CESTAT Kolkata on G-Card Holder’s Liability and Penalty Limits Under CBLR 2018
The decision in Ganga Singh Vs Commissioner of Customs (Preventive) by the CESTAT Kolkata addresses two important issues under the Customs Brokers Licensing Regulations, 2018 (CBLR, 2018):
- Whether a G-Card can be revoked by the Principal Commissioner in the absence of express statutory authority, and
- What is the maximum penalty that can lawfully be imposed on a G-Card holder under
Regulation 18of the CBLR, 2018.
The Tribunal set aside the revocation of the G-Card, directed its restoration, and reduced the penalty to the statutory ceiling applicable to G-Card holders, clarifying the contours of regulatory powers under the CBLR, 2018.
Background of the Case
The appeal arose from Order-in-Original No.01/TECH/CBLR/2024 dated 15.07.2024, passed by the Principal Commissioner. Under this order:
- The G-Card of Shri Ganga Singh, issued as G-Card No.01/2018 dated 06.08.2018, was revoked; and
- A penalty of Rs.50,000/- was imposed on him under
Regulation 18of the CBLR, 2018.
At the material time, Shri Ganga Singh was working as a G-Card holder with the Customs Broker firm M/s. Dutta Clearing Agent Pvt. Ltd.
The proceedings stemmed from certain export consignments alleged to be fictitious exports. The shipping bills in question were filed as “by himself” by the IEC holder, meaning that the exports were shown as self-filed and not through a Customs Broker.
Role of the Appellant
During the investigation, authorities recorded a self-inculpatory statement of Shri Ganga Singh on 10.10.2023. In that statement, he admitted that:
- He had assisted in uploading the documents related to the impugned exports on the e-Sanchit system; and
- This assistance facilitated the alleged fictitious exports.
The statement was neither retracted nor challenged as having been obtained under duress, coercion, or any improper influence.
On the strength of this admission and supporting records, the department concluded that the appellant had aided and abetted the fraudulent exports. Proceedings were then initiated under the CBLR, 2018, resulting in revocation of his G-Card and the imposition of penalty.
Invoked Provisions Under CBLR, 2018
The department sought to apply provisions of Regulation 10 of the CBLR, 2018, particularly:
Regulation 10(d)Regulation 10(e)Regulation 10(i)Regulation 10(n)Regulation 10(q)
These provisions enumerate the obligations of a Customs Broker, including due diligence, proper authorization, and compliance with customs law while undertaking customs clearance work.
Further, penalty was imposed under Regulation 18 of the CBLR, 2018, which deals with penal consequences for contravention of the Regulations by Customs Brokers, F-card holders, and G-card holders.
Tribunal’s Analysis on Liability of Customs Broker and G-Card Holder
No Involvement of Customs Broker in Filing Shipping Bills
The Tribunal examined the shipping documents placed on record and noted:
- The export documents, including the impugned shipping bills, indicated that they had been filed “by himself” by the IEC holder.
- M/s. Dutta Clearing Agent Pvt. Ltd., the Customs Broker firm with which the appellant was employed, did not appear anywhere on the export documents.
In other words, the export declarations were self-filed by the IEC holder and were not processed through any Customs Broker.
Key Observation: Since the Customs Broker firm was not reflected in the export documentation, CESTAT held that the firm could not be treated as having handled the exports in its capacity as a Customs Broker.