2019 (4) TMI 1048 - AT - Customs

Revocation of CHA License - forfeiture of security deposit - contravention of Regulation 11(a), 11(d) and 11(e) of the CBLR, 2013 - HELD THAT - So far as the compliance of the Regulation 11 (a) of CBLR is concerned which provides that Customs Broker shall obtain the authorization from each of the companies, firms or individuals with whom he is for the time being employed as Customs Broker and produce authorization whenever required of Deputy Commissioner of Customs or Assistant Commissioner as the case may be - In this regard, it is found that the appellants had not only taken the appropriate authorization from the importer, namely M/s. Jagdamba Enterprises but all the KYC documents such as IEC registration copy, authority letter, ID proof, PAN card etc. The appellant have taken due caution as was mandated under the Customs Broker License Regulation and same has been produced to the investigating agency - obtaining copy of the IEC Code number, Pan card and other details after verification of same with the original documents, including a proper authorization letter for trading, clearing work of the importing firm is an enough compliance of CBLR 11 (a) - the findings on this count by the adjudicating authority are not legally sustainable. Compliance of Regulation 11(d) and 11(e) of the CBLR 2013 - HELD THAT - The appellant was regularly engaged by the importer for clearing their import consignment and they have cleared 11 consignments of same importer on the previous occasions wherein no violation of the Customs Act have been detected. This very fact proves that the appellants have ensured the compliance of Customs provisions from the importer on the previous occasions and thus, there is no reason why he would not advice him correctly to follow provisions of law for the impugned import consignment - The entire investigations in this matter does not establish any case of connivance of the appellant in mis-declaration of the contents of the import consignment. The violation of regulation 11(a), 11 (d) and 11(e) of CBLR 2013 is not established against the appellant - the revocation of Customs Broker License is not justified - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Revocation of Customs Broker License based on non-compliance with CBLR regulations.
2. Compliance with Regulation 11(a) of CBLR 2013 regarding obtaining authorization from the importer.
3. Compliance with Regulations 11(d) and 11(e) of CBLR 2013 regarding advising the client to comply with Customs Act provisions and exercising due diligence.

Analysis:

Issue 1: Revocation of Customs Broker License
The Commissioner of Customs issued a show cause notice to the appellants for penalty under Customs Act sections 112(a) and 114 AA based on an offense report regarding mis-declared goods imported by M/s. Jagdamba Enterprises. Subsequently, the Customs Broker License was revoked under Regulation 11(a), 11(d), and 11(e) of CBLR 2013, with a penalty imposed. The appellants challenged this order.

Issue 2: Compliance with Regulation 11(a) of CBLR 2013
The appellants contended that they had obtained all necessary KYC documents from the importer, M/s. Jagdamba Enterprises, as mandated under Regulation 11(a). The appellants argued that they had fulfilled the requirement by verifying and obtaining IEC copy, authority letter, ID proof, and other documents. The Tribunal found that the appellants had complied with the regulation by obtaining the necessary authorization and documents, as evidenced by the KYC submitted to the investigating agency.

Issue 3: Compliance with Regulations 11(d) and 11(e) of CBLR 2013
Regulations 11(d) and 11(e) require the Customs Broker to advise the client to comply with Customs Act provisions, bring non-compliance to the Customs authorities' notice, and exercise due diligence in providing accurate information. The Tribunal noted that the appellants had cleared 11 consignments of the same importer previously without any Customs Act violations. It was found that the appellants had advised the client correctly, ensured compliance with Customs provisions, and exercised due diligence. The Tribunal held that there was no evidence of connivance or mis-declaration by the appellants, and the revocation of the Customs Broker License was unjustified.

In conclusion, the Tribunal set aside the order revoking the Customs Broker License, stating that the violations of CBLR regulations were not established against the appellants. The appeal was allowed, providing consequential relief, if any.

Judgment: The order revoking the Customs Broker License was deemed without merit and set aside, allowing the appeal with consequential relief.

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