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2022 (7) TMI 370 - AT - CustomsSuspension of their Custom Broker License - Import of Areca Nut - importer has concealed the goods and tried to evade the compliance of FSSAI Act - validity of statements under Section 108 of Customs Act 1962 - failure to follow Regulation 10(d) and 10(n) of CBLR 2018 - HELD THAT - The appellant was never in direct contact with the importer. Therefore he could not have been in position to advice his client as requires under Regulation 10(d) of CBLR 2018. The defence of the appellant i.e. the sealed container was received and the appellant had no occasion to come to know about the mis-declaration and therefore could not have possibly informed the authorities. The next charge on the appellant is failure to follow Regulation 10(m) of CBLR 2018. The said regulation requires the Customs Broker to discharge his duties as the Custom Broker utmost speed and efficiency and without any delay. The impugned order holds that the appellant had never communicated with the importer and did not verify the registered address as mentioned in KYC form of the importer. The impugned order. The impugned order also notices that the appellant had not verified the financial background of the importer. It could not be the responsibility of Custom Broker to actually physically verify the address of the importers or the financial background of the importer - The impugned order holds that the Custom Broker failed to follow due diligence before accepting the custom clearance work of the importers. Failure to follow the Regulation 10(n) of CBLR 2018 - requirement on the part of the Custom Broker to verify correctness of Importer Exporter Code IEC number GSTIN identity of his client and functioning of his client at the declared address by using reliable independent authentic documents data or information - HELD THAT - The impugned order holds that the appellant failed to verify the registered address as mentioned in KYC form before taking up the job as Custom Broker for clearance of the said import consignment. The appellant has claimed that the KYC documents were verified by them on the strength of the documents supplied by importer namely IEC Code Adhar Card Trade Licence Bank Details IFSC Code with importer name Father s name and full address with photo fixed on KYC form - there is significant force in the argument of appellant that they have done the necessary verification through documents.It is notice that the impugned order is with respect to suspension under Regulation 16(1) of CBLR 2018. The impugned order holds that further inquiry needs to be conducted to arrived at the final decision in the instant case and therefore on that ground upholds the order of suspension of Custom Broker. The suspension may be lifted with immediate effect - Application allowed.
Issues Involved:
1. Suspension of Customs Broker License 2. Mis-declaration of Imported Goods 3. Compliance with Customs Broker Licensing Regulations (CBLR), 2018 4. Verification of Importer's Details and KYC Documents 5. Responsibility and Due Diligence of Customs Broker Issue-wise Detailed Analysis: 1. Suspension of Customs Broker License: The appeal was filed against the suspension of the Customs Broker License of M/s United Customs House Agency. The suspension was upheld by the impugned order dated 16.02.2022. The Tribunal directed that the suspension be lifted with immediate effect, considering the significant time elapsed and the completion of necessary inquiries. 2. Mis-declaration of Imported Goods: The case involved the import of goods declared as "Dammar Baatu" in three containers, which were found to contain "Betel Nuts (Supari)" concealed behind bags of "Dammar Baatu." The Directorate General of Foreign Trade (DGFT) had revised the policy condition for Areca Nut to 'Prohibited' unless the CIF value was Rs. 251/- and above per Kilogram. The concealed goods' approximate value was Rs. 1,56,89,279/-, with a total duty evasion of approximately Rs. 1,72,58,207/-. The goods were considered prohibited as they did not comply with the Food Safety and Standard Act, 2006. 3. Compliance with Customs Broker Licensing Regulations (CBLR), 2018: The appellant was alleged to have failed to follow the provisions of CBLR, 2018, specifically Regulation 10(d), 10(m), and 10(n). Regulation 10(d) obliges a Customs Broker to advise clients to comply with the Customs Act, 1962. Regulation 10(m) requires the Customs Broker to perform duties with efficiency and speed. Regulation 10(n) mandates verifying the correctness of the Importer Exporter Code (IEC) number, GSTIN, and the client's identity and functioning at the declared address using reliable documents. 4. Verification of Importer's Details and KYC Documents: The appellant was alleged to have failed to verify the KYC documents, the registered address of the importer, and the financial background of the importer. The appellant argued that they had verified the GST certificate and IEC on the respective websites and that the documents collected were in accordance with the CBEC circular dated 8th April 2010. The Tribunal noted that it could not be the responsibility of the Customs Broker to physically verify the address or financial background of the importer. 5. Responsibility and Due Diligence of Customs Broker: The Tribunal referred to the Hon'ble High Court of Delhi's observation in the case of Shiva Khurana, which stated that the CHA's duty is to satisfy itself regarding the importer's/exporter's authorization and IEC number, not to investigate the veracity of statements. The Tribunal found significant force in the appellant's argument that they had conducted necessary verification through documents. The Tribunal also referred to the Hon'ble Apex Court's observation in the case of K. M. Gantra & Co., emphasizing the CHA's role in safeguarding interests and the importance of compliance with regulations. Conclusion: The Tribunal concluded that the Customs Broker license suspension should be lifted with immediate effect, given the elapsed time and the likely completion of necessary inquiries. The findings and observations were stated to be interim and not to affect the final decision after the inquiry by the Revenue.
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