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2024 (12) TMI 541 - AT - CustomsContravention of Regulations 1(4), 10(d), 10(e), 10(n) and 13(12) of CBLR, 2018 - fulfilment of prescribed time under CBLR for timely completion of inquiry proceedings - whether the appellant Customs Broker has fulfilled all his obligations as required under CBLR, 2018 or not? - HELD THAT - The specific sub-regulations which were alleged to have been violated by the appellants are Regulations 1(4), 10(d), 10(e), 10(n) and 13(12) of CBLR, 2018, and hence there are certain distinct charges framed against the appellants in the present case. The Regulation 10 ibid, provide for the obligations that a Customs Broker is expected to fulfill during their transaction with Customs in connection with import and/or export of goods. The imports in respect of Tempered glass screen protector for which B/E No. 2640242 dated 05.02.2021 and No. 2697872 dated 09.02.2021 were filed by the appellants as Customs Broker, was preceded with the appellants CB seeking from the importer, through their logistics intermediary M/s Ibrahim Hirani, all requisite basic documents such as commercial invoice, packing list, authority letter and other relevant documents for KYC verification in handling the imports with customs. Further, there is no case of mis-declaration with respect to the documents submitted along with the B/Es, and such misdeclaration were identified by Customs, only upon physical examination of the goods - the appellants have duly filed the bill of entry as per the documents given by the importers and 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. Hon ble Supreme Court had held in the cased of NORTHERN PLASTIC LTD. VERSUS COLLECTOR OF CUSTOMS CENTRAL EXCISE 1998 (7) TMI 91 - SUPREME COURT holding that the declaration of the description of goods given correctly and fully in the Bill of Entry/classification declaration laying claim to some exemption was in the nature of a claim made on the basis of the belief entertained by the appellant and therefore, cannot be said to be a mis-declaration for the purpose of Customs Act. In the absence of any specific evidential document or factual record, it cannot be stated that the appellants had prior knowledge about misdeclaration of description, quantity of imported goods by the importer, and these have been withheld by the appellants. Thus, it is not feasible to sustain such a charge on the appellants, that they did not exercise due diligence to impart correct information to their clients and thus the conclusion arrived at by the Principal Commissioner of Customs (General) is without any basis of documents or facts, in the impugned order with respect to Regulation 10(e) ibid, is not sustainable. There is definitely delay in conduct of inquiry proceedings and that too for the import transactions for which the offence was detected in February, 2021, the order of revocation of appellant s CB license has been passed on 12.05.2023. The learned Principal Commissioner explained that the delay is on account of the inquiry proceedings in which the appellants CB had taken time to give their written submissions, but such delay cannot be fatal to outcome of injury and cannot neutralize the actions of omission and commission already committed by the CB. The prescribed time under CBLR for timely completion of inquiry proceedings right from the beginning i.e., issue of SCN within a period of 90 days from the date of receipt of offence report, submission of inquiry report within 90 days of issue of SCN, passing of order by the Principal Commissioner of Customs within 90 days of receipt of inquiry report was neither followed nor given credence to. The inordinate delay in the inquiry proceedings in this case has not been properly explained in the impugned order; and the learned Principal Commissioner had put the entire blame on the appellants CB. The impugned order is modified by setting aside the same in respect of revocation of CB license of the appellants and for forfeiture of security deposit as there was no violation of Regulations 1(4), 10(d), 10(n) and 13(12) of CBLR, 2018 of CBLR, 2018. Further, by modifying the impugned order for imposition of penalty, a penalty of Rs.5,000/- is imposed on the appellants for violation of Regulation 10(e) ibid on account of their failure to handle documents exercising due diligence, in filing import declarations - appeal allowed in part.
Issues Involved:
1. Whether the appellant Customs Broker fulfilled all obligations under the Customs Brokers Licensing Regulations (CBLR), 2018. 2. Alleged violations of specific sub-regulations: Regulations 1(4), 10(d), 10(e), 10(n), and 13(12) of CBLR, 2018. 3. Timeliness and procedural aspects of the inquiry and adjudication process under CBLR, 2018. Detailed Analysis: 1. Compliance with CBLR, 2018 Obligations: The main issue was whether the appellant Customs Broker complied with the obligations under CBLR, 2018. The Tribunal examined if the Customs Broker had fulfilled duties related to advising clients, exercising due diligence, and verifying client identity and operations. It was concluded that the Customs Broker had indeed filed the Bill of Entry based on the documents provided by the importer and was not aware of any misdeclaration. Therefore, the Tribunal found no evidence supporting a violation of Regulation 10(d), which requires brokers to advise clients on compliance with customs laws. The Tribunal also referenced a Supreme Court judgment, indicating that a belief-based claim in import declarations cannot be deemed misdeclaration. 2. Alleged Violations of Specific Sub-Regulations: - Regulation 10(d): The Tribunal found no evidence that the Customs Broker failed to advise the importer on compliance with customs laws. The misdeclaration was identified only upon physical examination by customs, not due to any omission by the broker. - Regulation 10(e): The Tribunal noted that the Customs Broker interacted with the importer through a logistics intermediary, which was deemed acceptable. However, the Tribunal found a violation due to the broker's dongle being used by unauthorized persons to file documents, which warranted a penalty. - Regulation 10(n): The Tribunal highlighted that the Customs Broker had verified the importer's existence through documents, fulfilling the KYC obligations. The Tribunal referenced CBIC guidelines and previous judgments, concluding that the broker met the requirements of Regulation 10(n). - Regulations 1(4) and 13(12): The Tribunal found no evidence supporting allegations of sub-letting the license or failing to supervise employees, dismissing these charges. 3. Timeliness and Procedural Aspects: The Tribunal scrutinized the timeline of the inquiry and adjudication process. It noted significant delays from the initial offense report to the final order, which spanned over two years. The Tribunal referenced a High Court judgment emphasizing the need for adherence to prescribed timelines to avoid undue delays. The Tribunal criticized the lack of timely action and accountability by customs authorities, acknowledging the undue hardship faced by the Customs Broker due to prolonged suspension of the license. Consequently, the Tribunal set aside the revocation of the license and forfeiture of the security deposit, citing a lack of substantial violations and procedural delays. Conclusion: The Tribunal partially allowed the appeal, setting aside the revocation of the Customs Broker's license and forfeiture of the security deposit, while imposing a nominal penalty for the violation of Regulation 10(e). The decision underscored the importance of procedural fairness and adherence to timelines in regulatory proceedings.
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