2018 (5) TMI 731 - AT - Customs

Revocation of CHA license - forfeiture of security deposit - it was alleged that the appellant misdeclared goods in terms of description as well as undervaluation - Held that - During the interrogation of Shri Rajendra, alias Raju, it stands admitted in the statements that he had carried out forgery of the import invoices using his computer and using such forged invoices, misdeclared the import goods in the bills of entry filed in terms of both valuation as well as description. For monetary benefits, Shri Rajendra has acted to secure clearance of the goods without scrutiny by customs by resorting to preparation forged copies of the invoices, thereby declaring lesser value and changing the description of the goods to Paper-Rolls . This clearly establish the contravention of various Regulations under CBLR, 2013. It was imperative for the Customs Broker to keep control and supervision over the conduct of their employees. The appellant cannot escape the vicarious liability for the action of their employees. Impugned order upheld - appeal dismissed - decided against appellant.

Summary

Issues:
- Misdeclaration and undervaluation of imported goods
- Role of customs broker in facilitating misdeclaration
- Liability of customs broker for employee's actions
- Contravention of Customs Broking Licensing Regulations, 2013

Analysis:
The case involves an appeal against the revocation of a customs broker's license due to misdeclaration and undervaluation of imported goods. The appellant, a licensed customs broker, filed bills of entry for an importer who was found to have misdeclared goods and undervalued them. The investigation revealed that the appellant played a significant role in engineering the misdeclaration and undervaluation. The adjudicating authority upheld the contravention of various Regulations of the Customs Broking Licensing Regulations, 2013 and revoked the appellant's license, along with ordering forfeiture of the security deposit and blacklisting an employee involved.

The appellant argued that they should not be held responsible for the misdeclaration as their employee filed the bills of entry based on the import documents provided, without the appellant's involvement. However, it was established that the employee had forged invoices to misdeclare the goods, leading to undervaluation and evasion of statutory obligations. The appellant's lack of proper guidance to the importer and failure to supervise the employee's actions led to the contravention of regulations.

The Tribunal found that the appellant, as a customs broker, had a duty to supervise and control its employees to ensure compliance with customs regulations. The investigation confirmed the contravention of CBLR, 2013 requirements, establishing the appellant's liability for penal consequences. The Tribunal upheld the impugned order, stating that the appellant could not escape vicarious liability for the employee's actions. Consequently, the appeal was rejected, affirming the revocation of the appellant's license.

In conclusion, the judgment highlights the importance of customs brokers adhering to regulations and exercising proper supervision over their employees to prevent misdeclaration and undervaluation of imported goods. The case serves as a reminder that customs brokers are expected to act in accordance with the law and face penal consequences for any contraventions, even if committed by their employees.