– “The revocation of license and imposition of penalty are punitive measures; it would be necessary to examine the harm and potential harm caused by the infraction in respect of which the punitive measure is imposed.”
The Delhi High Court quashed the revocation of Customs Broker Licence by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), and observed that there is no necessity that every contravention of the Customs Brokers Licensing Regulation, 2013 (CBLR) be visited with extreme punishment or revocation of license.
The petitioner, SMS Logistics, has filed the present petition under Section 130 of the Customs Act, 1962 impugning an order passed by the Customs Excise and Service Tax Appellate Tribunal (‘the CESTAT’).
The appellant is a custom broker and the offence report indicated that the concerned custom authority had held that the real importer of the goods was M/s Infosoft Digital Designs and Services Pvt. Ltd (IDDSL) and an attempt to evade the custom duty was made by misusing the Served From India Scheme (SFIS) Scrips.
The CESTAT rejected the appellant’s appeal. It did not consider the appellant’s contention that the agreement between M/s Tim Delhi Airport Advertising Pvt. Ltd (TDAAL) and (IDDSL) for sale and purchase of the goods in question, was a valid transaction on HSS basis, on merits; the CESTAT found that the appellant had admitted that HSS Agreement was incorrect and what was admitted did not require to be proved.
The Counsel for the appellant contended that once the goods had been handed over to the airlines, they were beyond the control of the importer. The sale made thereafter, while the goods are in transit, would be HSS as the goods were in possession of the shipper and not in control of the exporter or the importer.
A Division Bench comprising Justices Vibhu Bakhru and Amit Mahajan observed that “There is a range of punishment that can be imposed by the Commissioner of Customs and it is not necessary that every contravention of the Regulations be visited with the extreme punishment or revocation of license, which in effect would deprive the custom broker of his livelihood.”
The Court noted that the CESTAT had failed to consider whether the punishment imposed was disproportionately high, as contended by the appellant and was of the view that the punishment of revocation of appellant’s CB License, is disproportionately excessive.
“In view of the above, we set aside the impugned order revoking the appellant’s CB License and direct that in the event the appellant seeks renewal of the CB License or applies afresh, the same would be considered in accordance with law” the Bench concluded.
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