9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 486 - AT - CustomsRevocation of Customs Broker License - forfeiture of security deposit - levy of penalty - Mis-declaration of description of goods and its value in import of Button Tips - undervaluation - Violation of Regulations 10(a), 10(d), 10(f) and 10(n) of CBLR, 2018 - Timelines to be followed in the entire process of adjudication of the suspension/revocation of CB license under CBLR, 2018 by Customs authorities. Violation of Regulation 10(d) of CBLR - HELD THAT - The appellants CB has declared the value of imported goods as given in the commercial invoices, which is the transaction value. Further, submitting the declaration form (GATT valuation declaration) in terms of Rule 11, is primarily the responsibility of the importer and in case of proper authorization being given by them, then by the agent of the importer - In the present case, it is not in dispute that there was any such mis-declaration in the GATT value declaration form or in the value particulars declared in the bill of entry as compared to the commercial invoice. Further, any exercise in re-determination of value other than the transaction value has to be adopted step-by-step on the basis Rule 3 ibid, and after rejection of transaction value as per Rule 12 ibid - there are no such evidence or fact indicating that there was a mis-declaration of value and the value was re-determined as per the above legal provisions - the conclusion arrived by the Commissioner of Customs (General) on this valuation issue in the impugned order is not supported by any evidence or factual detail, and thus the impugned order stating that the appellants have violated Regulation 10(d) ibid is also not sustainable. Violation of provision of Regulation 10(f) ibid - HELD THAT - As the appellants had never met the importer/IEC holder, which indicated that they withheld the information contained orders, instructions or public notices relating to clearance of cargo from the importer of the goods, which led to the duty evasion in the said case . Even for an argument sake, if it is accepted that the appellants had not met the importer/IEC holder in person, it is not clear how such an act would automatically would tantamount to non-supply of information relating to Customs law procedures to the importer for compliance purpose - In the absence of any specific evidential document or factual record to state that the information contained in any specific orders, instructions or public notices issued by Customs have been withheld by the appellants, it is not feasible to sustain such a charge on the appellants and thus the conclusion arrived at by the Commissioner of Customs (General) without any basis of documents or facts, in the impugned order with respect to Regulation 10(f) ibid, is not sustainable. Violation of Regulation 10(n) of CBLR - HELD THAT - Circular No. 9/2010-Customs dated 08.04.2010 clearly explains the provision of CBLR/CHA Regulations which require the Customs Brokers to verify the antecedents, correctness of Import Export Court (IEC) Number, identity of his client and the functioning of his client in the declared address by using reliable, independent, authentic documents, data and information. The said guidelines provide for the list of documents that is required to be verified and that are to be obtained from the client importer/exporter. it is also provided that any two documents of among such specified documents is sufficient for fulfilling the obligation prescribed under Regulation 10(n) of CBLR, 2018 - in the present case, the appellants CB had obtained the KYC documents and submitted the same to the Customs Department. Thus, there are no legal basis for upholding of the alleged violation of Regulation 10(n) ibid by the appellants in the impugned order. The Hon ble High Court of Delhi has held in the case of KUNAL TRAVELS (CARGO) VERSUS COMMISSIONER OF CUSTOMS (IMPORT GENERAL) NEW CUSTOMS HOUSE, IGI AIRPORT, NEW DELHI 2017 (3) TMI 1494 - DELHI HIGH COURT , the appellants CB is not an officer of Customs who would have an expertise to identify over valuation or under valuation of goods. Timelines to be followed in the entire process of adjudication of the suspension/revocation of CB license under CBLR, 2018 by Customs authorities - HELD THAT - In the instant case, the alleged offence in importation of goods took place in respect of Bills of Entry dated 22.08.2016 and 27.08.2016 which was reported by a SCN/offence report dated 27.09.2017 and on that basis the jurisdictional Commissioner had suspended CB license of the appellants under Regulation 16(1) of ibid, with immediate effect vide Order No. 21/2018-19 dated 30.05.2018. Simultaneously, SCN No.10/2018-19 dated 30.05.2018 was issued to the appellants for initiating inquiry proceedings against violations of CBLR, 2018 due to failure of the appellants to comply with Regulations 10(a), 10(d), 10(f) and 10(n) ibid. Upon completion of the inquiry, vide Inquiry report submitted on 14.11.2019, and having not agreed to the said report, the Commissioner of Customs (General), Mumbai, being the licensing authority under Regulations 14 of CBLR, 2018 had passed the impugned order dated 28.08.2020. The above timelines indicate that the suspension was continued during the inquiry proceedings for about 27 months. Normally, immediate suspension action prior to conduct of regular inquiry is taken considering the serious violations of CBLR, 2018 by the