Case Law Details
RDR Clearing Agent Vs Commissioner of Customs (CESTAT Kolkata)
CESTAT Kolkata held that revocation of customs broker licence for violation of post import condition of the exemption notification by the importer unsustainable as customs broker has a limited role of filing bill of entry and at no stretch of imagination can be held liable for violation of post import condition.
Facts- The appellant handled import consignment of the importer, wherein, exemption under notification no. 32/97-Cus was claimed against ‘jobbing-cum-export’ bond. It is alleged that total nine consignments were imported, out of which eight consignments were assessed and allowed the exemption benefit. However, with respect to one consignment, instead of re-export the same was diverted to home consumption.
A Show Cause Notice dated 29.06.2018 was issued under CBLR, 2013, by the Respondent under Regulation 20(1) of CBLR 2013, alleging violation of Regulations 11(d),11(f), 11(m) and 17((9) of CBLR 2013. On conclusion of the Inquiry Proceedings, the “Respondent”, vide order dated 27-12-2018, ordered revocation of the Appellant’s Custom Broker License NO.CA/LC/02/2011 and forfeiture of the whole of the Security Deposit, amounting to Rs. 75,000 under Regulation 18 of the Customs Brokers Licensing Regulations, 2013 and hence the instant appeal.
Conclusion- The Custom Broker has a limited role of filing the bills of entry as per the instructions of importer and the authority of deciding the admissibility of any Exemption Notification was exclusively bestowed on Assistant/ Deputy Commissioner concerned as the Proper Officer under Section 143 of the Customs Act, 1962. In case of any violation of terms and conditions of the Exemption Notification by the importer, invocation of the terms and the conditions of Bond including that of re-export Bond is the exclusive liability of the Departmental Officer and in no way the responsibility can be shifted to the Customers Broker. The appellant as the customs broker at no stretch of imagination can be held liable for violation for the post import conditions of the Exemption Notification against which the consignment was cleared since no such authority has been bestowed on the appellant. Thus, we hold that the Appellant cannot be held responsible for the violation, if any, committed by the importer.
Held that the impugned order revoking the Appellant’s Custom Broker License and forfeiture of the Security Deposit, amounting to Rs. 75,000 under Regulation 18 of the Customs Brokers Licensing Regulations, 2013, is not sustainable and therefore, we set aside the same.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The instant appeal is filed against revocation of the Appellant’s Custom Broker License NO.CA/LC/02/2011 and forfeiture of the Security Deposit, amounting to Rs. 75,000 under Regulation 18 of the Customs Brokers Licensing Regulations, 2013 [Now Regulation 14 of the Customs Brokers Licensing Regulations, 2018]by the Commissioner of Customs (Prev.), Kolkata (hereinafter referred to as the “Respondent”), vide order No. CCP/WB/Tech/04/2018 dated 27-12-2018.
2. Briefly stated facts of the case are that M/s. Exim International, Kolkata and its Proprietor Shri Ashis Rana imported ten consignments of “Food Supplement”, through Air Cargo Complex, Kolkata. All the ten consignments were imported pursuant to a “job-work contract” dated 04.05.2016 between the importer and the Dubai based Company, M/s. B M L Gifts Trading LLC and all the imports were made after advance remittance of foreign exchange through banking channel. For the clearance of first consignment Bill of Entry No. 5656471 dated 16.06.2016 was filed by some other Customs Broker. The Bill of Entry was assessed to duty and the assessed duty was paid. However, clearance of the consignment was withheld pending ‘no objection’ (NOC) from FSSAI. At this stage, the overseas supplier who was known to one of the Appellant’s employee and “G” card holder namely Tapas Biswas who used to handle import and export consignments on behalf of the Appellant’s Customs Broker firm, contacted him in September, 2016 and requested for facilitating the clearance of the consignment on behalf of the importer M/s. Exim International. Tapas introduced the importer to the then Deputy Commissioner of Customs and the Appraiser of Customs , Air Cargo Complex, Kolkata, where the consignment was lying pending clearance and as discussed with them, the importer sought reassessment of consignment vide Bill of Entry No.5656471 dated 16.06.2016 under Notification No.153/94- Cus, against re- export Bond, which was accordingly assessed and cleared. The competent authority of FSSAI granted clearance of the import consignment subject to the conditions that the full quantity of import goods was to be exported back and no portion thereof was to be loaned, sold transferred and otherwise disposed of for home consumption.
