Commissioner of Customs Vs S. Murugan (CESTAT Chennai)
The three appeals arose from two Orders-in-Original passed under the Customs Brokers Licensing Regulations (CBLR), 2013. The Customs Broker challenged the forfeiture of security deposit, while the department challenged the revocation of suspension and the decision not to revoke the licence despite findings of regulatory violations. The proceedings originated from a DRI investigation into alleged fraudulent drawback exports through dummy firms.
The Inquiry Officer held that violations of Regulations 11(a), 11(b), 11(n), and 17(9) of CBLR, 2013 stood established, while allegations under Regulations 11(d), 11(e), and 17(5) were not sustained. The adjudicating authority ordered forfeiture of the security deposit but refrained from revoking the licence.
The Tribunal observed that the issue in the proceedings was not whether the Customs Broker had participated in fraudulent drawback exports, but whether it had complied with its obligations relating to due diligence, verification, and supervision under the licensing regulations. The evidence showed that export consignments linked to suspicious transactions were handled through the Customs Broker’s licence, that Delhi operations were substantially managed through intermediaries, and that effective supervision by the licence holder was lacking. The Tribunal also found inadequate verification of exporters and Import Export Code holders.
