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2024 (2) TMI 514 - AT - CustomsRevocation of Customs Brokers licence of the appellant - forfeiture of security deposit - Levy of penalty - violation of Regulations 10(a), 10(d), 10(e), 10(m) and 10 (n) of CBLR. Violation of Regulation 10(a) - appellant had not obtained any authorization for the consignments from the importer M/s. Angel Corporation at all - HELD THAT - In this case, investigations revealed that M/s. Angel corporation had nothing to do with the imports and Shri Tarkeshwar Dubey was the master mind of the operation which he undertook for some Somalians. The Airway Bill issued by the airline showed the goods as Dry Khat but Shri Dubey changed the description of the goods in the Airway Bill and sent them to the appellant who filed the Bills of Entry with wrong description of the goods. There is nothing on record to show that the appellant was involved in the smuggling of Dry Khat or profited from it. However, the question in this appeal is simply whether the appellant had obtained the authorization from the importer firm, as was required as per Regulation 10(a) or not - Had the appellant approached M/s. Angel Corporation, the importer and obtained the documents from them, or at least, checked with M/s. Angel Corporation even through a phone call or email, it would have known in no time that the consignment was not imported at all by M/s. Angel Corporation and the entire racket of smuggling of the psychotropic substance would have come to light - there are no hesitation in holding that the appellant had failed to obtain authorization from M/s. Angel Corporation, the importer and thereby violated its obligation under Regulation 10(a). Contravention of Regulation 10(d) - failure to advise Angel Corporation to comply with the provisions of the Act and allied Acts, but it has not even contacted the client - HELD THAT - Regulation 10(d) requires that the Customs Broker to advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be. Learned counsel for the appellant denies that there was any violation of Regulation 10(d) at all - In this case, the client of the appellant on paper is M/s. Angel Corporation. Not only did the appellant not advise Angel Corporation to comply with the provisions of the Act and allied Acts, but it has not even contacted the client. In fact, it filed the Bill of Entry in the name of M/s. Angel Corporation without even contacting them and thus the import of the psychotropic substance dry khat took place - there are no hesitation in holding that the appellant had violated Regulation 10(d). Violation of Regulation 10(e) - filing of Bills of Entry on the basis of the wrong information provided by a person - HELD THAT - This Regulation requires the Customs Broker to exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage - The entire facts of the case are not that the appellant had provided wrong or incorrect information to its clients but that it had filed Bills of Entry on the basis of the wrong information provided by a person who was not the importer but some other person - it is not found from the facts of this case that the appellant had provided any wrong or incorrect information. Therefore, the appellant did not violate Regulation 10(e). Violation of Regulation 10(m) - processing done carelessly without taking due care - HELD THAT - This Regulation requires the Custom Broker to discharge his duties with utmost speed and efficiency and without any delay. From the facts of this case, it does not appear that the appellant had delayed any processing. In fact, the problem is that it had processed them carelessly without taking due care - it is not found that the appellant had violated regulation 10(m). Violation of Regulation 10(n) - requirement to verify the identity of the importer and whether it was operating at the declared address - HELD THAT - The appellant would have been correct if it had obtained the documents from the importer M/s. Angel Corporation. Obtaining the documents from some other person and filing benami Bills of Entry to clear mis-declared cargo, which in this case, happens to be a psychotropic substance banned under NDPS Act cannot, in our view, constitute fulfilment of Regulation 10(n) - the Commissioner was correct in holding in the impugned order that the appellant had violated Regulations 10(a), 10(d) and 10(n). A Customs Broker is expected to behave and operate responsibly and he cannot simply file benami Bills of Entry which, in this case, resulted in import of a psychotropic substance. Filing of Benami Bills of Entry, if condoned, can have severe consequences. Customs procedures are based on trust and selective controls based on risk assessment. If Customs Brokers start filing Benami Bills of Entry, in the name of any importer, it can open the floodgates for free import of any contraband including, drugs, arms and explosives. Since examination is on selective basis, chances are that the contraband may not be detected (especially if mis-declared as a low risk import good) - filing Benami Bills of Entry is a serious violation and calls for toughest action. There are no reason to interfere with the impugned order and uphold it. The appeal is, accordingly, rejected.
Issues Involved:
1. Violation of Regulation 10(a) of the Customs Broker Licensing Regulations, 2018. 2. Violation of Regulation 10(d) of the Customs Broker Licensing Regulations, 2018. 3. Violation of Regulation 10(e) of the Customs Broker Licensing Regulations, 2018. 4. Violation of Regulation 10(m) of the Customs Broker Licensing Regulations, 2018. 5. Violation of Regulation 10(n) of the Customs Broker Licensing Regulations, 2018. 6. Appropriateness of the revocation of the Customs Brokers license, forfeiture of security deposit, and imposition of penalty. Summary of Judgment: Regulation 10(a): The Customs Broker must obtain authorization from the importer. The Commissioner found that the appellant did not obtain any authorization from M/s. Angel Corporation and relied on documents provided by a third party, Shri Tarkeshwar Dubey. The Tribunal upheld this finding, stating that the appellant failed to verify the authenticity of the importer, thus violating Regulation 10(a). Regulation 10(d): This regulation requires advising the client to comply with the law and reporting non-compliance. The Tribunal found that the appellant did not contact M/s. Angel Corporation, thus failing to advise compliance with the law. The appellant's actions facilitated the import of 'dry khat,' a psychotropic substance, leading to a violation of Regulation 10(d). Regulation 10(e): This regulation mandates due diligence in ascertaining the correctness of information provided to clients. The Tribunal found no evidence that the appellant provided incorrect information to clients but rather filed Bills of Entry based on incorrect information from a third party. Therefore, the appellant did not violate Regulation 10(e). Regulation 10(m): This regulation requires the Customs Broker to discharge duties efficiently and without delay. The Tribunal found no delay in the appellant's actions but noted carelessness. Thus, there was no violation of Regulation 10(m). Regulation 10(n): This regulation requires verifying the correctness of the Importer Exporter Code (IEC), GSTIN, and the identity and functioning of the client. The Tribunal found that the appellant did not verify these details with M/s. Angel Corporation but relied on documents from a third party. This constituted a violation of Regulation 10(n). Revocation of License, Forfeiture of Security Deposit, and Imposition of Penalty: The Tribunal upheld the Commissioner's decision to revoke the appellant's Customs Brokers license, forfeit the security deposit, and impose a penalty of Rs. 50,000/-. The Tribunal emphasized that filing benami Bills of Entry, especially for importing a psychotropic substance, is a severe violation warranting the toughest action. The appeal was rejected, and the impugned order was upheld. Conclusion: The Tribunal found the appellant in violation of Regulations 10(a), 10(d), and 10(n) of the Customs Broker Licensing Regulations, 2018. The revocation of the license, forfeiture of the security deposit, and imposition of a penalty were deemed appropriate and proportionate to the violations. The appeal was dismissed.
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