CESTAT Upholds Order Forfeiting Entire Security Deposit By Customs Broker

The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the order forfeiting the entire security deposit by customs broker.

The bench of P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) have observed that the gravity of the alleged offence, if at all committed by the appellant-customs broker does not call for capital punishment resulting in the suspension of his Customs Broker License. 

Background

A Show cause notice revealed that the officers of the Docks Intelligence Unit of Customs House, Chennai appeared to have examined an imported consignment of goods, which were imported in the name of M/s. V.J. Enterprises. 

The consignment was nothing but limestone and that the import documents were given to one Mr.Deva who appeared to have cleared the goods through the appellant/Customs House Agent. 

The investigation was further carried out during the course of which the officers of DIU proceeded to record statements of the concerned persons. The SCN appears to have been issued to as many as six persons and the appellant herein is the sixth notice; both the representatives of the contesting parties admitted during the course of hearing before us that the other noticees have not filed any appeals against any demand made against them after adjudication. 

The allegation in the SCN against the appellant is in the SCN; it is based on the statement given by the Manager of the appellant firm. The said Manager has only explained that the appellant firm did not know about the importer or any of the other noticees earlier. 

The customs clearance of the subject Bill of Entry under RMS was on 24.11.2012, but however, the containers were transported to the godown only on 26.11.2012 and it was on the very same day that the DRI officers visited their office who revealed that poppy seeds were concealed within the limestone powder cargo.

The Commissioner of Customs passed an order of suspension of the Customs Broker’s license under the provisions of Regulation 19(1) of CBLR 2013, whereby the suspension of the Customs Broker license was ordered with immediate effect, until further orders.

An opportunity of personal hearing was also granted to the appellant, and it appears that the appellant did appear and present its case. It appears that thereafter the Commissioner passed Order which, she proceeded to revoke the license of the Customs Broker, apart from ordering forfeiture of the entire amount of security deposit made by the Customs Broker. 

Read More: Service Tax Proceedings To Be Completed Within One Year From Notice: Patna High Court

Conclusion

The tribunal held that Initially, the order of suspension of license was passed in 2014, thereafter the impugned order was passed in the year 2015 and since then, the appellant is out of business which is perhaps its only source of income. The appellant must have suffered enough financially which itself is a deterrent factor and hence, to fasten the appellant with a permanent sealing down of its customs broker license may not be called for since the consequences of revocation are very serious since, apart from the members of own family, there may be employees and the members of their family who would be dependent for their sustenance/survival.

The tribunal ordered for re-issuance of its Customs Brokers License subject to fulfilment of the prescribed procedural requirements, however, the tribunal did not propose to interfere with impugned order insofar as the forfeiture of security deposit.

FAQs

Case Details

Case title: M/s. RSM Clearing Services Pvt. Ltd. v/s The Commissioner of Customs (Seaport-Import)

Citation: Customs Appeal No. 40339 of 2016 

Counsel for the Petitioner: A.K. Jayaraj

Counsel for the Respondent: Anoop Singh

Date: 27.09.2024

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