In a significant case, the Chandigarh bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld the revocation of the Customs Broker License since the violation of the regulation of Customs Broker Licensing Regulation, 2018 (CBLR) was proven.
Ms Meenu Rathore, the appellant challenged the impugned order passed by the Commissioner of Customs Ludhiana whereby the Commissioner of Customs has revoked the licence of the appellant under regulation 17(1) of Customs Broker Licensing Regulation, 2018 for failure to comply with the provision of regulation 10 and 13(12) of CBLR, 2018, forfeiture of security under regulation 14 of CBLR, 2018 and imposition of penalty of Rs. 50,000/- under regulation 18 read with Regulation 14 of CBLR, 2018.
The appellant has been granted a customs broker licence by the Commissioner of Customs, Amritsar and was permitted to work as a customs broker at various customs stations. The appellant is engaged in the customs clearance of import and export. A show cause notice dated 19.07.2022 was issued by the Commissioner of Ludhiana under regulation 17(1) of CBLR, 2018.
It was found that Ms Meenu Rathore subleased its licence to Shri Girish Kumar of M/s Global Art Logistics in 2017 on the conditions that (i) she will get Rs. 15000/- as sublease cost (ii) an advance of Rs. 200000/- as pre-deposit (iii) office expenditure and Staff expenditure (for Customs Broker service) would be borne monthly by Shri. Girish Kumar.
On these allegations, Roshal Lal, Deputy Commissioner, Ludhiana was appointed as an inquiry officer and after completion of the inquiry submitted his report which was conveyed to the appellant and appellant was given sufficient time to file the objections against the inquiry report and after considering the objections of the appellant, the Commissioner of Customs revoked the Customs Broker license of the appellant and forfeited the security and imposed the penalty of Rs. 50,000/.
It was submitted that the inquiry report was not having the document identification number as required vide CBIC circular no. 37/2019 dated 17.11.2019. The said inquiry is a violation of the CBIC circular and is vague and deemed to have never been issued and cannot be given any credence.
Further, there is nothing brought on record regarding overseas payment received against the export of goods against the alleged 98 shipping bills. There is no report given by the inquiry officer regarding the involvement of the customs broker in the alleged export of goods against 98 shipping bills.
The appellant entered into an agreement dated 20.04.2017 with Sh. Girish Kumar Prop. M/s. Global Art Logistics for assisting in customs clearance. Girish Kumar who was authorized by the appellant conducted the business on behalf of the appellant and hence there is no violation of regulation 10(b) of CBLR, 2018.
He further submitted that G-card holders, Girish Kumar and Dinesh Bhardwaj acted beyond the scope of their employment and therefore the appellant cannot be vicarious held liable for such acts of the employee as per the second proviso to regulation 17 of CBLR, 2018 which empowers the department to initiate similar action against G-Card holders as well but no such action appears to have been initiated against the G-Card holders under CBLR,2018.
In light of various judgement, the two-member bench comprising Mr S S Garg, (Judicial) and Mr P Anjani Kumar,(Technical) concluded that the appellant is guilty of the violation of regulations 10(b), 10(d) and 10(n) CBLR, 2018.
While dismissing the appeal, the CESTAT upheld the impugned order passed by Commissioner Ludhiana.
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