La Freight Lift Pvt Ltd Vs Commissioner of Customs (CESTAT Chennai)
These two interconnected appeals arose from a common Order-in-Original passed by the Commissioner of Customs concerning disciplinary action against a licensed customs broker. The customs broker challenged the forfeiture of its entire security deposit, while the Revenue appealed against the authority’s decision not to revoke the customs broker licence under the Customs Broker Licensing Regulations, 2013 (CBLR 2013).
The matter originated from an investigation conducted by the Docks Intelligence Unit, Chennai, into an attempted smuggling of Red Sanders concealed as mild steel round pipes under a shipping bill dated 05.02.2014. The customs broker had handled the clearance of the export consignment. During the investigation, statements were recorded from the broker’s Managing Director and branch managers, searches were conducted at its offices, and documents related to the exporter were seized. The Department alleged that the broker failed to obtain proper authorisation from the exporter, dealt with an unauthorised individual suspected to be the main smuggler, and did not verify the exporter’s credentials or source of payments. These acts were alleged to constitute violations of multiple obligations under Regulation 11 of CBLR 2013.
Based on these allegations, the broker’s licence was suspended in April 2014. A show cause notice dated 02.06.2014 proposed revocation of licence, forfeiture of security deposit, and penalty. The Inquiry Officer, in a report dated 28.05.2015, held that violations of Regulations 11(a) and 11(d) were proved but found no violation of Regulations 11(e) and 11(n). After personal hearing, the licensing authority concluded that although there was failure under Regulation 11(d), there was substantial compliance with Regulations 11(a) and 11(n). Taking a lenient view, the authority revoked the suspension but ordered forfeiture of the entire security deposit.
