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2024 (4) TMI 875 - AT - CustomsRevocation of Customs Broker license - forfeiture of security deposit - levy of penalty - gold smuggled in a consignment of medical equipment, Air Nebulizer - violation of Regulations 10(a), 10(d), 10(m) and 10(n) of CBLR. Violation of of Regulation 10(a) - failure to check whether third person Shri Ravindra Sonar (from whom CB accepted the documents) is an authorised representative of the importer firm M/s Albela Traders and has power to authorize the appellants CB for filing the documents or not - HELD THAT - In the absence of any document to prove the claim of that the appellants had acted in an unauthorized manner in mis-declaration of the goods or in smuggling of the contraband, it is difficult for fastening such liability on the appellants CB for holding them responsible for violation of Regulation 10(a) ibid. Violation of Regulation 10(d) ibid - HELD THAT - In the instant case, the smuggling of gold in imported consignment was found by the department only on the basis of specific investigation conducted by the DRI authorities, and it was a case of concealment of gold in the declared imported goods. It is also a fact that there was no misdeclaration in any of the documents or in the imported goods. Hence, the appellants CB cannot be found fault for the reason that they did not advise their client importer to comply with the provisions of the Act. The act of smuggling is a conspiracy created by the smuggling syndicate in which there was no role of appellants CB. Further, the voluntary statement given by Ms. Priya Hemant Bandarkar, Proprietor of the appellants CB firm on 04.04.2019 clearly show that such smuggling activity in the imported consignment was not known to the appellants CB. Thus, there is no possibility for the appellants CB to bring it to the notice of the Deputy Commissioner of Customs (DC) or Assistant Commissioner of Customs (AC) about the misdeclaration of imported goods involving smuggling of gold - the violation of Regulation 10(d) ibid, as concluded in the impugned order is not sustainable. Violation of Regulation 10(m) - HELD THAT - There is no case of importer or any other person having complained about the inefficiency or delay in clearance of the imported goods by the appellants CB. In the DRI investigation report recorded in inquiry proceedings also it was brought out that the smuggling of gold has been orchestrated by a syndicate in which none of the appellants CB s employees or proprietor is involved. Therefore, the conclusion arrived at by the learned Commissioner of Customs that the appellants have failed to discharge their obligations cast on him under Regulation 10(m) ibid is factually not supported by any evidence and thus it is not legally sustainable. Violation of Regulation 10(n) - HELD THAT - 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 on this basis. There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revoking the CB license of the appellants; and for forfeiture of entire security deposit, inasmuch as there is no violation of Regulation 10(a), 10(d) and 10(m) of the CBLR, 2018, 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 Regulation 10(n) ibid, particularly when they had received the documents from importer through intermediary, we find that it is justifiable to impose a penalty of Rs.10,000/-, which would be reasonable. The impugned order is set aside - appeal allowed.
Issues Involved:
1. Violation of Regulation 10(a) of CBLR, 2018 2. Violation of Regulation 10(d) of CBLR, 2018 3. Violation of Regulation 10(m) of CBLR, 2018 4. Violation of Regulation 10(n) of CBLR, 2018 Summary: Issue 1: Violation of Regulation 10(a) of CBLR, 2018 The Principal Commissioner concluded that the appellants violated Regulation 10(a) by accepting documents from a third person, Shri Ravindra Sonar, without verifying his authorization from the importer, M/s Albela Traders. However, the Tribunal found that the appellants had obtained a written authorization letter dated 24.01.2019 from the importer, and there was no evidence proving that the appellants acted in an unauthorized manner. The Tribunal referenced the case of K.S. Sawant & Co. Vs. Commissioner of Customs (Gen.), Mumbai, where it was held that accepting documents through intermediaries is not barred by CBLR. Therefore, the Tribunal concluded that the appellants did not violate Regulation 10(a). Issue 2: Violation of Regulation 10(d) of CBLR, 2018 The Principal Commissioner held that the appellants failed to advise the importer to comply with the provisions of the Act. The Tribunal found that the smuggling of gold was a conspiracy by a syndicate, and the appellants had no knowledge of it. The voluntary statement of Ms. Priya Hemant Bandarkar confirmed that the appellants were unaware of the smuggling activities. Hence, the Tribunal concluded that the violation of Regulation 10(d) was not sustainable. Issue 3: Violation of Regulation 10(m) of CBLR, 2018 The Principal Commissioner concluded that the appellants lacked due diligence and efficiency, as they were aware of previous smuggling activities. However, the Tribunal found that there was no evidence of inefficiency or delay in the appellants' actions. The appellants cooperated with the investigation, and there were no complaints from the importer or any other person. Therefore, the Tribunal concluded that the violation of Regulation 10(m) was not legally sustainable. Issue 4: Violation of Regulation 10(n) of CBLR, 2018 The Principal Commissioner concluded that the appellants failed in the KYC verification process. The Tribunal found that the appellants had obtained and submitted various KYC documents as required. However, the Tribunal noted that the appellants should have been more diligent, particularly when dealing with documents obtained through an intermediary. The Tribunal referenced the case of M/s Perfect Cargo & Logistics and the judgement of the Hon'ble High Court of Delhi in Kunal Travels (Cargo) Vs. Principal Commissioner of Customs (I&G), IGI Airport, New Delhi, which emphasized the importance of KYC verification. The Tribunal concluded that the appellants failed to act proactively in fulfilling their obligations under Regulation 10(n) and imposed a penalty of Rs.10,000/-. Conclusion: The Tribunal modified the impugned order, revoking the CB license and forfeiting the entire security deposit, as there was no violation of Regulations 10(a), 10(d), and 10(m) of CBLR, 2018. However, a penalty of Rs.10,000/- was imposed for the failure to comply with Regulation 10(n). The appeal was allowed in favor of the appellants.
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