2025 (1) TMI 1221 - AT - Customs

Revocation of the Customs Broker License - forfeiture of security deposit - imposition of a penalty on the appellant - violations of the Customs Brokers Licensing Regulation (CBLR) 2018 - appellant had connived with importers to misdeclare the origin of imported goods or not. Whether the appellant as Customs Broker have violated Regulations 10(a) 10(d) 10(e) of Customs Broker License Regulations 2018 (CBLR)? - HELD THAT - Appellant as CB is bound by the documents given to him by the importers. Further till date department has not been able to produce any evidence that any of the documents submitted at the time of clearance of the imported Areca Nuts are forged or false. No report from the Country of Origin i.e Sri Lanka or from the alleged countries i.e. Indonesia and Veitnam have been obtained - The task of verification of documents is of the departmental officers. Law also does not empower the CB to undertake any investigations. Hence this part of the allegation is without any basis and wrongful presumption that CB should have investigated the documents provided by the importers. Further when law of the land states that COO certificates can not be challenged even by the Customs Authorities except by following a prescribed procedure how can a CB challenge those documents and in particular when the certificates were supported by Bill of lading, Commercial invoice etc. None of these documents have been objected nor have been denied by the importers to have been provided to the appellant. Law does not require a custom broker to physically deal with the goods before the same are received in custom area. The Custom Broker operates on the basis of document supplied to him and in that context it can hardly be held that the documents/ details filed by the Custom Broker on the strength of documents supplied by the importers are wrong - there are no merit in confirmation of charge under Regulation 10(d) and 10(e)of the CBLR 2018. The same is therefore liable to be dropped. Violation of provisions of Regulation 11(n) of CBLR 2018 - HELD THAT - Regulation 10(n) does not place an obligation on the Customs Broker to oversee and ensure the correctness of the actions by the Government officers. Therefore the verification of documents part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were indeed issued by the concerned officers. This can be done through online verification comparing with the original documents etc. and does not require an investigation into the documents by the Customs Broker. The presumption is that a certificate or registration issued by an officer or purported to be issued by an officer is correctly issued. Section 79 of the Evidence Act 1872 requires even Courts to presume that every certificate which is purported to be issued by the Government officer to be genuine - the Customs Broker has not failed in discharging his responsibilities under Regulation 10(n). The impugned order is not correct in concluding that the Customs Broker has violated Regulation 10(n). Thus none of the provisions of CBLR 2018 have been violated by the appellants. The findings to that extent are liable to be set aside. Whether the appellant/Customs Broker has connived with the importer and abetted the alleged act of misdeclaring the goods to be of Sri Lankan Origin? - HELD THAT - The statement of appellant cannot be considered for want of any cogent corroboration for it as got retracted at the initial stage of seeking bail. There is no such evidence on record which may prove that COO from Sri Lanka is a fake document that it was not issued by Sri Lankan Government. Thus the very basis of the allegations vanishes. In absence thereof allegation of abetting the alleged imports by appellant being mastermind cannot at all sustain. The findings about retracted statement are wrong in light of the discussed case law while adjudicating Question No.1. Hence appellant is wrongly alleged to be abetter/mastermind for such act/omission which department has failed to prove. There is also no evidence on record to prove that Arica nuts were being imported from Indonesia and black pepeers were being imported from Vietnam. In absence of any such documentary evidence the document issued by Sri Lankan Government (Certificate of Origin) is wrongly been doubted by the department. The sole statement of appellant himself alleging it to be his confession has wrongly been used against him while penalizing him. The adjudicating authority while doing so has acted in gross violation of Article 21 of the Constitution of India. Conclusion - The appellant did not violate any provisions of the CBLR 2018 and there was no evidence of connivance or abetment in the alleged misdeclaration of goods origin. The impugned order is set aside - appeal allowed.

Summary

The Tribunal considered the appeal against the revocation of the Customs Broker License, forfeiture of security deposit, and imposition of a penalty on the appellant. The main issues revolved around alleged violations of the Customs Brokers Licensing Regulation (CBLR) 2018 and whether the appellant had connived with importers to misdeclare the origin of imported goods.

Issues Presented and Considered

The Tribunal identified two primary issues for adjudication:

(i) Whether the appellant violated Regulations 10(a), 10(d), 10(e), and 10(n) of the CBLR, 2018.

(ii) Whether the appellant connived with the importer and abetted the alleged act of misdeclaring the goods' origin.

Issue-Wise Detailed Analysis

1. Violation of CBLR Regulations

Regulation 10(a): The Tribunal examined whether the appellant failed to obtain authorizations directly from importers. The adjudicating authority claimed that the appellant interacted with a third party, Mr. Sarfaraz Khan Pathan, instead of the actual importers. However, the Tribunal found no legal requirement for personal interaction with importers, nor any denial from importers regarding the appellant's authorization. Thus, the Tribunal concluded that the appellant did not violate Regulation 10(a).

Regulation 10(d) and 10(e): These regulations require the Customs Broker to advise clients to comply with customs laws and exercise due diligence in verifying information. The Tribunal noted that the appellant's alleged confessional statements were retracted and lacked corroboration. The Tribunal emphasized the need for corroborative evidence and found none to support the allegations. The Tribunal also highlighted that the appellant's WhatsApp chats did not demonstrate any violation of these regulations. Therefore, the Tribunal held that the appellant did not violate Regulation 10(d) and 10(e).

Regulation 10(n): This regulation mandates verifying the correctness of the Importer Exporter Code (IEC), GSTIN, identity, and functioning of clients. The Tribunal found that the appellant had obtained necessary documents, and there was no evidence of forgery or incorrect issuance of IEC or GSTIN. The Tribunal emphasized that the Customs Broker is not responsible for investigating the correctness of government-issued documents. Hence, the Tribunal concluded that the appellant did not violate Regulation 10(n).

2. Alleged Connivance and Abetment

The Tribunal examined the allegation that the appellant was the mastermind in fraudulently importing goods by misdeclaring their origin. The Tribunal found that the appellant's retracted statements could not be used as evidence without corroboration. Furthermore, there was no evidence proving that the Certificates of Origin were fake or that the goods were not of Sri Lankan origin. The Tribunal emphasized that the burden of proof lay with the department, which failed to provide substantial evidence. Consequently, the Tribunal concluded that the appellant did not connive or abet the alleged misdeclaration.

Significant Holdings

The Tribunal held that the appellant did not violate any provisions of the CBLR, 2018, and there was no evidence of connivance or abetment in the alleged misdeclaration of goods' origin. The Tribunal set aside the order under challenge, allowing the appeal with consequential relief.