2023 (11) TMI 974 - AT - Customs

Revocation of Customs Broker License - at the given premises the said firm was found to be non-existent - non-adherence to the prescriptions concerning KYC norms - HELD THAT - There are absolutely no merit in the plea of the Department alleging failure on the part of the appellant for meeting out their obligations in fulfilment of the KYC requirements. The inherent contradiction made by the Department is self evident, when the department with all the wherewithal at its command, itself fails to take note of the alleged non-existent address, it cannot shoot off the blame for a similar lapse, if any, onto the Customs Broker. It is opined that no action as initiated in the present matter, was made out in the first place. The order of the adjudicating authority is certainly without a toehold of legitimacy and therefore, needs to be set aside. The order of revocation of Customs Broker Licence is set aside and the same is restored - appeal allowed.

Summary

Issues involved:
The issues involved in this case are related to the action taken against a Customs Broker under the Customs Broker Licensing Regulations, 2018 for alleged violations of Regulations 10 (d), 10 (m), and 10 (n) of the CBLR, 2018.

Details of the Judgment:

Issue 1: Alleged Violation of Regulations 10 (d), 10 (m), and 10 (n) of the CBLR, 2018

The appellant, a Customs Broker, was accused of non-adherence to KYC norms as per Regulations 10 (d), 10 (m), and 10 (n) of the CBLR, 2018. The charge was primarily based on discrepancies in the address of the importing firm provided in the authorization letter and the IEC copy. However, the appellant contended that they had fulfilled their obligations by verifying KYC documents, including the importer's identity, with reliable sources such as the Bank and other authentic documents. The appellant argued that they had no business interest beyond their role as a Customs Broker, and no misdeclaration was found during the examination of import consignments. The Department's case rested on the alleged non-existence of the importing firm at the declared address mentioned in the IEC. The appellant presented various verified documents, including authorization, IEC, GST registration, KYC details, Aadhar Card, and PAN Card of the importer, to support their due diligence.

Issue 2: Department's Communication and Alleged Contradictions

During the investigation, internal communications within the Department revealed discrepancies regarding the existence of the importing firm at the declared address. The appellant highlighted these communications to demonstrate that the Department itself had been in contact with the importer at the address deemed "non-existent." The appellant argued that the Department's failure to verify the address accurately should not lead to punitive action against the Customs Broker. The appellant emphasized that Regulation 10(n) did not mandate physical verification of addresses but required verification using reliable and authentic documents. The appellant also pointed out a short time gap between the Department's communications, indicating a lack of merit in the Department's stance.

Issue 3: Legal Precedents and Conclusion

The appellant relied on various case laws to support their contention regarding their obligations under the CBLR, 2018. The Tribunal found no merit in the Department's allegations of the appellant's failure to meet KYC requirements. The Tribunal noted the Department's contradiction in failing to acknowledge the alleged non-existent address while blaming the Customs Broker for a similar lapse. Consequently, the Tribunal set aside the order of revocation of the Customs Broker License and restored the same, ruling in favor of the appellant. The appeal was allowed with all consequential benefits as per law.

In conclusion, the Tribunal found that the Department's allegations against the Customs Broker lacked legitimacy, and the order of revocation of the license was set aside. The judgment was pronounced in open court on 22.11.2023 by the Tribunal members.