The Customs, Excise & Service Tax Appellate Tribunal New Delhi revoked the customs broker license for violations, but the appellant spared permanent consequences.
The appellant has been issued Customs Broker License in the year, 2010 by the Commissioner of Customs (Airport & General), New Delhi, which is valid upto 22.11.2029. The letter dated 25.02.2022 was issued by the Additional Director, Directorate of Revenue Intelligence (DRI), Delhi Zonal Unit (DZU) regarding violations committed by various Customs Brokers, namely M/s Sanjeev Kumar, M/s Expert Cargo Movers, M/s Anurag Tiwari, M/s Anubhav Cargo Movers, M/s Phenomenal Logistics and Shyam Singh, the appellant herein, in relation to gross mis-declaration and undervaluation in import of electronic goods by various importers, where the value of the imported goods declared before Customs was roughly 5% of the actual value of the goods.
In fact, on many occasions, the declared value of the goods imported from Hong Kong was less than even the freight amount and it was admitted by the accused that the under-declared portion of the value of the goods including the prepaid freight was remitted abroad through hawala and non-banking channel.
The two member bench of Binu Tamta Member (Judicial) and Hemambika R. Priya Member (Technical) found that it is not the stand of the appellant that his statement has been recorded by the department under threat, duress or coercion. In the absence of any such plea the statement made by him under section 108 of the Act are binding on him and the same cannot be discarded on the ground that the same has been retracted.
The bench opined that there is no violation of the principles of natural justice in denying the appellant an opportunity to cross examine the two witnesses in view of the voluntary confessional statement made by him under section 108 of the Customs Act.
The tribunal did not agree with the said submission of the appellant and relied on the statement made by the appellant under section 108 that since he did not have much business in his Customs Broker firm and Sh. Atul Kapoor had contacts with various importers but since he did not have the FCard therefore, he provided a Customs Broker License to him for monetary consideration. This is sufficient to hold that the appellant had sublet his Customs Broker License for monetary gain and thereby violated the provisions of Regulation 1(4) of CBLR, 2018.
The bench observed that the fact that the appellant had sublet the Customs Broker License for monetary gain of Rs. 25,000/- or Rs. 50,000/- p.m., rest of the work was done entirely by Atul Kapoor and obviously the appellant would not have any knowledge either of the firms, their Proprietors or the KYC documents. Thus, violation of Regulation 10(a) and 10(n) are established.
The bench concluded that there was no active or passive role of the appellant and no aggravating circumstances have been pointed out by the department that would justify the infraction to be grave. The imposition of the punishment of revocation of the licence in that situation is not justifiable as the gravity of the infractions alleged cannot be said to be so serious as to warrant such a grave and harsh punishment which would mean that his licence will be permanently inoperative for all times to come.
The bench viewed that punishment has to commensurate with the misconduct and the charges against the appellant are not so grave that extreme punishment of revocation of license is called for. Thus, the impugned order in so far it has ordered for revocation of the licence of the appellant deserves to be set aside, however the forfeiture of the security deposit and penalty of Rs. 50,000/- imposed under Regulation 18 of CBLR, 2018 needs to be maintained.
Case title: Shyam Singh v/s Commissioner, Customs
Citation: Customs Appeal No. 50033 of 2023