2024 (10) TMI 576 - AT - Customs

Revocation of customs broker licence of the appellant - forfeiture of security deposit and imposition of penalty - import of prohibited goods - contravention of Regulations 10(a) 10(b) 10(d) 10(e) 10(f) and 10(k) of the Customs Broker Licencing Regulations 2018 CBLR - Whether the appellant had acted as the Customs Broker with respect to the bill of entry and instead of using its own licence used the licence of M/s Prakhar Gupta and filed the bill of entry? - Proportionality of the punishment to the violations. HELD THAT - It is evident that Shri Awadhendra Kumar director of the appellant had filed the bill of entry using the Customs Broker licence of M/s Prakhar Gupta. This fact having been admitted need not be proved. It is also a matter of record that all documents were sent by the importer to the appellant s E-mail ID and the importer had not contacted Shri Prakhar Gupta. Shri Prakhar Gupta also confirmed that he had allowed the appellant to use his licence to file bill of entry although he denied allowing them to use his licence in respect of this bill of entry. It needs to be pointed out that bills of entry are filed online through the Customs EDI system. Therefore it is imposible for anyone to file a bill of entry using the credentials of a Customs Broker unless the Customs Broker lends its credentials to such a person. In this case admittedly Shri Prakhar Gupta had lent his credentials to the appellant. Shri Awadhendra Kumar Director of the appellant used those credentials to file this Bill of entry. The importer only contacted the appellant and not Shri Prakhar Gupta and sent the relevant documents to the appellant. Admittedly the appellant filed the bill of entry using the credentials of Shri Prakhar Gupta. Shri Prakhar Gupta clearly erred in subletting his licence to the appellant. However the appellant also violated the conditions of CBLR and instead of obtaining an authorization to file the bill of entry from the importer in its own name and then filing the bill of entry using its own credentials it filed the bill of entry using the credentials of Prakhar Gupta. Through this Bill of Entry the appellant attempted to clear prohibited goods. The appellant should not have filed the bill of entry but instead should have brought such imports to the notice of Assistant Commissioner or Deputy Commissioner - the appellant is trying to profit from its own wrong. It is like a boy who murdered both his parents and sought mercy on the ground that he was an orphan. The appellant was indeed the Customs Broker in this case although it avoided being exposed by illegally using the credentials of another Customs Broker. Another contention of the appellant is that revocation of licence takes away the livelihood of the Customs Broker and its employees and therefore such harsh action should not be taken - In this case the intentions of the appellant are clear. It has its own Customs Broker licence but instead of using its licence it used the licence of another Customs Broker and filed a bill of entry so as to facilitate clearance of prohibited goods. It is not a case of innocent violation or minor infraction. Its clear a case of facilitation of import of prohibited goods. To cover it up the appellant used the identity of another Customs Broker illegally for the purpose. Violation of Regulation 10 (a) - HELD THAT - Regulation 10 (a) requires the Customs Broker to obtain an authorization from each of the companies firms or individuals by whom he is employed as Customs Broker and produce such authorization when required by the Deputy Commissioner or Assistant Commissioner of the Customs. In this case the appellant had not obtained any authorization at all from the importer and yet filed the bill of entry and used the credentials of another Customs Broker M/s Prakhar Gupta to file the bill of entry. There are no hesitation in upholding the decision in impugned order that the appellant had violated Regulation 10 (a). Violation of Regulation 10 (d) - HELD THAT - Regulation 10 (d) requires the Customs Broker to advise his client to comply with the provisions of the Customs Act other allied Acts and Rules and Regulations thereof and in case of non-compliance bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs. Evidently the goods which were imported by M/s JCS Botanicals were prohibited for import - Instead of advising its client or intimating the Assistant Commissioner about the import prohibited goods the appellant filed the bill of entry in an attempt to clear them. In order to conceal this fact it used the credentials of another Customs Broker M/s Prakhar Gupta. There are no manner of doubt that the appellant violated Regulation 10 (d). Violation of Regulation 10 (e) - HELD THAT - Regulation 10 (e) requires the Customs Broker to exercise due diligence to ascertain the correctness of any information which he imparts to a client with respect to any work related to clearance of cargo or package. In this case the appellant did not impart correct information to its client nor did it disclose its own name as the Customs Broker in the bill of entry. Therefore appellant has clearly violated Regulation 10 (e). Violation of Regulation 10 (f) - HELD THAT - Regulation 10 (f) requires the Customs Broker to not withhold information contained in any order instruction or public notice relating to parents of cargo or package issued by Customs authorities as the case may be from a client who is entitled to such information. There is nothing on record to show that the appellant had informed the importer about the prohibitions on the import of the goods as per the Plant Quarantine Laws. Therefore the allegation of violation of Regulation 10 (f) needs to sustain. Violation of Regulation 10 (k) - HELD THAT - Regulation 10 (k) requires the Customs Broker to maintain up-to-date records such as bill of entry shipping bill trans-shipment application etc. All correspondence other papers relating to his business as Customs Broker and accounts including financial transactions in an orderly and itemized manner. In this case the importer stated that he had sent the documents/details of the consignment by E-mail to accounts@goodwingsmeritime.com of the appellant on the direction of its Director Shri Awadhendra Kumar and that Shri Awadhendra Yadav collected the original documents but he failed to submit the original documents even when the customs authorities asked for them. Thus the allegation of violation of Regulation 10 (k) of CBLR needs to be sustained. Proportionality of the punishment to the violations - HELD THAT - This is not a case of lapse of the appellant due to carelessness or oversight. A Customs Broker is naturally expected to file the bills of entry in its own name just as an advocate is expected to file a vakalatnama in his own name in any court of law - The imported goods were prohibited and the bill of entry filed using the credentials of another Customs Broker and in the appeal before us the submission of the appellant is that it is absolved of all responsibility because it used the credentials of another Customs Broker. It is not in dispute that all activities from bill of entry to obtaining the documents by E-mail and also physically and further participating in the examination of the goods is done by the appellant itself. There are no room for any leniency being shown to the appellant. There are no reason to interfere with the impugned order. The impugned order is upheld and the appeal is dismissed.

