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Cus – Commr. revoked suspension of licence by concluding that Custom Broker had not abetted mis-declaration, however, imposition of penalty without citing any provision is not sustainable: CESTAT

2019-TIOL-2320-CESTAT-BANG

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH, BANGALORE
COURT NO. I

Appeal No. C/20081/2019-SM

Arising out of Order-in-Original No. COC-CUSTOMS-000-COM-16-18-19, Dated: 05.07.2018
Passed by Commissioner of CUSTOMS, COCHIN

Date of Hearing: 03.06.2019
Date of Decision: 03.06.2019


M/s NATIONAL TRADES AND AGENCIES
NTA CHAMBERS, HINA HOUSE, WILLINGDON ISLAND
COCHIN – 682003, KERALA

Vs

COMMISSIONER OF CUSTOMS
COCHIN-CUS CUSTOM HOUSE, WILLINGDON ISLAND
COCHIN – 682009, KERALA

Appellant Rep by: Mr Pradyumna G H Adv.
Respondent Rep by: Mr Gopakumar, Jt. Commissioner (AR)

CORAM: S S Garg, Member (J)

Cus – The appeal is filed against the impugned order whereby the Commissioner has revoked the suspension of Custom Broker license of assessee but imposed a penalty – Against the imposition of penalty, the assessee has filed this appeal – The assessee is a Custom Broker – DRI has received information that the importer by name M/s. FCIOEN Connectors Ltd. has evaded payment of custom duty by availing irregular exemption from payment of BCD in terms of Notfn 25/1999 – Cus. relating to import of Liquid Crystal Polymers by filing 211 Bills of Entry – Thereafter, investigation was conducted against the importer as well as the present assessee and documents were seized – The Commissioner of Custom after considering the report of the Inquiry Officer came to the conclusion that the assessee had neither abetted mis-declaration of goods nor benefited from their acts and therefore, the suspension of license was revoked but still imposed penalty of Rs.50,000/- without mentioning any provision under which the said penalty was imposed – Once the assessee had not committed any offence under the Customs Act as well as under the CBLR Regulations, then imposition of penalty is not warranted on assessee, same is set aside: CESTAT

Appeal allowed

Case laws cited:

Falcon India vs. CC: 2015 (326) ELT 728 (Tri.-Del.)… Para 4

Boria Ram vs. CC, New Delhi – 2017-TIOL-919-CESTAT-DEL… Para 4

FINAL ORDER NO. 20453/2019

Per: S S Garg:

The present appeal is directed against the impugned order dated 5.7.2018 passed by the Commissioner of Customs whereby the Commissioner has revoked the suspension of Custom Broker license of the appellant but imposed a penalty of Rs.50,000/-. Against the imposition of penalty, the appellant has filed this appeal.

2. Briefly the facts of the present case are that the appellant is a Custom Broker based at Cochin. Directorate of Revenue Intelligence has received information that the importer by name M/s. FCI OEN Connectors Ltd. has evaded payment of custom duty by availing irregular exemption from payment of Basic Custom Duty (BCD) in terms of Notification No.25/1999 – Cus. dated 28.2.1999 relating to import of Liquid Crystal Polymers by filing 211 Bills of Entry. Thereafter, investigation was conducted against the importer as well as the present appellant and during the investigation, statements of various persons representing the importer and the appellant were recorded under the provisions of Section 108 of the Customs Act, 1962 and documents were seized. After completion of the investigation, it was found that the importer had availed irregular exemption from payment of Basic Custom Duty in respect of the items imported by them and it was also found that the present appellant had failed to advise the importer about the correct classification of the imported goods and they were proceeded against for violation of provisions of Custom Broker Licensing Regulations (CBLR), 2013. Thereafter, on the basis of offence report dated 26.3.2018 issued by Directorate of Revenue Intelligence (DRI) to the jurisdictional Customs Commissionerate, it appeared that the appellant had contravened the provisions of CBLR, 2013 and accordingly, a show-cause notice dated 9.5.2018 was issued to the appellant to show-cause as to why Custom Broker License should not be revoked under Regulation 18 of CBLR, 2013 and why security deposit should not be forfeited under Regulation 18 of CBLR, 2013 and penalty of Rs.50,000/- should not be imposed. After considering the reply and submission of the appellant, the Commissioner of Custom vide impugned order held that the appellant has failed to advise the importer properly with regard to the correct classification of the goods and thus lacking in their efficiency. The Commissioner on the basis of the report of the Inquiry Officer found that the appellant had neither abetted mis-declaration of the goods nor benefitted from their acts, hence, the Commissioner revoked the suspension of the license but ordered for payment of penalty of Rs.50,000/-.

3. Heard both the parties and perused the records.

4. Learned counsel for the appellant submitted that the impugned order imposing penalty of Rs.50,000/- is not sustainable in law as the same has been imposed without any basis. He further submitted that the only allegation against the appellant in the show-cause notice is that he has overlooked certain details while filing the Bills of Entry. He further submitted that on the inquiry held by the investigating officer, the appellant was found to have not abetted in mis-declaration and therefore, the suspension of his license was revoked. He further submitted that imposition of penalty without specifying any provision of neither the Customs Act, 1962 nor the CBLR, 2013 is totally unsustainable. He further submitted that if a penalty has to be imposed on the Custom House Agent, the only Regulation is Regulation 22 of CBLR, 2013 but in the present case, since there is nothing to prove contravention of the Rules of CBLR, 2013 by the appellant, therefore, the imposition of penalty is not warranted by law. He further submitted that it is a settled law that in the matter of classification of goods, the Custom House Agent/ Custom Broker cannot be held culpable when the Bills of Entry are presented on the basis of the documents and information furnished by the importer. In support of his submission, he relied upon the decision rendered in the case of Falcon India vs. CC: 2015 (326) ELT 728 (Tri.-Del.) and Boria Ram vs. CC, New Delhi: 2017 (354) ELT 661 (Tri.-Del.) = 2017-TIOL-919-CESTAT-DEL wherein it has been held that when revocation of Broker’s License is not warranted, imposition of penalty is also not warranted. He also submitted that consistently since 2013, the appellants have been awarded certificate of honour as top Custom House Agent in the Cochin Port and he has produced those certificates on record.

5. On the other hand, the learned AR defended the impugned order and submitted that as per the Regulation 11(d) and 11(e), the appellant did not exercise due intelligence to ascertain the correctness of information. He further submitted that penalty has been imposed on the appellant after considering his conduct under CBLR Regulations.

6. After considering the submissions of both the parties and perusal of the material on record, I find that Commissioner of Custom after considering the report of the Inquiry Officer came to the conclusion that the appellant had neither abetted mis-declaration of the goods nor benefited from their acts and therefore, the suspension of license was revoked but still imposed penalty of Rs.50,000/- without mentioning any provision under which the said penalty was imposed. Further, I find that once the appellant had not committed any offence under the Customs Act as well as under the CBLR Regulations, then imposition of penalty is not warranted on the appellant. Further, I find that the decision relied upon by the appellant cited supra are squarely applicable in the present case and by following the ratio of the said decision, I am of the considered view that imposition of penalty of Rs.50,000/- is not warranted under law and therefore, I set aside the same by allowing the appeal of the appellant.

(Operative portion of the Order was pronounced in Open Court on 03.06.2019)

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