Case Law Details
Ganga Singh Vs Commissioner of Customs (Preventive) (CESTAT Kolkata)
The appeal was filed against Order-in-Original dated 15.07.2024, whereby the G-Card of the appellant was revoked and a penalty of Rs.50,000/- was imposed under Regulation 18 of the Customs Brokers Licensing Regulations (CBLR), 2018. The appellant, a G-Card holder employed with a Customs Broker firm, challenged the legality of the order.
It is an admitted fact that the appellant held a valid G-Card and was working with a Customs Broker firm at the relevant time. The shipments in question were filed as “by himself” by the IEC holder. However, based on records and the appellant’s own statement dated 10.10.2023, it was established that the appellant had provided assistance in uploading documents on the e-Sanchit system, thereby enabling fictitious exports. This statement was not retracted and was not alleged to have been made under coercion or undue influence.
The authorities invoked provisions of Regulation 10 of the CBLR, 2018, which prescribe obligations of Customs Brokers. The Tribunal, however, observed that the shipments were not handled by any Customs Broker and were filed on a self-basis by the IEC holder. Since the Customs Broker firm was not mentioned in the export documents, the Tribunal held that neither the firm nor the appellant in his capacity connected with the firm could be held liable under those provisions.
At the same time, the Tribunal noted that the appellant had acted in his individual capacity and had aided and abetted the fraudulent exports. The penalty had been imposed under Regulation 18, which provides for penalties for contravention of the regulations. The Tribunal examined the scope of Regulation 18 and observed that it permits imposition of a penalty not exceeding Rs.10,000/- on a G-card holder by the Deputy Commissioner or Assistant Commissioner, whereas higher penalties apply only to Customs Brokers or F-card holders.
The appellant argued that the Principal Commissioner did not have authority to revoke the G-Card. The Tribunal observed that Regulation 18 is silent on the power of revocation of a G-Card. It further noted that under Regulation 17(9), the competent authority may debar a G-card holder from transacting business for a maximum period of six months. In the present case, the appellant had been debarred for a period exceeding six months, which was beyond the statutory limit.
The Tribunal also observed that the department failed to establish any nexus between the appellant’s actions and the Customs Broker firm. It was not disputed that the export shipping bills were filed by the IEC holder on a self-basis. No cogent evidence was produced to link the Customs Broker firm with the alleged fraudulent exports.
In view of these findings, the Tribunal held that the revocation of the G-Card was not sustainable in law and directed its restoration. It also held that the penalty imposed was excessive and contrary to the statutory limit. Accordingly, the penalty was reduced from Rs.50,000/- to Rs.10,000/- in line with Regulation 18.
The Tribunal clarified that although the appellant had acted in an individual capacity in facilitating the exports, the legal framework did not permit revocation of the G-Card or imposition of penalty beyond the prescribed limit in the absence of statutory authority and supporting evidence.
Accordingly, the impugned order was modified to the extent of restoring the G-Card and reducing the penalty, and the appeal was disposed of.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The appellant, a G-Card Holder, aggrieved with the Order-in-Original No.01/TECH/CBLR/2024 dated 15.07.2024 has filed the impugned appeal, assailing the same. The impugned order has revoked the G-Card of the appellant besides imposing a penalty of Rs.50,000/-upon him in terms of Regulation 18 of the CBLR 2018.
2. It is an admitted position on record that the appellant Shri Ganga Singh was the holder of G-Card bearing NO.01/2018 dated 06.08.2018 and at the relevant time was employed as the G-Card holder with the Customs Broker firm M/s. Dutta Clearing Agent Pvt.Ltd. As noted from records the impugned shipments concerned with the case are made as “by himself” i.e. by the IEC holder. However, it is established from records – the self inculpatory statement of Shri Ganga Singh, that he a G-Card holder did provide appropriate assistance to enable the said fictitious exports in uploading the said documents on e-Sanchit. The said statement of Shri Ganga Singh dated 10.10.2023 admitting thereto, has not been retracted nor has it been alleged to have been given under any influence, threat, coercion etc.
3. While Regulation 10(d), 10(e), 10(i), 10(n) and 10(q) of the CBLR, 2018 as invoked in the proceedings by the authorities lay out the obligations cast upon the Customs Broker, we find that the impugned shipments under reference are not aided and assisted by a Customs Broker and were reportedly filed on self basis, may be assisted with the technical expertise and knowledge of one Shri Ganga Singh, who incidentally happened to be a co-employee of the CHA firm M/s. Dutta Clearing Agent Pvt. Ltd. at the material time. Since the Customs Broker firm does not find a mention on the export documents, as enclosed to the appeal filed before us, by the said Customs Broker firm we have categorically held the said Customs Broker firm &/or the appellant, as non-liable to penal consequences. However, it is evident from records that Shri Ganga Singh, G-Card holder has acted in his individual capacity, aided, abetted and enabled the carrying out of such fraudulent exports as indicated in the show cause notice dated 19.01.2024. The authorities have penalized the appellant in terms of Regulation 18 of the CBLR, 2018 vide the impugned order. We however note that Regulation 18 thereof reads as under :
18. Penalty
(1) The Principal Commissioner or Commissioner of Customs may impose penalty not exceeding fifty thousand rupees on a Customs Broker or F-card holder who contravenes any provisions of these regulations or who fails to comply with any provision of these regulations.
(2) The Deputy Commissioner or an Assistant Commissioner of Customs may impose penalty not exceeding ten thousand rupees on a G-card holder who contravenes any provisions of these regulations in connection with the proceedings against the Customs Broker.
(3) The imposition of penalty or any action taken under these regulations shall be without prejudice to the action that may be taken against the Customs Broker or F-card holder or G-card holder under the provisions of the Customs Act, 1962 (52 of 1962) or any other law for the time being in force.
4. The appellant has argued before us that the law does not empower the Principal Commissioner with any authority for revoking the G-Card of the appellant. Be as it may, leaving aside the merits of the matter for a while, we find that the Regulation 18 undoubtedly is silent on this aspect of the matter. Since the appellant was issued notice in terms of Regulation 17 of the CBLR, we find that sub-regulation 9 of Regulation 17 proviso empowers the Deputy Commissioner or the Assistant Commissioner to debar the G-Card holder from transacting business for a period of six months from the date of the order. Regulation 18 ibid lays down the upper cap of Rs.10,000/- for imposition of the penalty. As under the circumstances, the appellant has been debarred from transacting business well beyond six months – the period prescribed in law, and as the department has not been able to establish any nexus of the G-card holder, allegedly acting in his individual capacity vis-à-vis the Customs Broker, we are of the view that the G-card of the appellant now needs to be restored. We also modify the penalty imposed on the appellant to Rs.10,000/-(Rupees Ten Thousand only) as prescribed under Regulation 18.
5. Our aforesaid directions are in view of the circumstances that the authorities have not been able to dispute the fact of filing of the concerned export Shipping Bills as “himself”, by the IEC holder, and not been able to produce any cogent evidence on record to link up the CHA-Dutta Clearing Agent Pvt.Ltd. as connected with the fraudulent exports.
6. The order of the lower authority qua the appeal of Shri Ganga Singh is therefore modified to the extent aforesaid.
The appeal is disposed of thus.
(Order pronounced in the open court on 24.04.2026.)
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