In a significant ruling, the Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) subletting of customs pass to an employee of another firm will not be a breach of Regulation 11 (m) of Customs Broker Licensing Regulations(CBLR), 2013 and set aside the revocation of Customs Broker License.
M/s Mahendra Shipping Agency, a customs broker, challenged the revocation of licence no. 11/369 and forfeiture of a security deposit under regulation 20 and regulation 18 of Customs Brokers Licensing Regulations, 2013 in order of Principal Commissioner of Customs (General), New Custom House, Mumbai.
Proceedings were initiated against the appellant by notice enclosing the grounds of imputation and articles of charge, for breach of regulation 10, 11(a), 11(b), 11(d), 11(e), 11(m) and 11(n) of CBLR in connection with the handling of 66 packages of ‘readymade garments’ for export to Sudan and Nigeria against 12 shipping bills of M/s Orient Exports that were taken up for investigation by Commissioner of Customs (Export), ACC, Mumbai as intimated by letter of 31st January 2014.
It was claimed by the appellant that the two, viz., Mr Shailesh Watambale and Mr Ganesh Salaskar, were their employees in possession of the ‘customs pass’ issued on their request. The licence had been initially suspended by the competent authority and was challenged by taking note of the lack of any progress in proceedings under the Customs Broker Licensing Regulations, 2013.
The Tribunal revoked the suspension while leaving it to the licensing authority to continue the process envisaged under the Regulations. It was found that the Regulations are also deficient in prescribing that the employees of ‘customs broker’ licensee eschews part-time employment elsewhere.
In the absence of the above-said directions/ conditions, it would be improper for the licensing authority to insinuate so for invoking detriment. It appeared that there was no sufficient evidence to establish the charge that the appellant has been in breach of Regulation 10 of the Customs Broker Licensing Regulations, 2013.
It was alleged that the appellant on the other charge of not knowing the customer upon the foundation that the licence had been ‘sub-let’ to the two persons and had granted access to the credentials, necessary for undertaking customs clearance, to persons not in their employment.
It was viewed that the alleged breach of regulation 11(m) of Customs Broker Licensing Regulations, 2013 by not verifying antecedents and correctness of the import-export code (IEC) and other details was based entirely on the role played by M/s Millenium Freight Forwarders Pvt Ltd as ‘sub-let’ owner of the licence.
It has been held that the two employees of the appellant were employees of M/s Millenium Freight Forwarders Pvt Ltd and the Court observed that the two employees have not dealt with the export consignment, it cannot be said that this Regulation had been breached by the appellant.
A two-member bench comprising Mr C J Mathew, (Technical) and Mr Ajay Sharma,(Judicial) observed that the impugned order has chosen to examine certain other cases about allegations levelled against the present appellant which is not in conformity with Customs Broker Licensing Regulations, 2013. The CESTAT set aside the impugned order in absence of reason for the continuation of revocation of the licence or forfeiture of the security deposit and allowed the appeal.
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