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2024 (3) TMI 569 - AT - CustomsRevocation of Customs Broker License - forfeiture of security deposit - levy of penalty - responsibility of the appellant with regard to the acts of his employee (vicarious liability) - allegation is that the appellant i.e. the CHA firm had not verified the facts/KYC/Goods of the exporter before filing the Shipping Bills - violation of regulations 10(d), 10(e), 10(m) and 10(n) of Customs Broker Licensing Regulations, 2018. HELD THAT - The appellant is responsible for all the acts of omission of his employees. He is responsible for the acts of his employee also, who has misrepresented before the Customs Authorities. Therefore, the appellant cannot absolve himself of all the responsibilities under the CBLR, 2018. The CB is expected to exercise due diligence to satisfy about the bonafide of the importer/exporter, as the case may be, and the documents submitted by him. In the instant case, the appellant CB has claimed that Shri Ajay Sharma, Senior Manager had been appointed to conduct all business in Delhi. This fact has been confirmed by Shri Vikas Joshi, senior associate of the appellant in his statement dated 10.12.2020 as well by Shri Ashwini Handa, Director of the appellant in his statement dated 07.09.2021. It has been categorically stated that Shri Ajay Sharma was the sole incharge of NITCO Air Express, Delhi office and responsible for marketing, payment, recovery, selecting clients after due diligence, managing filing of the documents such as, Shipping Bills etc. It has also been explicitly made clear by Shri Ajay Sharma that they did not take the KYC documents of M/s Hiba Enterprises. This is clear violation of the Regulation 10(e) and 10(n) of CBLR, 2018. In the impugned order, the Adjudicating Authority has relied on the Inquiry Report wherein it has been clearly stated that entries in the books of accounts of the appellant reflect bogus details, which could not have escaped the management s scrutiny. No evidence has been brought on record before us to enable us to differ from these findings. Mere assertion that the employee had carried out these activities in his personal capacity does not get washed, in the face of such statements/evidence. Regulation 13(12) categorically makes the Appellant responsible for any act or omission of employee, and the mere act of removing its employee after an incident does not extinguish this vicarious liability. It is noted that under the doctrine of Respondent Superior, employers are liable for their employees' tortuous acts committed within the scope of the employment relationship. In the instant case, there is statement of Shri Ajay Sharma that the MD Shri Vijay Kochhar had directed him to obey the directions of Ms. Sayana Gupta and Shri Gaurav Gupta. The acts of misusing the IEC is very much a part of the job profile of Shri Sharma and falls within the four corners of employment relationship - As regards the violations of Regulation 10 of the CBLR, 2018, it is observed that the findings in the impugned order are detailed and no evidence has been brought to negate the impugned order. There are no reason to interfere with the impugned order - appeal dismissed.
Issues Involved:
1. Revocation of Customs Broker License. 2. Forfeiture of Security Deposit. 3. Imposition of Penalty. 4. Violation of Customs Broker Licensing Regulations (CBLR), 2018. Summary: 1. Revocation of Customs Broker License: The appeal was against the order dated 27.07.2022, where the Customs Broker's (CB) license was revoked for violations of regulations 10(d), 10(e), 10(m), and 10(n) of CBLR, 2018. The Directorate of Revenue Intelligence found mis-declaration of cargo by the exporter using a cancelled GSTIN registration. The CB was held responsible for failing to verify the exporter's credentials and the authenticity of the documents. 2. Forfeiture of Security Deposit: The security deposit was forfeited due to the CB's failure to exercise due diligence and verify the correctness of the Importer Exporter Code (IEC) and GSTIN, as mandated by CBLR, 2018. The CB's employee, Ajay Sharma, was found to have misused the IEC without the CB's knowledge, leading to the forfeiture. 3. Imposition of Penalty: A penalty of Rs. 50,000/- was imposed on the CB for the violations. The CB argued that the employee acted independently and without the CB's knowledge. However, the Tribunal held that the CB is responsible for the acts of its employees under Regulation 13(12) of CBLR, 2018, which mandates supervision over employees' conduct. 4. Violation of Customs Broker Licensing Regulations (CBLR), 2018: The Tribunal found that the CB violated regulations 10(d), 10(e), 10(m), and 10(n) of CBLR, 2018. These regulations require the CB to advise clients to comply with the law, exercise due diligence, discharge duties efficiently, and verify the correctness of client information. The CB failed to meet these obligations, leading to the revocation of the license and other penalties. Conclusion: The Tribunal upheld the order-in-original, confirming the revocation of the CB's license, forfeiture of the security deposit, and the imposition of the penalty. The appeal was dismissed, reinforcing the CB's responsibility for the actions of its employees and the importance of adhering to the regulations under CBLR, 2018. Pronounced in the open Court on 12/03/2024.
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