2025 (2) TMI 528 - AT - Customs

Revocation of the Customs Broker License - Levy of penalty - role of the Customs Broker/appellant in the diversion of the Bond to Bond transfer of the impugned goods - CB failed to verify the registered address and antecedents of the importer - CB failed to check the KYC and functioning of the company at the registered address - violation of the provisions of Sections 10(d) 10(m) and 10(n) of the CBLR 2018. Violation of Regulations 10(d) - HELD THAT - It is observed that the importer has himself signed the bond papers. The signature available on the documents were verified by the bank authorities and found to be genuine. Accordingly the new Customs Broker i.e. the appellant submitted the documents for bond to bond transfer which was on the basis of the documents submitted by the importer. Thus there is no evidence on record to establish that the appellant has wrongly advised the importer and violated the provisions of Regulation 10(d) of the CBLR 2018. Accordingly the appellant has not violated the Regulation 10(d) of the CBLR 2018. Violation of Regulation 10(m) - HELD THAT - The Inquiry Officer after examining the facts and evidences available on record has arrived at the conclusion that the appellant has not violated the provisions of Regulation 10(m) of the CBLR 2018. The ld. adjudicating authority has not given any reason for rejection of this finding of the I.O. It is observed that the appellant has discharged his duties with efficiency and no delay observed. Accordingly the findings of the I.O is agreed upon and it is held that the violation of Regulation 10(m) as alleged in the impugned order is not substantiated. Violation of Regulation 10(n) - HELD THAT - The importer was in existence at the time of initial filing of the Warehousing (Into-Bond) Bills of Entry and at the time of bond to bond transfer the importer himself has signed the bond and his signature has also been found to be genuine as verified by the Bank officials. Documents like IEC GSTIN and PAN card submitted by the importer were also found to be genuine and the Customs Broker has verified the genuineness of the importer based on the available documents. Thus the submission of the Customs Broker that the Customs Broker is not expected to physically visit the premises of each and every importer to verify their existence at the address agreed upon. Accordingly the appellant has not violated Regulation 10(n) of the CBLR 2018. Conclusion - The violation of Regulations 10(d) 10(m) and 10(n) of the CBLR 2018 as alleged against the appellant in the impugned order are not substantiated. Accordingly the revocation of their Customs Broker Licence based on the above said allegations is also not sustainable. As the allegations against the appellant is not sustained the penalty imposed on the appellant is not sustainable. The impugned order set aside - appeal allowed.

Summary

The Tribunal considered several core legal issues in the appeal against the revocation of the Customs Broker License of M/s. IWW Logistics Pvt. Ltd. and the imposition of a penalty. The primary issues were whether the Customs Broker violated Regulations 10(d), 10(m), and 10(n) of the Customs Brokers Licensing Regulations (CBLR), 2018, and whether the revocation of the license and the penalty imposed were justified.

The relevant legal framework involved the obligations of a Customs Broker under the CBLR, 2018, specifically Regulations 10(d), 10(m), and 10(n). Regulation 10(d) requires a Customs Broker to advise clients to comply with relevant laws and report non-compliance to customs authorities. Regulation 10(m) mandates the Customs Broker to perform duties with speed and efficiency. Regulation 10(n) requires the verification of the Importer Exporter Code (IEC), GSTIN, and the identity and functioning of the client at the declared address using reliable documents.

The Tribunal's interpretation and reasoning were based on the findings of the Inquiry Officer and the evidence presented. The Inquiry Officer's report partially substantiated the violation of Regulation 10(d) but found no violation of Regulation 10(m) and sustained the violation of Regulation 10(n). However, the Tribunal found that the Inquiry Officer's findings were not adequately supported by evidence, and the adjudicating authority failed to provide sufficient reasons for rejecting the Inquiry Officer's conclusions.

Regarding Regulation 10(d), the Tribunal noted that the appellant had complied with all necessary documentation for the bond-to-bond transfer and there was no evidence of advising the importer against compliance. The Tribunal concluded that there was no violation of Regulation 10(d).

For Regulation 10(m), the Tribunal agreed with the Inquiry Officer's finding that the appellant performed duties efficiently and without delay, as all required procedures for the bond-to-bond transfer were followed. The Tribunal found no substantiation for the alleged violation of Regulation 10(m).

Concerning Regulation 10(n), the Tribunal referenced a decision by the Hon'ble High Court at Calcutta, which stated that a Customs Broker is not obligated to physically verify the functioning of a client at their declared address. The Tribunal found that the appellant had verified all necessary documents, which were genuine, and thus did not violate Regulation 10(n).

Significant holdings included the Tribunal's determination that the allegations of violations of Regulations 10(d), 10(m), and 10(n) were not substantiated. The Tribunal emphasized that the Customs Broker's obligations under Regulation 10(n) do not extend to ensuring the correctness of government-issued documents or physically verifying a client's operational address. The Tribunal held that the revocation of the Customs Broker License and the imposition of a penalty were not sustainable.

The Tribunal set aside the impugned order and allowed the appeal, concluding that the appellant did not violate the specified regulations and that the penalty imposed was unwarranted.