CESTAT Clears Customs Broker of License Revocation in Absence of Mala Fide & Wilful Misrepresentation

Access World Wide Cargo Vs Commissioner of Customs (CESTAT Bangalore)

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Bangalore, in the case of Access World Wide Cargo vs. Commissioner of Customs, has dropped the revocation of the customs broker’s license. The appellant, Access World Wide Cargo, held a Customs Broker License and was penalized under Regulation 14 read with Regulation 18 of the Customs Broker Licensing Regulations 2013/2018. The penalty of ₹50,000 was imposed as the customs broker allegedly failed to discharge its obligations by filing shipping bills under the claim of drawback for an exporter not eligible for it.

Background: The case originated when an offense was booked against the exporter, Aakansha Distributors (P) Ltd. (ADPL), for an alleged offense of ineligible drawback, which was confirmed through Order-in-Original No. 628/2019 dated 29.10.2019. During the proceedings, it was revealed that Access World Wide Cargo knowingly filed shipping bills claiming drawback for ADPL, even though the exporter was not eligible. Consequently, a penalty of ₹50,000 was imposed on the customs broker by the Commissioner.

Access World Wide Cargo appealed the decision, and the Tribunal, in Final Order No. 20666/2021 dated 10.08.2021, set aside the penalty. The Tribunal observed that the Commissioner had misled himself with incorrect facts, and there was no proof of mala fide and wilful misrepresentation by the customs broker. However, a show-cause notice was later issued, leading to the present impugned order imposing a penalty under the Customs Broker Licensing Regulations.

Tribunal’s Findings: The Tribunal considered the facts, noting that the earlier order was set aside not only due to the wrong provisions of Section 114AA of the Customs Act, 1962 but also on merits. The Tribunal emphasized that there was no proof of mala fide and wilful misrepresentation by the customs broker.

Please become a Premium member. If you are already a Premium member, login here to access the full content.