A Customs Brokers has issued G cards to two persons who were not his employees against monthly rental. They were employed with another freight forwarding company who were involved in exporting narcotics. The Customs adjudicating authority, by holding that there is no dispute that the said Customs Broker has lent overt /covert support in subletting his CB agency by obtaining G cards for such persons who were not his employees and were not eligible G card holders unabashedly indulged in fraudulent exports of narcotics drugs. Hence The Customs Dept has revoked CB licence,forfeited security deposit & also imposed 20 Lakhs penalty. Subsequently, CB appealed before CESTAT. The case has almost dragged for 6 years then CESTAT has given his final order.
Let us see the important
observations of CESTAT in this case ;
1. The Proprietor of the CB firm in his statement recorded
under Section 108 Customs Act, 1962 unequivocally admitted that said G card
holders are not his employees and he had obtained the above mentioned G-Cards
for the said persons by mis-representing the fact to the Customs for
facilitating the activities of freight forwarders and he was receiving monthly
monetary consideration.
2. The issue is that the job of a Customs Broker is that of
trust as in the case of any agent. He is acting as agent of the Customs House
as well as agent of the exporter or importer. The license granted under CBLR is
for helping members of the public as well as the Customs House in activities
relating to import and export within or in the vicinity of the customs area. So
naturally he and his employees have apposition of trust with customs officers
and also have access to sensitive places which access can be misused for
smuggling of goods. The license cannot be seen as a means to earn rental income
either by giving blank signed Shipping Bills or Bills of Entry for a specific
consideration or to help some persons to get G cards and thereby gain trust of
customs officers and also access to the customs areas so that he can do
mischief. It is the bounden duty of a Customs Broker to employ persons of
dependable character and to continuously supervise them and also not to
authorize anybody else to represent him before the Customs House without his
knowledge. In this case he has helped two persons to get G cards stating that
they were his employees. He should have known the seriousness of the matter. We
do not accept the argument that it was an innocent mistake. If a person is so
innocent as to do such an act, it is only proper that he is not allowed to
continue as a CB because it is not known what type of problems he will cause
later in an innocent manner.
3. Hon’ble Andhra Pradesh High Court in the case of
Commissioner v. HB Cargo cited by the learned senior Departmental
Representative has held that the Tribunal while considering the appeal against
the Commissioner’s order regarding cancellation of CB licence should not be
swayed by the consideration of mis-placed sympathy and no sympathy can be shown
in the cases where the mis-conduct is of serious nature.
4. The argument that the cancellation of his licence has denied
him his means of livelihood and hence it should be restored is also is not a
sound argument. Such an argument makes sense while considering an appeal
against a suspension order and not while considering an appeal against a cancellation
order being considered after more than 6 years. The Appellant should have been
doing other jobs during these years. Even before the cancellation of his
licence, he was seeking rental income from his licence. When the appellant
engages his employees against payment of money instead of paying the employee,
the intention is clear. A message is sent that the so called employee is given
an opportunity to do whatever he wants using the identity card to earn his
livelihood. Now after a break of six years, when he has to restart his
business, the risk of such behaviour is higher and we are of the view that this
is not
a fit case where licence can be restored.
CUSTOMS
BROKER VERSUS COMMISSIONER OF CUSTOMS (IMPORT & GENERAL), NEW DELHI,
CESTAT, NEW DELHI order pronounced on 17.01.2012
In later review petition
only against 20 lakhs penalty, during May 2013, the CESTAT held as follows ;
“We make it clear that we
have not considered the penalty aspect leniently. But penal proceedings being
quasi-criminal in nature, taking into consideration the civil punishment the
appellant has already undergone as aforesaid and also making an overall
assessment of the facts depicted above as well as finding that the Customs
Broker was not an abettor to the offence committed, we consider that quantum of
penalty of Rs. 5 lakhs (Rupees five lakhs) shall be reasonable.
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