Customs, Excise and Service Tax Appellate Tribunal

Jaiswal Import Cargo Services Limited Vs. Commissioner of Customs, Airport & General

MANU/CE/0262/2019

07.08.2019

Customs

Revocation of licence can only be justified in presence of aggravating factors that allow infraction to be labelled grave

The Appellant is a Customs Broker with Pawan Kumar Jaiswal as one of its Directors. Department observed the violation of Regulation 11(d) and (e) of Customs Brokers Licensing Regulations, 2013, (CBLR) on the part of the Appellant in a case of import of assorted birthday candles by Ess Enn Impex importer through S. Guha Sarkar & Co. Ltd. vide Bill of Entry. The Department after intercepting and examining the goods observed that, the candles were described as sparkling flower candles.

Commissioner of Customs, vide Order had revoked the Customs Broker Licence of the Appellant and forfeited the whole amount of security deposit of Rs. 75,000. However, no separate penalty was imposed upon Custom Broker in view of the said forfeiture. Being aggrieved of the said Order, the Appellant is before present Tribunal.

Question involved in present case is whether the imported goods i.e. assorted birthday candles can actually be classified as fireworks/pyrotechnics and that, whether the appellant failed to inform the correct classification about the impugned birthday candles to the importer intentionally and as such, the license has rightly been revoked.

Fireworks are considered as low hazard explosives whose sale is regulated by Explosives Rules, 2008 framed under Explosives Act, 1884. The Act does not define the fireworks nor do said Rules. Literally, it is an object that burns or explodes with coloured lights and loud sounds and is used for entertainment.

These reports have admission that, goods in question are candles. However, the Central wig of the candles contains such chemicals as are the contents of fireworks. Thus, the goods are such that a small part thereof contains such chemical as are required to manufacture fireworks. If similarity of contents is the criteria to classify than even match stick should be classified as firework, in the given circumstances and in view of the principle of common parlance/in terms of trade, it is held that, goods are not fireworks.

The present Appellant admittedly has no concern with the intercepted consignment. He rather admittedly was the CHA for the said two previously cleared consignments. The adjudicating authorities have gone beyond the limit while cancelling the Custom Broker Licence of Jaiswal Import Cargo Services Limited whose consignment were never intercepted nor ever got examined by CFSL/PESO simply because his G-Card Holder was same as was for Guha Sarkar & Co. Ltd. whose consignment was intercepted. Question of cancellation of licence because of subsequent interception of consignment of similar goods is held to be highly unjustified which otherwise stands barred by principle of estoppel.

No doubt, CHA is a link between the Customs Authorities and the importers and the CBLR Regulations imposes obligation upon them which have to be taken as mandatory but law is also settled that not any and every infraction of the CHA Regulations either Regulation 13 or elsewhere leads to the revocation of license rather in line with a proportionality analysis and only grave and serious violation justify revocation. Present Tribunal in the case of Ashiana Cargo Services Vs. Commissioner of Customs (I & G), further clarified that, revocation of licence under Rule 20(1) can only be justified in the presence of aggravating factors that allow infraction to be labelled grave. It is the presence of mens rea to act fraudulent or an act of corruption due to intentional violation of CBLR Regulations with intent to evade duty which invites the punishment as that of cancellation of CB Licence. This punishment cannot be proportionate to the mere absence of due diligence.

As far as Jaiswal Import Cargo Services Limited is concerned, there is nothing on record to even show the absence of due diligence on their part. Thus, there is no reason for the cancellation of Appellant's CHA license. The penalty is also opined to be far beyond the proportion. Hence, same is also held liable to be set aside. The Order under challenge is set aside. Appeal allowed.

Tags : License Cancellation Legality

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