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2019 (4) TMI 1189 - AT - CustomsRevocation of CHA License - forfeiture of security deposit - violation of Regulations 11(a), 11(b), 11(d), 11(n) 11(j) of the Custom Broker Licensing Regulations, 2013 - HELD THAT - The required KYC were produced by the Appellant to the Department at a later stage to the Licence Issuing Authority and not to the investigating Agency. This suggests that the necessary KYC documents were actually not present with the appellant when the investigating agency visited and asked them to produce the KYC documents of the importer firm. This very facts prove that the appellant had indeed not negotiated the clearance of the impugned consignments and have allowed his licence to be misused by other persons and have thus violated the provisions of Regulation 11 (a) of CBLR, 2013. The charge of failure to advise the client to comply with Regulation 11(d) or the charge of concealment of any document etc. as per regulation 11(j) does not hold good as these charges are not substantiated by any positive evidence with respect to knowledge of the CB or circumstantial evidence like extra pecuniary gain etc. There is nothing on record to also show that appellant was too prevented from being present personally or through his authorized G Card or H Card representative when called by the investigating agency for participating in the examination of impugned import consignments, the arguments adduced by them in their support are without valid evidences and thus the appellant has violated the provisions of Regulation 11(b). The appellant has not complied with the provisions to regulations CBLR 2013 - appeal dismissed - decided against Revenue.
Issues Involved:
1. Violation of Regulation 11(a) of the Custom Broker Licensing Regulations, 2013. 2. Violation of Regulation 11(b) of the Custom Broker Licensing Regulations, 2013. 3. Violation of Regulation 11(d) of the Custom Broker Licensing Regulations, 2013. 4. Violation of Regulation 11(j) of the Custom Broker Licensing Regulations, 2013. 5. Violation of Regulation 11(n) of the Custom Broker Licensing Regulations, 2013. Detailed Analysis: 1. Violation of Regulation 11(a): The appellant was found in violation of Regulation 11(a), which mandates a Customs Broker to obtain authorization from the companies, firms, or individuals they represent. The appellant failed to produce such authorizations during the examination of the consignments. The adjudicating authority observed that the appellant did not engage directly with the importers and allowed his license to be misused by others. Despite the appellant's argument that the authorizations and KYC documents were not demanded by the Directorate of Revenue Intelligence (DRI) during the investigation, the tribunal concluded that the necessary documents were not present with the appellant when required, thus violating Regulation 11(a). 2. Violation of Regulation 11(b): Regulation 11(b) requires a Customs Broker to transact business either personally or through an approved employee. The appellant allowed Shri Surender Kumar, who was neither an employee nor a G-Card or H-Card holder, to represent him. The tribunal found that the appellant failed to provide a plausible explanation for authorizing an unauthorized person to conduct business on his behalf. This unauthorized representation was a clear violation of Regulation 11(b). 3. Violation of Regulation 11(d): Regulation 11(d) obligates a Customs Broker to advise their client to comply with the provisions of the Customs Act and report any non-compliance to the authorities. The tribunal noted that there was no substantial evidence to prove that the appellant or his authorized representative had prior knowledge of the mis-declared contents of the consignments. The appellant argued that the goods were declared based on the import documents provided by the importers and that there was no way to ascertain the correctness of the contents without examination. Consequently, the charge of failing to advise the client to comply with Regulation 11(d) was not upheld. 4. Violation of Regulation 11(j): Regulation 11(j) prohibits a Customs Broker from refusing access to, concealing, removing, or destroying any records related to their transactions. The tribunal found no evidence to support the charge that the appellant concealed or destroyed any documents. The appellant argued that no KYC documents were demanded by the DRI during the investigation and that all packets were accounted for during the examination. Therefore, the charge of violating Regulation 11(j) was not substantiated. 5. Violation of Regulation 11(n): Regulation 11(n) requires a Customs Broker to verify the antecedents, correctness of the Importer Exporter Code (IEC) number, and the identity and functioning of their client. The tribunal found that the appellant failed to present the KYC documents to the investigating agency in a timely manner. Although the appellant argued that they verified the documents from the importers and other sources before filing the bills of entry, the tribunal concluded that the appellant did not comply with the requirements of Regulation 11(n) as the necessary verification documents were not produced promptly. Conclusion: The tribunal upheld the adjudicating authority's decision to revoke the appellant's Customs Broker License and forfeit the security deposit of ?75,000. The appellant was found in violation of Regulations 11(a), 11(b), and 11(n) of the Custom Broker Licensing Regulations, 2013. The charges under Regulations 11(d) and 11(j) were not substantiated by evidence. Consequently, the appeal was dismissed, and the order-in-original dated 15/11/2017 was affirmed.
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