advanced by the learned Counsel for the Appellant and the learned Authorized Representative appearing for the Department have been considered.

7. In order to appreciate the contentions, it would be appropriate to reproduce regulations 14 and 16 and the relevant portion of regulation 17 and they are as follows:-

14. Revocation of licence or imposition of penalty- The Principal Commissioner or Commissioner of Customs may, subject to the provisions of regulation 17, revoke the license of a Customs Broker and order for forfeiture of part or whole of security, on any of the following grounds, namely:-

(a) failure to comply with any of the conditions of the bond executed by him under regulation 8;

(b) failure to comply with any of the provisions of these regulations, within his jurisdiction or anywhere else;

(c) commits any misconduct, whether within his jurisdiction or anywhere else which in the opinion of the Principal Commissioner or Commissioner of Customs renders him unfit to transact any business in the Customs Station;

(d) adjudicated as an insolvent;

(e) of unsound mind; and

(f) Convicted by a competent court for an offence involving moral turpitude or otherwise.

16. Suspension of license- (1) Notwithstanding anything contained in regulation 14, the Principal Commissioner or Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the license of a Customs Broker where an enquiry against such Customs Broker is pending or contemplated:

Provided that where the Principal Commissioner or Commissioner of Customs may deem fit for reasons to be recorded in writing, he may suspend the license for a specified number of Customs Stations. (2) Where a license is suspended under sub-regulation (1), the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, shall, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs Broker whose license is suspended and may pass such order as he deems fit either revoking the suspension or continuing it, as the case may be, within fifteen days from the date of hearing granted to the Customs Brokers:

Provided that in case the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, passes an order for continuing the suspension, further procedure thereafter shall be as provided in regulation 17.

17. Procedure for revoking license or imposing penalty- (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, shall, in the course of inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material to the inquiry in regard to the grounds forming the basis of the proceedings, and he may also put any question to any person tendering evidence for or against the Customs Broker, for the purpose of ascertaining the correct position.

(4) The Customs Broker shall be entitled to cross-examine the persons examined in support of the grounds forming the basis of the proceedings, and where the Deputy Commissioner of Customs or Assistant Commissioner of Customs declines permission to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing.

(5) At the conclusion of the inquiry, the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall prepare a report of the inquiry and after recording his findings thereon submit the report within a period of ninety days from the date of issue of a notice under sub-regulation (1).

(6) The Principal Commissioner or Commissioner of Customs shall furnish to the Customs Broker a copy of the report of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, and shall require the Customs Broker to submit, within the specified period not being less than thirty days, any representation that he may wish to make against the said report.

(7) The Principal Commissioner or Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the Customs Broker, pass such orders as he deems fit either revoking the suspension of the license or revoking the license of the Customs Broker within ninety days from the date of submission of the report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, under sub-regulation (5):

Provided that no order for revoking the license shall be passed unless an opportunity is given to the Customs Broker to be heard in person by the Principal Commissioner of Customs or Commissioner of Customs, as the case may be.

8. Regulation 14 deals with revocation of license or imposition of penalty. It provides that the Commissioner of Customs may, subject to the provisions of regulation 17, revoke the license of the Customs Broker and pass an order for forfeiture of part or whole of security on the grounds mentioned in the said regulation. Regulation 16 deals with suspension of license. It provides that notwithstanding anything contained in regulation 14, the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the license of a Customs Broker where an inquiry against the Customs Broker is pending or contemplated. It also provides that in such a situation where the license has been suspended, a notice of opportunity of hearing has to be provided to the Customs Broker, whereafter the Commissioner of Customs may either revoke the suspension or continue with it. In a case where the Commissioner of Customs passes an order for continuing the suspension, further procedure thereafter shall be as provided in regulation 17.

9. The submission of learned Counsel appearing for the Appellant is that if the Commissioner decides not to continue with the suspension order and in fact revokes the suspension order, then the procedure contemplated under regulation 17 cannot be resorted to revoke the license.

10. This submission advanced by learned Counsel for the Appellant cannot be accepted. Proceedings for revocation of license contemplated under regulations 14 and 17 are independent of the proceedings for suspension of the license under regulation 16. Merely because the Commissioner of Customs decides not to continue with the suspension order after hearing the Customs Broker, would not divest the Commissioner of Customs of his power to proceed under regulations 14 and 17 for revocation of the license. In fact regulations 14 and 17 can be resorted to by the Commissioner without even suspending the license of a Customs Broker and a Customs Broker cannot be placed in a better position if the license is suspended under regulation 16(1) but such suspension is not continued under regulation 16(2). Regulation 16 (2) only provides that if the Commissioner decides to continue with the suspension order, then in that case he would have to thereafter follow the procedure as contemplated under regulation 17.

11. The second submission advanced by the learned Counsel for the Appellant cannot also be accepted. The power exercised by the Commissioner under regulation 16 (2) is summary in nature. An order under regulation 16(2) to either revoke the suspension or continue with it is passed after giving an opportunity of hearing to the Customs Broker. On the other hand, the procedure under regulation 17 contemplates a full fledged inquiry. A notice has to be issued to a Customs Brokers stating the grounds on which it is proposed to revoke the license or impose penalty and a Customs Broker has to submit a reply to the Deputy Commissioner of Customs nominated by the Commissioner to submit statement of defene and also to specify whether the Customs Broker desires to be heard in person. After the submission of the written statement, the Deputy Commissioner has to inquire into the grounds which are not admitted by the Customs Broker and for this purpose, the Deputy Commissioner has to consider such documentary evidence and take such oral evidence as may be relevant or material to the inquiry in regard to the grounds forming the basis of the proceedings, and he may also put any question to any person tendering evidence for or against Customs Brokers, for the purpose of ascertaining the correct position. The Customs Broker is also entitled to cross examine the persons examined and at the conclusion of the inquiry, the Deputy Commissioner has to prepare a report of the inquiry and after recording his findings thereon submit it to the Commissioner. The Commissioner thereafter has to furnish to the Customs Broker a copy of the report of the Deputy Commissioner and require the Customs Broker to submit within the specified period any representation that he may wish to make against the said report. It is on a consideration of the report submitted by the Deputy Commissioner and the representation made by the Customs Broker that the Commissioner is required to pass an order either revoking the suspension of the license or revoking the license. In this view of the matter, the findings recorded under regulation 16(2) cannot in any manner have any bearing on the findings recorded under regulation 17.

12. It needs to be noted that a finding has been recorded in the order dated June 11, 2021 that an attempt was made by the Appellant to export restricted items by mis-declaring the Customs Tariff Heading of the goods by M/s Balaji International through the Appellant as a Customs Broker and the Appellant failed to exercise due diligence at the time of filing the shipping bill. A finding has also recorded that both the exporter and the Customs Broker had stated at the time of personal hearing that goods were restricted at the time when the Shipping Bill was filed.

13. Thus, for all the reasons stated above, the impugned order dated June 11, 2021 does not call for any interference in this Appeal. The Appeal is, accordingly, dismissed.

(Order pronounced in the open Court on 03.09.2021)

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