3. During the period October, 2016 to June, 2017, nine more consignments of “Food Supplements” were imported by M/s. Exim International, Kolkata from Dubai. Tapas, on instruction from the importer filed nine Bills of Entry for clearance of the aforesaid nine consignment of “Food Supplements” claiming exemption under Notification No.32/97-Cus. against “jobbing-cum-export” Bonds and Bank Guarantees executed by the importer. Out of the nine consignments, eight consignments of “Food Supplements” were assessed and allowed clearance by the Customs Authorities extending the exemption benefit under Notification No.32/97-Cus with full duty concessions against “jobbing-cum-export” Bonds and Bank Guarantee for the differential duty amount. The last consignment of “Food Supplement” covered under Bill of Entry No. 2001938 dated 07.06.2017 was seized by DRI (KZU). Enquiry / Investigation initiated in to the imports of “Food Supplements” by M/s. Exim International, Kolkata revealed that they contravened the terms and conditions of the reexport bond and instead of re-exporting, they diverted the goods for home consumption which culminated in issuance of the Show Cause Notice dated 06.04.2018, which has since been adjudicated imposing penalty inter alia against both the Appellant and its employee Tapas against which appeals in separate proceedings are pending .
4. Treating the said SCN as an offence report, a Show Cause Notice dated 29.06.2018 was issued under CBLR, 2013, by the Respondent under Regulation 20(1) of CBLR 2013, alleging violation of Regulations 11(d),11(f), 11(m) and 17((9) of CBLR 2013. On conclusion of the Inquiry Proceedings, the “Respondent”, vide order dated 27-12-2018, ordered revocation of the Appellant’s Custom Broker License NO.CA/LC/02/2011 and forfeiture of the whole of the Security Deposit, amounting to Rs. 75,000 under Regulation 18 of the Customs Brokers Licensing Regulations, 2013 and hence the instant appeal.
5. In their grounds of appeal, the Appellant has made the following submissions:
(i) The respondent has failed to appreciate that mere acquaintance of one of the appellant’s employees with the overseas supplier or the importer and introducing the importer of the Deputy Commissioner of Customs or Appraiser Customs in Air Cargo Complex do not constitute abetment to invite penal consequences of law.
(ii) The respondent has failed to appreciate that it is up to the importer to claim the exemption benefit and the admissibility thereof has to be decided by the Deputy Commissioner of Customs Air Cargo Complex as the Proper Officer and the Appellant as Customs Broker has absolutely no say over the admissibility of any Exemption Notification.
(iii) The respondent has ignored the factual antecedents that the first Consignment against Bill of Entry No. 5656471 dated 16.06.2016 has been cleared against Notification 153/94-CUS against re-export Bond accepted by the Deputy Commissioner of Customs Air Cargo Complex, Kolkata and the subsequent eight consignments of “Food Supplements” have been assessed and cleared extending the benefits of Exemption Notification No.32/97-Cus against “jobbing -cum-export” Bonds and Bank Guarantee. The Bill of Entry No. 2001938 dated 07.06.2017 was filed for clearance of the 10th Consignment claiming exemption benefit vide Notification No.32/97-Cus. which was intercepted by DRI resulting in the impugned proceedings. All these assessments were conditional assessment under Section 143 of the Customs Act, 1962 for which the proper officer was the Assistant/ Deputy Commissioner concerned. The acceptance of the claim of assessment against certain conditional Exemption Notification and the acceptance of Bond and Bank Guarantee in this regard submitted by the importer was the exclusive responsibility of the DC concerned as the Proper Officer and as a Customs Broker, the appellant had neither any jurisdiction nor any say in this regard.
(iv) The Appellant had limited role of filing the bills of entry as per the instructions of importer and the authority of deciding the admissibility of any Exemption Notification was exclusively bestowed on Assistant/ Deputy Commissioner concerned as the Proper Officer under Section 143 of the Customs Act, 1962.
(v) In case of any violation of terms and conditions of the Exemption Notification by the importer, invocation of the terms and the conditions of Bond including that of re-export Bond is the exclusive liability of the Departmental Officer and in no way the responsibility can be shifted to the Customers Broker, the appellant herein.
(vi) The Appellant customs broker had limited role of facilitating the clearance of imported goods as assessed, examined and given clearance under section 47 of the Customs Act 1962 by the Proper Officer of Customs. The appellant as the customs broker at no stretch of imagination can be held liable for violation for the post import conditions of the Exemption Notification against which the consignment was cleared since no such authority has been bestowed on the appellant.
(vii).Accordingly, they prayed for setting aside the impugned order revoking their license.
