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2021 (8) TMI 241 - AT - CustomsRevocation of Customs Broker Licence - forfeiture of security deposit - levy of penalty - import of consignment of old and used parts by misdeclaring the same as Hard Disk Drive Seagate 500 GB - restricted goods or not - violation under 10(a), 10(n) and 10(o) of the CBLR, 2018. Actual owner of goods - allegation is that the appellant did not collect the KYC directly from the IEC holder but had collected it only from Shri Dhurv Bhavsar and that if appellant had collected it directly from the IEC holder, appellant would have come to know that M/s. U.V. Infotech is not the actual owner of the goods - HELD THAT - The old and used Hard Disk Drives after import are refurbished and sold in the market. Import of such such used goods fall under restricted category and requires license/permission for import. From the statement of Shri Dhurv Bhavsar, it is seen that he had not disclosed to the appellant that the actual owner of the goods is Shri Tanzeem Tanvir Shaikh. From the statement of Shri R. Kannan Pillai, it is seen that they were not aware that goods were used goods and filed the documents based on the declaration made under invoices - M/s. U.V. Infotech is a Partnership Firm, which is run by brothers cousins , namely, Shri Mohammad Anas and Shri Mohammad Shahnawaj. Shri Tanzeem Tanvir Shaikh, who is the actual owner of the goods, is their cousin. It cannot be said that the IEC was used by a total stranger or a fake importer. Violation of Regulations 10(a) and 10(n) of CBLR, 2018 - HELD THAT - In the present case, appellant has done verification of the previous imports of the importer and also obtained necessary KYC documents. Then the allegation that they did not exercise due diligence for complying with Regulations 10(a) and 10(n) cannot sustain. Violation of Regulations 10(o) of CBLR, 2018 - HELD THAT - From the documents, it is seen that Nerul address is the address of Power of Attorney holder of the appellant Shri R. Kannan Pillai. The Ghatkopar address belongs to Shri Dinesh Pratap Rai Mehta, Manager of the appellant-Company. The Nerul address is not false or fake address - there is no violation of Regulations 10(o) of CBLR, 2018. After inquiry report, the adjudicating authority has held that there is no requirement to revoke/suspend the findings or to order for forfeiture of security deposit - penalty also cannot sustain unless the department establishes the violations committed by the appellant. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Alleged violation of Regulation 10(a) of CBLR, 2018. 2. Alleged violation of Regulation 10(n) of CBLR, 2018. 3. Alleged violation of Regulation 10(o) of CBLR, 2018. 4. Misdeclaration of imported goods. 5. Misuse of Importer Exporter Code (IEC). Detailed Analysis: 1. Alleged Violation of Regulation 10(a) of CBLR, 2018: The department alleged that the appellant did not obtain authorization from the importer before filing the documents and bill of entry. The appellant countered this by presenting the statement of Shri R. Kannan Pillai, the Power of Attorney of the Customs Broker, who confirmed that the KYC of the importer was obtained. A letter dated 01.03.2019 from M/s. UV Infotech authorizing the appellant as their Customs broker was also submitted. The Commissioner held that the authorization was insufficient as M/s. U.V. Infotech was only the IEC holder and not the actual importer. The appellant argued that the bill of entry is always filed in the name of the IEC holder and that the authorization from the IEC holder was correctly obtained. The Tribunal found that the appellant had correctly obtained the authorization and had no knowledge that the actual owner of the goods was not M/s. U.V. Infotech. 2. Alleged Violation of Regulation 10(n) of CBLR, 2018: The department claimed that the appellant failed to verify the correctness of the IEC number and the identity of the client. The appellant argued that they had collected all necessary KYC documents from Shri Dhurv Bhavsar, who represented himself as the employee of the importer. The appellant had verified previous imports and found that the consignments were cleared. The Tribunal noted that the appellant had acted bonafidely and in their normal course of business, collecting documents such as Aadhar Card, GST Registration Certificate, bank verification letter, PAN cards, IEC code, Udyog Aadhar Registration Certificate, and Electricity Bill of the importer. The Tribunal concluded that the appellant had complied with the obligation of collecting and verifying the necessary documents as mandated by Circular No.9/2010-Cus., dated 08.04.2010. 3. Alleged Violation of Regulation 10(o) of CBLR, 2018: The department alleged that the appellant had given their Nerul address while extending their license to Mumbai and did not disclose their Ghatkopar address. The appellant clarified that the Nerul address was that of their Power of Attorney holder, Shri R. Kannan Pillai, and not a fictitious or fake address. The Tribunal found that no benefit was gained by the appellant by not disclosing the Ghatkopar address and no prejudice was caused to the Revenue. Therefore, there was no violation of Regulation 10(o) of CBLR, 2018. 4. Misdeclaration of Imported Goods: The goods were declared as Hard Disk Drives, but upon examination, it was found that these were old and used Hard Disk Drives, which fall under the restricted category and require a license for import. The appellant argued that they were not aware that the goods were used and filed the documents based on the declaration made under invoices. The Tribunal noted that the appellant had verified previous imports and collected necessary documents, thus acting with due diligence. 5. Misuse of Importer Exporter Code (IEC): The department alleged that M/s. U.V. Infotech, the IEC holder, was not the actual owner of the goods and had lent the IEC to another person, Shri Tanzeem Tanvir Shaikh. The appellant argued that M/s. U.V. Infotech is a family business run by brothers, and the actual owner of the goods, Shri Tanzeem Tanvir Shaikh, is their cousin. The Tribunal concluded that the IEC was not used by a total stranger or a fake importer and that the appellant had verified the previous imports and obtained necessary KYC documents. Conclusion: The Tribunal found that the department had not been able to establish the allegations raised in the show-cause notice. The impugned order was set aside, and the appeal was allowed with consequential reliefs, if any. The penalty imposed on the appellant was also set aside as the department could not establish the violations committed by the appellant.
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