Customs brokers must exercise due diligence and comply with regulations; failure to do so can result in license revocation and penalties.

JUDGMENT :

A.K. Jayasankaran Nambiar, J.

This Customs Appeal impugns the final order dated 22.05.2024 of the Customs, Excise and Service Tax Appellate Tribunal [CESTAT], Bangalore in Customs Appeal No.20049/2023.

2. The brief facts necessary for disposal of this Customs Appeal are as follows:

The appellant was a Customs Broker and holder of license No.102 issued by the Commissioner of Customs under Regulation 7 of the Customs Broker Licensing Regulation [CBLR], 2013. The said license was valid upto 05.01.2027. With a view to operate and supervise the activities of the appellant, the appellant had designated G-Card holders who are authorised persons to ensure compliance with the statutory requirements and to ensure smooth running of the activities in the Cochin Port. The appellant states that it would also supervise the G-Card holders by conducting random checks of the documents and other details furnished by the importer/exporter.

3. In relation to an import of a consignment that was declared as Diplomatic Cargo, an inspection was conducted by the Officers of the Preventive Department of the Cochin Commissionerate on 05.07.2021, and a quantity of 30.245 kgs. of gold was seized from the consignment declared as Diplomatic Cargo, and in respect of which, Bill of Entry No.8045238 dated 01.07.2020 had been filed by the appellant. Immediately thereafter, an offence report dated 08.10.2021 was filed with the Commissionerate, placing reliance on which, a show cause notice No.21 of 2011 dated 28.12.2021 was served on the appellant under Regulation 17(1) of the CBLR, 2018. By the show cause notice, the appellant was directed to show cause as to why its customs broker license should not be revoked under Rule 14 of the CBLR, 2018 on account of violation under Regulation 10(a), (d), (e), (m) and (n) respectively and penalty should not be imposed on the appellant under Regulation 18 of the CBLR, 2018. Although the appellant furnished a preliminary reply to the show cause notice, the Commissioner appointed an Enquiry Officer to conduct an enquiry in the matter and furnish a report before him.

4. On receipt of the notice from the Enquiry Officer, the appellant appeared before him and made his submissions against the allegations in the show cause notice. The Enquiry Officer thereafter submitted his enquiry report dated 29.07.2022, and a copy of the same was sent to the appellant for its comments. The appellant later submitted a detailed representation against the enquiry report and thereafter appeared before the Commissioner for a hearing. The Commissioner, however, rejected the explanation offered by the appellant and confirmed the proposals in the show cause notice. By his order dated 25.10.2022, the Commissioner revoked the customs brokers license issued to the appellant with immediate effect, and imposed a penalty of Rs.50,000/- under Regulation 14 read with 18(1) of the CBLR, 2018. The Commissioner also directed a forfeiture of the entire amount of security deposit that had been paid by the appellant.

5. Aggrieved by the order of the Commissioner, the appellant preferred the appeal before the CESTAT. The Tribunal, on a detailed consideration of the appeal, dismissed the appeal by confirming the order of the Commissioner. In the present appeal, the appellant impugns the final order of the Tribunal.

6. We have heard Sri.Baby M.A., the learned counsel for the appellant and Sri.R.Harishankar, the learned Standing Counsel for the respondent Department.

7. In the appeal before us, the appellant raises the following substantial questions of law:

“a. Whether Adjudicating authority had committed grave error by not extending an opportunity for cross examination of Customs officers Regulation 17(4) of the CBLR, 2018 since 33 consignments were cleared through Diplomatic Channel by claiming the benefit of duty exemption;

b. Whether Adjudication authority had committed grave error by not producing relevant documents to the appellant at the time of issuance of Sho