2024 (2) TMI 573 - AT - Customs

Revocation of customs Broker License - forfeiture of security deposit - levy of penalty - smuggling of red sanders logs which are prohibited items for export - violation of Regulation 10 (e) and 10 (n) of CBLR 2018 - authorisation was not obtained from the exporter - HELD THAT - Accepting the fact that the shipping bill was filed based on the KYC documents, invoices and packing list made by Mr. Satishkumar, Commissioner alleges that the appellant should have received authorisation and all other documents directly from the exporters which resulted in fraudulent export. The act of negligence on the part of the appellant was only to the extent of not verifying the authenticity of the documents and to check whether the orders have been placed by the exporters. The appellant has placed documents to show that the KYC documents were authorised by the exporter and also placed the mahazar which shows that the department had seized certain documents which included original attested copy of KYC documents of the exporter including certificate of IEC, GST registration certificate, PAN card and Aadhar Card. Since based on these documents, they had verified online and filed the shipping bill in good faith; they cannot be penalised for the illegal attempt to export prohibited goods. The main show-cause noticed dated 24.1.2022 which deals with the main culprits should have been adjudicated along with the present notice. In view of the above, there are no reason for revoking the license of the appellant and for forfeiture of the security deposit. Therefore, the revocation of license and forfeiture of the security deposit is set aside. Penalty - HELD THAT - The fact remains that the goods that were declared as Industrial Ductile Pipes were found to be red sander logs and the shipping bills were filed by the appellant. For having violated the Regulations of CBLR in not verifying the genuineness of Mr. Satishkumar who claims to the authorised representative of the exporter will warrant penalty under CBLR 2018 - the penalty of Rs.50,000/- is upheld. Appeal allowed in part.

Summary

Issues:
The issues involved in the judgment are violation of Customs Brokers Licensing Regulations (CBLR) 2018, revocation of license, forfeiture of security deposit, penalty imposition, and verification of genuineness of exporter.

Violation of CBLR 2018 and Revocation of License:
The appellant, a Customs Broker, was issued a show-cause notice for violating Regulations 10(e) and 10(n) of CBLR 2018 due to the export of prohibited red sanders logs instead of declared 'Ductile Industrial Pipes'. The Commissioner revoked the license, ordered forfeiture of security deposit, and imposed a penalty of Rs. 50,000. The appellant contended that the show-cause notice was time-barred and relied on a previous case for support. The Tribunal observed discrepancies in the issuance of multiple show-cause notices and found that the appellant had verified the exporter's genuineness online before filing shipping bills. The Tribunal set aside the revocation of the license and forfeiture of the security deposit.

Verification of Genuineness and Penalty Imposition:
The Commissioner acknowledged that Customs Brokers are not obligated to physically verify the address of importers/exporters but are required to verify genuineness. The appellant's negligence in not obtaining direct authorization from the exporter led to fraudulent export of prohibited goods. However, the Tribunal noted that the appellant had verified KYC documents online and filed shipping bills in good faith. The Tribunal upheld the penalty of Rs. 50,000 for not verifying the genuineness of the exporter. The appeal was allowed partly, with the revocation of license and forfeiture of security deposit set aside.

Separate Judgement (if applicable):
No separate judgment was delivered by the judges in this case.

This summary outlines the key issues addressed in the judgment, including the violation of Customs Brokers Licensing Regulations, revocation of license, forfeiture of security deposit, penalty imposition, and the verification of the exporter's genuineness. The Tribunal considered the appellant's online verification process, the obligations of Customs Brokers, and the discrepancies in show-cause notices while making its decision to partially allow the appeal and uphold the penalty imposition.