Attempt to Smuggle Prohibited Goods cannot be Brushed aside as mere Violation of CBLR: CESTAT [Read Order]

The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) presided by Ms. Sulekha Beevi C.S., Member (Judicial) has held that an attempt to smuggle prohibited goods cannot be brushed aside as mere violation of Customs Brokers Licensing Regulations (CBLR).

During the course of investigation based on intelligence report, it was found a large number of red coloured wooden logs stacked in a container. The officers worked out the market value of the red sanders seized to be Rs.5,28,75,000/- at Rs.45 lakhs per MT. The container used to carry the red sanders logs for illicit export was also liable for confiscation. The appellant, M/s.Behag Overseas is a Customs Broker, who had filed the shipping bill for export of the said consignment.

The adjudicating authority dropped the proposal to impose penalty under sec 114(i) against the Customs Broker stating that there is no evidence that the appellant has abetted the smuggling plan. Against the order of adjudicating authority, the Department filed appeal before the Commissioner (Appeals) who set aside the order passed by the adjudicating authority as far as it relates to non-imposition of penalty on the appellant and remanded the matter to the adjudicating authority. Aggrieved by such order of remand, the appellant filed appeal before the Tribunal.

The counsel for the appellant submitted that there is clear finding by the adjudicating authority that there is no evidence in the show cause notice to prove that the appellant has abetted the illegal export of red sanders. It is stated by the adjudicating authority that at the most, the violation would fall only under Customs House Agents’ Licensing Regulations (CBLR), 2013 for which imposition of penalty under Section 114 of the Customs Act, 1962 is not warranted.

The respondent counsel submitted that the appellant has admitted that they have not verified the antecedents of the exporter in the ICEGATE Customs Website. Further, they have not received the complete KYC. The incident is an attempt to smuggle prohibited red sanders which has to be viewed seriously. Such violation on the part of the Customs Broker cannot be brushed aside as mere violation under ‘Customs Brokers’ Licensing Regulations.

The Tribunal by relying the decision of Jurisdictional High Court in the case of Sri Rama Thenna Thayalan has observed that it is incorrect to say that CHA is only liable under CBLR for such violations. The single bench has held that “the view taken by Commissioner (Appeal) that the matter has to be remanded for reconsideration does not require any interference. The impugned order is upheld. Appeal is dismissed”.

Advocate Dr. Sunitha Sundar appeared for the appellant and Mr. R. Rajaraman AC appeared for the respondent.

To Read the full text of the Order CLICK HERE

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