Legal principle

A Customs Broker's contravention of the obligations under the CBLR attracts disciplinary sanction—revocation, forfeiture of security and penalty—even without proof of criminal intention, since the agent cannot plead absence of mens rea as an excuse for failure to act diligently in terms of the Regulations.

Court decision

The Delhi High Court dismissed the appeal, holding that no case for interference was made out: the revocation of the Customs Broker licence, forfeiture of the security deposit and Rs. 50,000 penalty, as imposed by the Commissioner and upheld by CESTAT (with the Regulation 10(e) charge dropped there), were confirmed against the appellant.

Facts

M/s Anax Air Services Pvt. Ltd., a Customs Broker (Licence No. R-5/93), filed three shipping bills at Mundra Port in the name of M/s Shivam Enterprises for purported export of mangoes and pomegranates, but on specific intelligence the consignments were examined and all five containers were found loaded with onions, whose export was prohibited, the goods being 100% mis-declared in description and classification. The goods were confiscated under Section 113(d) and seized under Section 110 of the Customs Act, 1962. The statement of the firm's G-card holder recorded under Section 108 disclosed that he took the clearance work from one Shri Raviraj Sinh Jadeja at Rs. 1,200 per container, handled it without KYC verification and without meeting the exporters, and that the licence was being used by many persons who monetarily compensated the company. The Commissioner suspended the licence under Regulation 16(1) of CBLR, 2018, and after inquiry and a show-cause notice alleging violations of Regulations 1(4), 10(a), 10(d), 10(e) and 10(n), revoked the licence, forfeited the entire security deposit and imposed a Rs. 50,000 penalty under Regulations 14, 17 and 18. CESTAT upheld these measures while dropping only the Regulation 10(e) allegation, leading to this appeal under Section 130.

Key provisions

• Regulation 10(n), Customs Brokers Licensing Regulations, 2018 — Obligations of Customs Broker
• Section 108, Customs Act, 1962 — Power to summon persons to give evidence and produce documents
• Regulation 1(4), Customs Brokers Licensing Regulations, 2018 — Short title, commencement and application
• Regulation 17, Customs Brokers Licensing Regulations, 2018 — Procedure for revoking license or imposing penalty
• Regulation 18, Customs Brokers Licensing Regulations, 2018 — Penalty
• Section 130, Customs Act, 1962 —  Appeal to High Court
• Regulation 16(1), Customs Brokers Licensing Regulations, 2018 — Suspension of license
• Section 113(d), Customs Act, 1962 — Confiscation of goods attempted to be improperly exported
• Regulation 14, Customs Brokers Licensing Regulations, 2018 — Revocation of licence or imposition of penalty
• Section 110, Customs Act, 1962 — Seizure of goods, documents and things