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2024 (8) TMI 1059 - AT - CustomsRevocation of the appellant s CB license - imposition of penalty and forfeiture of security deposit - violation of Regulations 10(a), 10(b), 10(d), 10(e), 10(m) and 10(n) of CBLR, 2018 or not - whether the appellant Customs Broker has fulfilled all his obligations as required under CBLR, 2018 or not? - HELD THAT - In both the B/Es filed by the appellants CB on behalf of the importer, had declared the proper description of the imported goods and its value has been indicated as per the documents given to them by the importer. In fact, the various query raised by the customs officer raising any doubt in compliance, value of the goods has been satisfactorily explained and the goods have been assessed to customs duty. It is not the case of Revenue, that the description, value particulars of imported goods indicated in the B/Es were different from the one indicated in the commercial invoices submitted to the Customs at the time of filing of B/Es. The facts indicate that Shri Laxmi Narayan Mishra, who had fabricated the description of the invoice in this case was actually involved in preparation of parallel fabricated invoice with incorrect description and connected violations in respect of imported goods. There are no strong grounds to hold that the appellant CB has violated the Regulation 10(a) ibid, only on the ground that they had accepted the documents indirectly from the importer through the logistics service provider. However, as the mis-declaration is apparent in the documents relating to import submitted along with the Letter of Authority given to the appellants, to the extent of mis-match in the description of the goods in MAWB and invoices, the appellants CB should have been more careful in scrutiny of the authority letter dated 28-8-2019 given to them along with import documents particularly when these were received from person other than importer who is in logistic trade, in the light of above DGFT s policy circular dated 16-9-2013. The appellants CB had declared the description of the imported goods and other details in both the B/Es for aforesaid imports as given in the invoices supplied by the importer. Further, the appellants were not aware of the mis-declaraton of the imported goods as there was no evidence to the claim of the department that the appellants knew about mis-declaration and further all incriminating documents were recovered only from Shri Naseer Amir Khan, who is claimed to be the beneficial owner of imported goods - the declaration made in the Bills of Entry is the same as that is provided in the Commercial invoices, and the description declared as per invoices were fabricated by Shri Laxmi Narayan Mishra by preparing parallel set of invoices, which could not be detected even by the customs authorities at the time of assessment or at the time of clearance of the goods. In the absence of any document to prove the claim of mis-declaration of goods, it is difficult to fasten such liability on the appellants CB. It is found that the appellants CB could have been proactive in fulfilling their obligation as Customs Broker for exercising due diligence, particularly when the import documents were obtained from the importers through an intermediary in ensuring that all documents relating to imports are genuine and that these are not fake or fabricated - the appellants CB are found to have not complied with the requirement of sub-regulation 10(a) ibid and thus imposition of penalty to this extent, for failure in not being proactive for fulfilling of Regulation 10(a) of CBLR, 2013 alone, is appropriate and justifiable. There are no merits in the impugned order passed by the Learned Principal Commissioner of Customs (General), Mumbai in revoking the license of the appellants; for forfeiture of security deposit and imposition of penalty, inasmuch as there is no violation of Regulations 10(b), 10(d), 10(e), 10(m) and 10(n) ibid, and the findings in the impugned order is contrary to the facts on record - appeal allowed.
Issues Involved:
1. Violation of Regulation 10(a) of CBLR, 2018 2. Violation of Regulation 10(b) of CBLR, 2018 3. Violation of Regulation 10(d) of CBLR, 2018 4. Violation of Regulation 10(e) of CBLR, 2018 5. Violation of Regulation 10(m) of CBLR, 2018 6. Violation of Regulation 10(n) of CBLR, 2018 Detailed Analysis: 1. Violation of Regulation 10(a) of CBLR, 2018: The adjudicating authority found that the appellants CB did not obtain authorization from the IEC holder but from an employee of a logistics company. The tribunal noted that the appellants declared the description of the imported goods as per the invoices supplied by the importer. The tribunal cited previous judgments and a DGFT circular to conclude that accepting documents from intermediaries is not barred by CBLR, provided there is no misuse of IEC. The tribunal found no strong grounds to hold that the appellants violated Regulation 10(a) but noted that they should have been more careful in scrutinizing the documents. 2. Violation of Regulation 10(b) of CBLR, 2018: The Principal Commissioner concluded that the appellants violated Regulation 10(b) by allowing unauthorized persons to handle customs clearance. The tribunal found that the employees involved were either authorized or held valid 'H' cards. The tribunal concluded that the conclusion of unauthorized handling was contrary to the facts and thus not sustainable. 3. Violation of Regulation 10(d) of CBLR, 2018: The Principal Commissioner concluded that the appellants failed to advise their client to comply with the provisions of the Act. The tribunal noted that the appellants were not aware of the misdeclaration, as all incriminating documents were recovered from another individual. The tribunal concluded that there was no possibility for the appellants to bring the misdeclaration to the notice of customs authorities, thus the violation of Regulation 10(d) was not sustainable. 4. Violation of Regulation 10(e) of CBLR, 2018: The Principal Commissioner concluded that the appellants did not exercise due diligence. The tribunal noted that the appellants were not aware of the misdeclaration and that the Bills of Entry were assessed by customs authorities. The tribunal concluded that the charge of not exercising due diligence was without any basis of documents or facts, making the impugned order with respect to Regulation 10(e) not sustainable. 5. Violation of Regulation 10(m) of CBLR, 2018: The Principal Commissioner concluded that the appellants did not act efficiently. The tribunal found no grounds of inefficiency or delay in the clearance of the imported goods. The tribunal concluded that the conclusion of violating Regulation 10(m) was not sustainable. 6. Violation of Regulation 10(n) of CBLR, 2018: The Principal Commissioner concluded that the appellants did not verify the antecedents and correctness of the importer's documents. The tribunal noted that the appellants had obtained and submitted the required KYC documents. The tribunal cited previous judgments to support its view that the appellants complied with Regulation 10(n), making the impugned order on this issue not sustainable. Conclusion: The tribunal found no merits in the impugned order for revoking the license, forfeiting the security deposit, and imposing a penalty. However, the tribunal noted that the appellants failed to act proactively in scrutinizing documents received through an intermediary, justifying a penalty of Rs. 10,000. The appeal was allowed in favor of the appellants with the modification of imposing a penalty.
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