2018 (8) TMI 1603 - AT - Customs

Prohibition of appellant-CHA to transact the business under Chennai Customs jurisdiction - Detention of Consignment - undeclared item such as acquarium lamp, plastic light clips, fish tank cleaner and trolley bags found in the consignment - the prohibition order is issued for the reason that the importer has not declared the items. Held that - The CHA is not an inspector to weigh the genuineness of the transaction. It is a processing agent of documents with respect to clearance of goods through customs house. It was observed that it would be far too onerous to expect the CHA to inquire into and verify the genuineness of the IEC given to it by a client for each import / export transaction. When such code is mentioned, there is a presumption that an appropriate background check in this regard i.e. KYC etc. would have been done by the customs authorities. Thus, in the present case, IEC was mentioned in the documents. Therefore, appellant cannot be saddled with the obligation that they have not verified the antecedents of the importer namely M/s. J.J. Enterprises. Also, such continuation of the probation order without prescribing a time-limit would be bye passing Regulation 20 with regard to suspension / revocation of the licence. Appeal allowed - decided in favor of appellant.

Summary

Issues: Allegation of violation of Regulation 11(d) and 11(n) of CBLR, 2013 leading to a prohibition order in Chennai Customs jurisdiction.

In this case, M/s. Global Agencies, a Customs Broker, was prohibited from transacting business under Chennai Customs jurisdiction due to alleged violations of Regulation 11(d) and 11(n) of CBLR, 2013. The issue arose when a consignment declared as fish tanks was found to contain undeclared items upon examination. The department alleged that the appellant failed to advise the client to declare the items and did not verify the antecedents of the importer, M/s. J.J. Enterprises. The appellant contended that they had obtained authorization from the importer, which was produced before the authorities. They argued that as Customs Brokers, they cannot verify the goods' description and can only act upon the documents provided by the importer. The appellant also highlighted the lack of evidence showing connivance in misdeclaration and cited legal precedents to support their defense. The department, however, maintained that the appellant should have obtained authorization from the importer and advised the client to comply with regulations. They argued that the time limit provisions did not apply to the continuation of the prohibition order.

The Tribunal analyzed the allegations and legal provisions, noting that the prohibition order was based on the importer's failure to declare certain items and an alleged lack of verification of the importer's identity. Referring to legal precedents, the Tribunal emphasized that Customs Brokers are not required to independently verify all information provided by importers. The Tribunal observed that the appellant had obtained authorization and that the mention of Importer Exporter Code (IEC) in the documents implied a background check by customs authorities. The Tribunal concluded that there was no valid ground for the prohibition order or its continuation without a time limit, which would circumvent Regulation 20 regarding license suspension/revocation. Therefore, the impugned order was set aside, and the appeal was allowed with consequential relief.