CESTAT Upholds Penalty and forfeiture of Security Deposit of CB on Illegal Smuggling of Cigarettes on ground of Violation of Regulation 10 of CBLR [Read Order]

The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the penalty and forfeiture of security deposit of Customs Broker (CB) on illegal smuggling of cigarettes on the ground of violation of Regulations 10 of the Customs Broker Licence Regulations (CBLR),2018. 

Safe Cargo Clearing Services, the appellant assessee holds a Custom broker license and was permitted to work as a custom broker at various customs stations the assessee appealed against the order passed by the Commissioner (Appeals) for revoking the Custom Broker Licence of the appellant under Regulation 17 of CBLR and imposition of penalty of Rs. 50,000/- under Regulation 18 read with Regulation 14 of CBLR. 

Sudhir Malhotra and Kanika Malhotra, the counsels for the assessee contended that the show cause notice issued to the assessee was defective, as it had been issued without bringing on records, statements of customs officers, custodian officers, etc. Hence, the same was bad in law. 

Also submitted that the inquiry officer had not given any finding regarding the issuance of notice beyond the period of limitation. 

Rajeev Gupta, Swati Chopra, and Ravinder Jangu, the counsels for the department relied on the decisions made by the lower authorities and contended that the assessee deleted the communication of WhatsApp chat which was crucial evidence in the case and hence, cannot be trusted in any manner. 

Also submitted that it appeared that he in connivance with other accused managed to illegally clear the consignment having Cigarettes and later on deleted all the WhatsApp chat/ call records with their crime partners. 

The Bench observed that the assessee illegally cleared the consignment having cigarettes and later on deleted all the WhatsApp chats/call records with their crime partners which clearly shows that he had not fulfilled the obligation under regulation 10 of CBLR but his act and conduct did not warrant the imposition of extreme penalty of revocation of custom broker license depriving him of his livelihood. 

The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) quashed the revocation of the license of the Customs broker and upheld the penalty imposition and forfeiture of the security deposit. 

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