2017 (4) TMI 1160 - AT - Customs

Revocation of CHA licence - forfeiture of security deposit - Mis declaration - violation of Regulation 11 (d) of CBLR, 2013 - Customs Broker had taken delivery of the excess skid/ pallets - Held that - Regulation 11 (e) requires the Customs House Agent to exercise due diligence to ascertain the correctness of any information which he imparts to clients with reference to work relating to clearance of cargo / baggage. Merely because the importer have accepted their mistake of mis-declaration of brand and quantity and have shown their willingness to pay differential duty, fine and penalty, it cannot be concluded that Customs Broker did not exercise due diligence to ascertain correctness of the information - IEC number has been found to be correct as also the address of the importer. Further, all the importers have joined in the investigations and have given their statements. In such a scenario, it cannot be said that the Customs Broker has not adhered to KYC norms - revocation set aside - Appeal allowed - decided in favor of appellant-CHA.

Summary

Issues:
Revocation of Customs Broker License and forfeiture of security deposit based on alleged contravention of Customs Broker Licensing Regulation 2013.

Analysis:
The appeal was filed against the order revoking the appellant's Customs Broker License and forfeiting the security deposit on the grounds of contravention of Regulation 11(d), 11(e), and 11(n) of Customs Broker Licensing Regulation 2013. The appellant had filed Bill of Entry for importers declaring goods as mobile phones, but a discrepancy was found in the number of packages and pallets during examination at the airport cargo. The adjudicating authority relied on the inquiry officer's findings, indicating a pattern of misdeclaration by multiple importers with the appellant as the common Customs Broker. However, the appellant denied knowledge of the misdeclaration and stated they filed based on supplied documents without awareness of the actual quantity or modus operandi.

The adjudicating authority primarily focused on the misdeclaration in the Bill of Entry but lacked evidence implicating the appellant's knowledge or involvement. The Customs Broker's due diligence under Regulation 11(e) was questioned, but the willingness of importers to rectify errors did not conclusively prove lack of diligence. The judgment emphasized the need for evidence showing the Customs Broker's awareness of misdeclaration or collusion with importers, which was absent in this case. Additionally, for the alleged violation of Regulation 11(n), regarding verification of client details, the appellant's adherence to KYC norms was supported by correct IEC numbers and importer addresses, along with cooperation in investigations.

Ultimately, the Tribunal found no justifiable reason to revoke the appellant's license or forfeit the security deposit. The lack of evidence linking the Customs Broker to the misdeclaration, along with compliance with KYC norms and cooperation in investigations by importers, led to the setting aside of the impugned order and allowed the appeal with consequential relief. The judgment highlighted the importance of concrete evidence to establish wrongdoing by Customs Brokers and emphasized adherence to regulatory norms in customs clearance procedures.