2024 (8) TMI 482 - AT - Customs

Revocation of Customs Broker license - forfeiture of security deposit - imposition of penalty - violation of Regulations 10(a), (d), (e) and (n) of CBLR. Violation of Regulation 10(a) of CBLR - filing of Shipping Bills without authorization - HELD THAT - It is convincing that the omission of the word exports in the body of the authorization letter issued by the exporter is merely a careless omission since the subject of the letter indicates both imports and exports. It is found from the facts of this case that the appellant had not violated Regulation 10(a). Violation of Regulation 10(d) of CBLR - over-valuation of exports to avail undue drawback - HELD THAT - While it is generally the transaction value, the proper officer can, under the Valuation Rules, reject the transaction value and re-determine the assessable value. If the officer re-determines the assessable value, duty, drawback etc. may be determined accordingly. However, it does not change the transaction value which will still be what was agreed to between the buyer and seller. The liability of the buyer will not increase or reduce even if the assessable value is re-determined by the officer. Valuation under the Customs Act is a part of assessment under section 17 of the Customs Act. It can be determined as a part of self-assessment by the importer or exporter or by the officer as a part of re-assessment or by any superior appellate authority while deciding the appeals. The Customs broker has no role or responsibility in deciding the assessable value. The power of the proper officer to determine the correct assessable value as a part of assessment does not lie with the Customs Broker. Thus, we find that the appellant Customs Broker had not violated Regulation 10(d). Violation of Regulation 10(e) - case of department in the offence report is not that the appellant had imparted some information to the exporter which is not correct but that the exporter had over valued exports - HELD THAT - The appellant, as Customs Broker, does not provide the value of the goods. Therefore, the allegation that the appellant had violated Regulation 10(e) is completely unfounded even if the offence alleged in the offence report is correct. Violation of Regulation 10(n) - case of the department is that when officers went to investigate, they found that the exporter was not functioning at its declared address - HELD THAT - If the appellant was guilty of trusting the address given in the IEC when filing the Shipping Bills, so is the Additional Commissioner who sent his order (which forms the offence report in this case) to that very address. There are no hesitation in concluding that there is no evidence whatsoever that the appellant had violated Regulation 10(n). It is found that the findings in the impugned order that the appellant had violated Regulations 10(a), (d), (e) and (n) are not correct and cannot be sustained - the revocation of the appellant s licence, forfeiture of its security deposit and imposition of penalty cannot be sustained - the impugned order is set aside - appeal allowed.

Summary

Issues:
- Did the appellant violate Regulations 10(a), (d), (e) and (n)?
- If so, is the revocation of licence, forfeiture of security deposit and imposition of penalty proportionate to the offence?

Analysis:

Regulation 10(a):
The appellant was accused of violating Regulation 10(a) by not obtaining proper authorization to process exports. The Commissioner concluded that the appellant had no authorization from the exporter based on a typographical error in the authorization letter. However, the appellant argued that the error was inadvertent and that the exporter had indeed authorized them to file the Shipping Bills. The tribunal found that the omission of the word 'exports' was a careless mistake, and considering all circumstances, it was convinced that the appellant had not violated Regulation 10(a).

Regulation 10(d):
The appellant was alleged to have violated Regulation 10(d) by failing to advise the exporter to comply with the Act, resulting in overvalued exports. The tribunal clarified that the Customs Broker is not responsible for determining transaction value or assessable value under the Customs Act. The appellant's role was limited to facilitating customs clearance, and they could not be held accountable for the exporter's actions. Therefore, the tribunal found that the appellant had not violated Regulation 10(d).

Regulation 10(e):
The department accused the appellant of violating Regulation 10(e) by not exercising due diligence in providing correct information to the client. However, since the allegation was related to the exporter's actions of overvaluing exports, which was not within the Customs Broker's purview, the tribunal deemed the accusation unfounded.

Regulation 10(n):
The appellant was charged with violating Regulation 10(n) for not verifying if the exporter operated from the declared address. The tribunal emphasized that verification could be done through reliable documents, and the appellant had obtained valid KYC documents like IEC and GSTIN, indicating the exporter's operation at the declared address. The tribunal held that the responsibility for issuing fraudulent documents rested with the officers, not the Customs Broker, and concluded that the appellant had not violated Regulation 10(n).

In conclusion, the tribunal found that the appellant did not violate any of the regulations in question. Therefore, the revocation of the license, forfeiture of the security deposit, and imposition of penalties were deemed unjustified. The appeal was allowed, and the impugned order was set aside, providing consequential relief to the appellant.