The Chennai Bench of Customs, Excises and Service Tax Appellate Tribunal (CESTAT) quashed the Order imposing Penalty on Customs Brokers as against the Principles of Natural Justice.
The appellant, M/s. Seaswan Shipping and Logistics who is a Customs Broker is aggrieved by the penalty of Rs.50,000/- imposed on him under Rule 18 of the Customs Brokers Licensing Regulations, 2013 (CBLR, 2013).
The coram of Judicial Member Sulekha Beevi C.S. said that revocation of license is a major punishment which affects the livelihood of not only the Customs Broker but also those persons who are employed under him. The punishment being of such major nature, Regulation provides for the conduct of inquiry before adjudication of the Show Cause Notice issued to the Customs Broker.
“The inquiry proceedings is a measure to be cautious and to give sufficient opportunity to the person whose conduct is the subject matter of the Show Cause Notice. The purpose of such inquiry is to help the adjudicating authority to derive at proper conclusion based on all materials and facts that have been collected during the inquiry. The first stage of such inquiry as laid down in the Regulation is to collect material / statements so as to give opportunity to those persons who are required or relevant to be heard. In the second stage, the Regulation provides an opportunity to the Customs Broker to cross-examine those persons whose statements have been recorded. The Inquiry Officer should support his conclusion with reason. As per sub-clause (6) of Regulation 20, a copy of the inquiry report is to be served to the Customs Broker. This is to ensure that the Customs Broker is to be equipped to defend his case at the time of adjudication as the inquiry report would play a vital role in the adjudication proceedings. If the adjudicating authority proposes not to accept the conclusion arrived in the inquiry report, he has to record reasons for disagreeing with the findings of the Inquiry Officer,” the Tribunal said.
The Tribunal while noting that there was the violation of principles of natural justice said that though the Inquiry Officer has reported that there is no violation under Regulation 11(a), (d) and (n) of the CBLR, 2013 the adjudicating authority has proceeded to conclude that there is violation of 11(a) and 11(n), without informing the Customs Broker on the ground of disagreement with the inquiry report.Subscribe Taxscan AdFree to view the Judgment