Case law

Custom, Excise & Service Tax Tribunal · 11 Apr 2022

International Cargo Services vs Ahmedabad

Legal principle

Revocation of a Customs Broker's licence must be commensurate with the gravity of the offence and, being an extreme and harsh punishment, should be imposed only in the rarest of rare cases of serious irregularity or mala fide conduct — a broker whose role is confined to documentation and ends when the bill of entry is given out of charge cannot be punished for theft or seal/weight discrepancies attributable to the custodian, transporter or shipping line.

Court decision

The Tribunal allowed the appeal and set aside the Order-in-Original revoking the Customs Broker licence and imposing the Rs. 30,000 penalty, holding that the appellant Customs Broker could not be held responsible in any manner under Regulation 10(e) (and the charges under 10(d) and 10(m) could not stand); it declined to give a final finding on limitation since the matter was decided on merits.

Facts

M/s International Cargo Services, a licensed Customs Broker, was appointed by M/s State Trading Corporation for import of a cargo of silver bars which arrived via Nhava Sheva and transhipment by CONCOR to ICD Khodiyar, where a shortage (theft) was noticed. A show cause notice dated 11.12.2020 was issued under the Customs Brokers Licensing Regulations, 2018, culminating in Order-in-Original dated 12.10.2021 by the Commissioner of Customs, Ahmedabad, revoking the appellant's Customs Broker licence and imposing a penalty of Rs. 30,000/-. The charges were violation of Regulation 10(d) and 10(m) of CBLR 2018, namely failure to give advance intimation to CONCOR of the high-value cargo and failure to have it shifted to the designated warehouse immediately on arrival (it lay at the unloading place from 02.02.2019 to 04.02.2019), along with a seal-verification objection. The appellant appealed to CESTAT, West Zonal Bench, Ahmedabad.

Key provisions