2024 (4) TMI 642 - AT - Customs

Revocation of Customs Broker Licence - forfeiture of security deposit - levy of penalty - mis-declaration of quantity of imported goods - violation of the provisions of Regulation 11(n) of CBLR, 2013 - HELD THAT - From the facts of the present case, it is evident that the manner in which Shri Bansal was dealing with the appellant in relation to the imports for all practical purposes, he was the actual importer and Shri Praveen Singh Patwal was merely a dummy IEC holder. He categorically stated that whenever the consignment arrived, the documents were sent to him by Shri Rajesh Bansal or else his field boy used to go to the office of Shri Rajesh Bansal at Tip Top Market, Karol Bagh to collect the documents. More important was that after customs clearance, the goods used to go to the premises of Shri Rajesh Bansal at Karol Bagh is a pertinent factor which could not have been ignored by the appellant. Similarly, the payments used to be made by Shri Rajesh Bansal or Sunil Badlani. The entire working was within the knowledge of the appellant and the fact that this modus-operandi was followed in the past clearances of around 60-70 consignments clearly reflects connivance on the part of the appellant. Also on same set of facts that Narendra Narula, Proprietor of GND Cargo Movers (CHA) was well aware of the fact that Shri Praveen Singh Patwal was the proprietor of M/s. Royal International and Shri Rajesh Bansal was actually importing the goods in the name of M/s Royal International, although Shri Bansal was not the proprietor of the said firm, show cause notice dated 29.11.2013 was issued under the Customs Act, 1962 and on adjudication, order-in-original dated 30.03.2018 was passed whereby penalty of Rs.10 lakhs was imposed on Shri Narendra Narula under Section 112 (a) of the Act. The findings given on the same facts in the collateral proceedings on adjudication are binding. Customs broker is expected to act with great sense of responsibility and take care of the interest of both the client and the revenue. Violations even without intent are sufficient to take action against the appellant. Proportionality of punishment - HELD THAT - The adjudicating authority had taken a balanced view that CB cannot escape his duty of KYC verification just by obtaining photo copies of two identity and interest proof documents and therefore having violated regulation 11 (n) rightly revoked the CB license and forfeited the security deposit amount but refrained from imposing separate penalty on the appellant. In M/S FALCON INDIA (CUSTOMS BROKER) VERSUS COMMISSIONER OF CUSTOMS (AIRPORT GENERAL) NEW DELHI 2022 (3) TMI 1268 - CESTAT NEW DELHI , the Tribunal was of the view that there is no reason to show any leniency once violation is noticed and it is not for the Tribunal to interfere with the punishment meted out by the disciplinary authority, i.e. the Commissioner, unless it shocks the conscience. Referring to the provisions of Regulation 11(n) and the judicial pronouncements, Mr. Rakesh Kumar, learned Authorised Representative submitted that Shri Narula (CB) in his statement recorded under Section 108 of the Act accepted that he has not verified the antecedents of the importer as the documents were handed over by Shri Badlani, an Associate of Shri Rajesh Bansal, who is not the IEC holder and he also admitted that the imports were made through a dummy IEC holder - there are no infirmity or perversity in the conclusion arrived at in imposing the punishment by the impugned order. The impugned order upheld - appeal dismissed.

Summary

Issues Involved:
1. Revocation of Customs Broker Licence
2. Forfeiture of Security Deposit
3. Violation of Customs Broker Licence Regulations, 2013
4. Verification of Importer Exporter Code (IEC) and Client's Address

Summary:

1. Revocation of Customs Broker Licence:
The appellant, a Customs Broker (CB), challenged the Order-in-Original dated 15.11.2018, which revoked their Customs Broker Licence and ordered the forfeiture of the security deposit of Rs.75,000, without imposing any penalty.

2. Forfeiture of Security Deposit:
The consignment imported by M/s. Royal International through the appellant was mis-declared in terms of quantity and branding, leading to under-valuation and evasion of customs duty. Statements were recorded u/s 108 of the Customs Act, 1962, revealing that the actual importer, Rajesh Bansal, used the IEC of Praveen Singh Patwal, who was merely a dummy IEC holder.

3. Violation of Customs Broker Licence Regulations, 2013:
The appellant was found guilty of violating Regulation 11(n) of the Customs Broker Licence Regulations, 2013 (CBLR), which requires verifying the correctness of the IEC number, identity of the client, and the client's functioning at the declared address. The Inquiry Officer's report confirmed the infringement, leading to the revocation of the licence and forfeiture of the security deposit.

4. Verification of Importer Exporter Code (IEC) and Client's Address:
The appellant argued that they adhered to KYC norms by obtaining two IDs and the IEC certificate and verifying them from the Income Tax Department and DGFT websites. However, the Tribunal found that the appellant failed to verify the correct address of the IEC holder, as the importer was not operating from the given address when the appellant undertook the work. The Tribunal also noted that the appellant cleared around 60 to 70 consignments without verifying the importer's functioning at the declared address, indicating connivance.

Conclusion:
The Tribunal upheld the impugned order, stating that the Customs Broker failed to verify the antecedents of the importer and allowed the use of a dummy IEC holder. The revocation of the licence and the forfeiture of the security deposit were justified, and the appeal was dismissed. The Tribunal emphasized the importance of the Customs Broker's role and the need for strict adherence to regulations to prevent misuse and ensure compliance with customs laws.