No proof of Mala Fide and Wilful Misrepresentation by Customs Broker: CESTAT sets aside Penalty [Read Order]

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside penalty as there was no proof of mala fide and wilful misrepresentation by customs broker.

During these proceedings it was found that M/s. Access World Wide Cargo knowing very well that the exporter was not eligible for drawback had filed the shipping bills under the claim of drawback, thus, failed to discharge their obligations of the Customs Broker in terms of the Customs Broker Licensing Regulations 2018. Therefore, the Commissioner in the impugned order imposed penalty of ₹ 50,000/- on the customs broker under Regulation 14 read with Regulation 18 of the Customs Broker Licensing Regulations 2013/2018. Aggrieved by this order, the appellant is in appeal before the Tribunal.

The counsel on behalf of the appellant submitted that the Order-in-Original No. 628/2009 dated 29.10.2019 was issued confirming the demand of Rs.50,48,749/- being the ineligible drawback to be recovered from the exporter ADPL.

The appellant also submitted that he had in his statement clearly stated that the exporter was entitled to drawback under section 75 of the Customs Act and as claimed by the Commissioner, nowhere they had stated that the exporter had directed them to file the shipping bills even though they brought to the notice of the exporter that they were not eligible for drawback.

A Single Bench of the Tribunal comprising R Bhagya Devi, Technical Member observed that “The Tribunal vide its Final Order had clearly held that since the exporter had challenged the eligible claim of drawback before the revisionary authority the matter was sub-judice and it also observed that the department had failed to prove that there is a mala fide and wilful misrepresentation by the customs broker and accordingly penalty was set aside on the set of facts of ineligible drawback claimed by the exporter. Considering all these facts and taking into account the unblemished record of the customs broker as held by the Commissioner, the penalty imposed upon the appellant is set aside.”

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