action of the Customs broker - the Customs broker has already suffered a lot, as they were out of his normal business for almost 5 years and 5 months as of now. It is also noted that the livelihood of Customs broker and the employees is dependent upon the functioning of Customs broker s business. The punishment suffered by being out of Customs broker business for about five years is more than sufficient to mitigate the case of violations or contraventions of CBLR, 2018. There is definitely delay in adjudication and that for the import transaction that occurred in August, 2016, the order of revocation of appellant s CB license has been passed on 28.08.2020. Revenue is unable to explain why there was such a long delay in taking action against appellants, when the information about under valuation of import through Customs APU, R I Division was received vide SCN dated 27.09.2017 - The prescribed time under CBLR for timely completion of inquiry proceedings right from the beginning i.e., issue of SCN within a period of 90 days from the date of receipt of offence report, submission of inquiry report within 90 days of issue of SCN, passing of order by the Commissioner of Customs within 90 days of receipt of inquiry report was neither followed nor given credence to. There are no merits in the impugned order passed by the learned Commissioner of Customs (General), Mumbai in revoking the license of the appellants; for forfeiture of security deposit; and for imposition of penalty, inasmuch as there is no violation of regulations 10(d), 10(f) and 10(n) ibid, and the findings in the impugned order is contrary to the facts on record - However, in view of the failure of the appellants to have acted in a proactive manner in fulfillment of the obligation under sub-regulation 10(a) ibid, particularly when they have received the documents from importer through intermediary logistics operator, we find that it is justifiable to impose a penalty of Rs.10,000/- against the appellants, which would be reasonable and would be in line with the judgement of the Hon ble Supreme Court in the case of K.M.Ganatra 2016 (2) TMI 478 - SUPREME COURT , in bringing out the importance of crucial role played by a Customs Broker. Appeal allowed.
Issues Involved:
1. Whether the appellant Customs Broker fulfilled all obligations under CBLR, 2018. 2. Whether the delay in inquiry proceedings invalidates the revocation of the Customs Broker's license. 3. Whether the Customs Broker was justified in obtaining documents through an intermediary. 4. Whether the Customs Broker was liable for mis-declaration and undervaluation of imported goods. Summary: 1. Fulfillment of Obligations under CBLR, 2018: The Tribunal examined whether the appellant Customs Broker violated Regulations 10(a), 10(d), 10(f), and 10(n) of CBLR, 2018. It was found that the Customs Broker declared the value and description of imported goods based on commercial invoices provided by the importer, and there was no evidence of mis-declaration. The Tribunal concluded that the Customs Broker did not violate Regulations 10(d), 10(f), and 10(n), as there was no factual basis or evidence supporting the allegations. However, the Customs Broker failed to act proactively in verifying the authenticity of documents received through an intermediary, thereby violating Regulation 10(a). A penalty of Rs.10,000/- was deemed reasonable for this failure. 2. Delay in Inquiry Proceedings: The Tribunal noted that the entire process of suspension and inquiry took about 27 months, which was unduly delayed. The Tribunal emphasized that the Customs Broker had already suffered significant business loss due to the prolonged suspension. The delay was not justified by the reasons provided by the Revenue, which only mentioned 'unavoidable administrative reasons' without detailed explanation. The Tribunal referred to the Hon'ble High Court of Bombay's guidelines in the case of Principal Commissioner of Customs (General), Mumbai Vs. Unison Clearing P Ltd., emphasizing the need for reasonable timelines in inquiry proceedings. 3. Obtaining Documents through Intermediary: The Tribunal accepted that obtaining documents through a logistics operator acting as an intermediary is an acceptable practice in international trade, as held in previous Tribunal decisions. The Customs Broker had obtained the necessary KYC documents and authorization from the importer. The Tribunal found no violation in this regard, referencing the case of K.S.Sawant & Co. and the DGFT's Policy Circular clarifying the use of IEC by intermediaries. 4. Liability for Mis-declaration and Undervaluation: The Tribunal found that the Customs Broker declared the value and description of the imported goods as per the commercial invoices provided by the importer. The mis-declaration and undervaluation were discovered by the Customs APU, R&I Division, only after detailed examination and testing of subsequent imports. The Tribunal concluded that the Customs Broker could not be held liable for mis-declaration or undervaluation as they acted based on the documents provided by the importer and were not aware of any discrepancies. Conclusion: The Tribunal set aside the revocation of the Customs Broker's license, forfeiture of the security deposit, and imposition of penalty, except for a penalty of Rs.10,000/- for the failure to act proactively under Regulation 10(a). The appeal was allowed in favor of the appellants, modifying the impugned order accordingly.
|
