2021 (10) TMI 1186 - AT - Customs

Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - import of used rubber tyres without a cut in bead wire - restricted goods - misdeclaration of goods - HELD THAT - The appellant (Customs Broker) had visited the Delhi address of the importer. Merely because he did not visit the factory at Jaipur, Rajasthan, it is held by the Commissioner that there is violation of Regulation 10(n) of CBLR, 2018. In fact, the address declared in the bills of entry and bill of lading is that of the Delhi address and the said address is a proper one and not fake one. On verification, the department has come to understand that there is no factory at Rajasthan address as declared in the IEC, Aadhar and GSTIN. When these are documents issued by the Governmental authorities, the Customs Broker cannot be burdened with responsibility of verifying the correctness of such address. There is no violation which is so grave for imposing such a harsh punishment of revocation of license. Taking note of the fact that the appellant has visited the Delhi address of the importer and such address being not fake, we are of the considered opinion that the imposition of penalty is not justified. The department has failed to establish that appellant has violated Regulation 10(n) of CBLR, 2018 - Appeal allowed.

Summary

Issues:
Violation of Regulation 10(n) of CBLR, 2018 by Customs Broker leading to revocation of license and penalty imposition.

Detailed Analysis:

1. Violation of Regulation 10(n) - Customs Broker's Obligations:
The appellant, a Customs Broker, filed bills of entry for an importer of used rubber tyres. The department alleged misdeclaration of goods and initiated proceedings against both the importer and the broker. The appellant was accused of violating Regulation 10(n) of CBLR, 2018, which mandates verifying the importer's details and functioning at the declared address. The original authority confirmed this violation, revoking the broker's license and imposing a penalty. The appellant contested, arguing that they verified the Delhi address but were not obligated to visit the importer's factory in Rajasthan. They relied on legal precedents to support their stance that physical verification beyond the declared address was not required for Customs Brokers.

2. Expert Opinion for Goods Verification:
The appellant contended that determining whether the used rubber tyres had cuts in bead wire required expert opinion, beyond the broker's scope. They emphasized that their role was to verify goods' nature from documents provided by the importer, not physically inspect the goods. The argument implied that the misdeclaration issue was beyond the broker's responsibility and expertise.

3. Inquiry Officer's Findings:
The Inquiry Officer's report noted that while the broker visited the importer's Delhi address, they did not inspect the factory in Jaipur, Rajasthan. The officer highlighted the discrepancy between the declared Rajasthan address and the actual situation, where another firm operated. The officer concluded that the broker failed to verify the importer's functioning at the declared address adequately, leading to the violation of Regulation 10(n).

4. Judgment and Decision:
The Tribunal analyzed the evidence and arguments presented. It found that the appellant's visit to the Delhi address sufficed for compliance with Regulation 10(n) as the importer's factory location was not within the broker's mandated verification scope. The Tribunal emphasized that documents like IEC, Aadhaar, and GSTIN, issued by authorities, were deemed reliable, absolving the broker from verifying beyond the declared address. Citing a similar case precedent, the Tribunal ruled in favor of the appellant, stating that the department failed to prove a grave violation justifying the license revocation and penalty imposition. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

In conclusion, the judgment clarified the Customs Broker's obligations under Regulation 10(n) and emphasized the scope of verification required, ultimately ruling in favor of the appellant due to the lack of substantial evidence supporting the alleged violation.