The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) overturned the revocation of the appellant’s customs broker license, as the bench found no evidence of a violation of Regulation 10(k) of the Customs Brokers Licensing Regulations, 2018.
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The assessee appealed against the order of the Principal Commissioner of Customs, which had revoked the appellant’s license, forfeited their security deposit, and imposed a penalty of Rs. 50,000. The Commissioner was of the opinion that the assessee had breached Regulation 10(k) of the Customs Brokers Licensing Regulations by failing to maintain proper records, including bills of entry and correspondence related to their business.
Coming to the facts of the case, the appellant, SYNC Logistics, filed two bills of entries for the same set of goods, both claiming a preferential duty rate under the India-Japan Comprehensive Economic Partnership Agreement (CEPA). The first bill referenced a country of origin certificate issued by the Japan Chamber of Commerce and Industry, but SYNC Logistics failed to upload the required documents by the deadline. When queried about the second bill, the customs broker responded by stating that the first bill had been assessed at the merit rate of duty, but further queries went unanswered. The licensing authority concluded that the appellant had deliberately deleted email correspondence to evade investigation, calling it a grave violation of the regulations.
The CESTAT noted that Regulation 10(k) requires customs brokers to maintain records in an orderly and itemised manner as specified by designated officials, but there was no evidence that such specifics had been prescribed.
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CESTAT further observed that “there is nothing on record to establish that any of the said authorities had prescribed a method of maintaining upto date records. In the absence of such specifics, there is no standard against which a breach could be noticed and taken cognizance of.”
The bench dismissed the authority’s claim that the assessee had deliberately erased records, calling it mere surmise without proof.
CESTAT held that the licensing authority failed to demonstrate how the appellant had violated Regulation 10(k). The tribunal comprising CJ Mathew (Technical Member) and Ajay Sharma (Judicial Member) set aside the revocation of the licence, forfeiture of the security deposit, and the imposed penalty and allowed the assessee’s appeal.
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