Summary

Issues Involved:

1. Violation of Regulations 10(a), 10(d), 10(e), 10(f), and 10(k) of the Customs Broker Licensing Regulations, 2018 (CBLR).
2. Proportionality of the penalty imposed, including revocation of the customs broker license, forfeiture of security deposit, and imposition of a penalty of Rs. 50,000/-.

Detailed Analysis:

1. Violation of CBLR Regulations:

The core issue revolves around whether the appellant, M/s Goodwings Maritime Pvt. Ltd., violated certain provisions of the CBLR. The Tribunal examined the facts and submissions to determine if the appellant contravened Regulations 10(a), 10(d), 10(e), 10(f), and 10(k).

- Regulation 10(a): This regulation mandates that a customs broker must obtain authorization from the importer. The appellant failed to secure such authorization and filed the bill of entry using another customs broker's credentials, namely M/s Prakhar Gupta. The Tribunal found this to be a clear violation, as the appellant did not act under its own name or license.

- Regulation 10(d): This regulation requires the customs broker to advise clients to comply with customs laws and inform authorities in case of non-compliance. The appellant did not inform the importer about the prohibition on the imported goods and attempted to clear them, thus violating this regulation.

- Regulation 10(e): The customs broker is required to exercise due diligence in ascertaining the correctness of information imparted to clients. The appellant failed to provide correct information and did not disclose its own name as the customs broker, thereby violating this regulation.

- Regulation 10(f): The appellant did not inform the importer about the prohibitions under the Plant Quarantine Laws, which was necessary for the clearance of goods. This failure constituted a violation of Regulation 10(f).

- Regulation 10(k): The appellant did not maintain up-to-date records as required, and failed to submit original documents when requested by customs authorities, leading to a violation of this regulation.

2. Proportionality of Penalty:

The Tribunal assessed whether the penalties imposed were proportionate to the violations committed by the appellant.

- The Tribunal emphasized the responsibility of a customs broker to act truthfully and uprightly. The appellant's actions, such as using another broker's credentials to file the bill of entry and attempting to clear prohibited goods, were seen as serious violations that justified the harsh penalties imposed.

- The argument that the revocation of the license affects the livelihood of the appellant and its employees was considered. However, the Tribunal found that the severity of the appellant's actions, including facilitating the import of prohibited goods and using another broker's credentials, warranted the revocation of the license and other penalties.

- The Tribunal rejected the appellant's contention that it should not be held responsible for the actions of its directors and employees, affirming that a customs broker is accountable for its staff's actions.

- The Tribunal concluded that the appellant's violations were not minor lapses but deliberate actions to circumvent customs regulations, and thus, the penalties were deemed appropriate.

In conclusion, the Tribunal upheld the impugned order, finding no merit in the appellant's arguments and dismissing the appeal. The revocation of the customs broker license, forfeiture of the security deposit, and the penalty were affirmed as proportionate responses to the violations committed.