6. The Ld. A.R. reiterated the findings in the impugned order.
7. Heard both sides and perused the appeal documents.
8. We find that Appellant’s Custom Broker License was revoked and Security Deposit of Rs. 75,000 was forfeited under Regulation 18 of the Customs Brokers Licensing Regulations, 2013, on the basis of an investigation initiated by DRI in to the imports of “Food Supplements” by M/s. Exim International, Kolkata. The investigation revealed that the importer has contravened the terms and conditions of the re-export bond and instead of re-exporting, they diverted the goods for home consumption. Accordingly, Show Cause Notice dated 06.04.2018,was issued which was adjudicated wherein penalty was imposed against both the Appellant and its employee Tapas. The appeal filed by the Appellant against that order is still pending.
9. The contention of the Appellant is that the importer’s claim of exemption benefit and the admissibility thereof has to be decided by the Deputy Commissioner of Customs Air Cargo Complex as the Proper Officer and the Appellant as Customs Broker has absolutely no say over the admissibility of any Exemption Notification. We agree with the contention of the Appellant. The Custom Broker has a limited role of filing the bills of entry as per the instructions of importer and the authority of deciding the admissibility of any Exemption Notification was exclusively bestowed on Assistant/ Deputy Commissioner concerned as the Proper Officer under Section 143 of the Customs Act, 1962. In case of any violation of terms and conditions of the Exemption Notification by the importer, invocation of the terms and the conditions of Bond including that of re-export Bond is the exclusive liability of the Departmental Officer and in no way the responsibility can be shifted to the Customers Broker. The appellant as the customs broker at no stretch of imagination can be held liable for violation for the post import conditions of the Exemption Notification against which the consignment was cleared since no such authority has been bestowed on the appellant. Thus, we hold that the Appellant cannot be held responsible for the violation, if any, committed by the importer.
10. The Appellant drawn our attention to the Tribunal’s decision in the case of GND Cargo Movers reported in 2017 (357) ELT 1184 (Trib-Delhi) wherein it has been held that the requirement of Customs Broker to exercise due diligence to ascertain the correctness of any information which he imparts to clients with reference to work relating to clearance of cargo would arise only when the Customs Broker is aware of the importer’s motive to mis-declare. In that case in each and every case of mis-declaration by the exporter, it can be concluded that Customs Broker did not suitably inform his clients. There has to be some evidence on record to show that either the Customs Broker was aware of such misdeclaration and suppressed the same with a mala fide mind or he has taken efforts to get the goods cleared from the Customs on the basis of wrong declaration made by him or has connived with the importer so as to aid and abet the wrong declaration which is not the case here. Besides, in the case of Bajaj Enterprises reported in 2017 (347) ELT 675 (Tri-Bom) it has been held inter alia that the need to advice a client would arise only if the agent was aware of any intent to mis declare. As long as there is no evidence or finding that the Customs Broker was aware of such an intent on the part of the client, there may be no reason for the Customs Broker to believe that the client was in need to advice the client to desert from their proposed action. No such allegation has been brought out against us because there could be none in the absence of which the allegation of violation of Regulations 11(d),11(f) & 11(m) of CBLR,2013 [Now Regulation 10(d), 10(f) & 10 (m) of CBLR,2018], are factually and legally unsustainable and liable to be dropped.
11. It has been held in World Cargo Movers vs. Commissioner reported in 2006 (202) ELT 729 (Trib-Mum) that illegal acts/misdeeds of employee cannot be said to have been committed with preconcert, knowledge or connivance of appellant or in the course of his employment with appellant, hence, appellant cannot be held vicariously liable for such acts particularly when there is no other violation on the part of appellant. Besides, it has been held in ARK Logistics (P) Ltd. v. CC,2010 (261) E.L.T. 648 (Tri.-Bang.) ; Shri Ganesh Shipping Agency v. CC2011 (271) E.L.T. 236(Tri.-Bang.); and Falcon Air Cargo Travel Pvt. Ltd. v. CC,2002 (140) E.L.T. 8 (Del.); that the Customs Broker cannot be held liable for the acts of employee and in all these case the order of revocation of licence have been set aside.
12. By following the decisions cited above, we hold that the impugned order revoking the Appellant’s Custom Broker License and forfeiture of the Security Deposit, amounting to Rs. 75,000 under Regulation 18 of the Customs Brokers Licensing Regulations, 2013, is not sustainable and therefore, we set aside the same.
10. In view of the above discussion, we set aside the impugned order and allow the appeal filed by the Appellant.
(Dictated and pronounced in the open Court)
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