Instructions with regard to Compliance of CBLR, 2018 - Customs - 88/2018

GOVERNMENT OF INDIA MINISTRY OF FINANCE, DEPT. OF REVENUE . OFFICE OF THE COMMISSIONER OF CUSTOMS-VIII (General) CUSTOM HOUSE, NO.60, RAJAJI SALAI, CHENNAI-600 001 F. NO. S. Misc. 24/2018-CBS Dated: 29.11.2018 PUBLIC NOTICE NO. -88/2018 Sub: Instructions with regard to Compliance of CBLR, 2018-Reg. ******** Attention of the Customs Brokers , Trade and other Stake Holders of Customs is invited to the Notification No.41 / 2018 -Customs (N.T.) dated 14.05.2018 issued by Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, New Delhi, on the above subject. 2. As per the latest Customs Brokers' Licensing Regulations, 2018 (CBLR, 2018), governing the Customs Brokers, Regulation 10 clearly laid down the obligations to be fulfilled by the Customs Broker and the same is reproduced below for reference: 10 Obligations of Customs Broker - A Customs Broker shall - (a) obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as a Customs Broker and produce such authorisation whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; (b) transact business in the Customs Station either personally or through an authorised employee duly approved by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, (c) not represent a client in any matter to which the Customs. Broker, as a former employee of the Central Board of Indirect taxes and Customs gave personal consideration, or as to the facts of which he gained knowledge, while in Government service; (d) advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; (e) exercise due diligence to ascertain the correctness of any information i which he imparts to a client with reference to any work related to clearance of cargo or baggage; (f) not withhold information contained in any order, instruction or public notice relating to clearance of cargo or baggage issued by the Customs authorities, as the case may be, from a client who is entitled to such information; (g) promptly pay over to the Government, when due, sums received for payment of any duty, tax or other debt or obligations owing to the Government and promptly account to his client for funds received for him from the Government or received from him in excess of Governmental or other charges payable in respect of cargo or baggage on behalf of the client; . (h) not procure or attempt to procure directly or indirectly, information from the Government records or other Government sources of any kind to which access is not granted by the proper officer; (i) not attempt to influence the conduct of any official of the Customs Station in any matter pending before such official or his subordinates by the use of threat, false accusation, duress or the offer of any special inducement or promise of advantage or by the bestowing of any gift or favour or other thing of value; (j) not refuse access to, conceal, remove or destroy the whole or any part of any book, paper or other record, relating to his transactions as a Customs Broker which is sought or may be sought by the Principal Commissioner of Customs or Commissioner of Customs, as the case may be; (k) maintain up to date records such as bill of entry, shipping bill, transhipment application, etc., all correspondence, other papers relating to his business as Customs Broker and accounts including financial transactions in an orderly and itemised manner as may be specified by the Principal Commissioner of Customs or Commissioner of Customs or the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, (l) immediately report the loss of license granted to him to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be; (m) discharge his duties as a Customs Broker with utmost speed and efficiency and without any delay; (n) verify correctness of Importer Exporter Code (IEC), number, Goods and Services Tax Identification Number (GSTIN), identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information; (o) inform any change of postal address, telephone number, e-mail etc. to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, of all Customs Stations including the concerned Deputy Commissioner or Assistant Commissioner of the Commissionerate who has granted the license immediately within two days; (p) maintain all records and accounts that are required to be maintained under these regulations and preserve for at least five years and all such records and accounts shall be made available at any time for the inspection of officers authorised for this purpose; and (q) co-operate with the Customs authorities and shall join investigations promptly in the event of an inquiry against them or their employees. 3. While Regulation 10 of CBLR, 2018 enumerates the obligations of the CBs for ascertaining identity of an Importer / Exporter, many instances have come to notice wherein the CBs are committing violations of CBLR. CBs are associating themselves with unidentified persons in filing Bills of Entry / Shipping Bills and for further clearance work etc., which is resulting in smuggling of goods viz., either prohibited or contraband. The main cause for such situation is arising out of the following reasons:- i) Non compliance of KYC norms by Customs Brokers (Circular 9/2010-Cus dated 08.04.2010) especially conditions mentioned in Para 6 of the Circular including the photographs. a. They are not aware of the actual importer. b. The premises related documents of importer are not verified. c. Not holding any authorization either from Importer or Exporter to file the Bills; and d. Not dealing with the authorized person of the Importer / Exporter and ultimately pretend to have been misguided by such unauthorized person. ii) The CBS are going beyond the call of duty and complicitly arranging IEC for unconnected persons. iii) The CB licences are being lent to other persons / legal entities enabling them to file Shipping Bills or Bills of Entry for some monetary consideration and the remaining assessment / examination related work is being carried out by some other persons not related to the CB. The LOGIN credentials allocated to the CBS are compromised and given away to unknown person. iv) The CBs are not verifying the antecedents of the persons being employed by them and are not informing to the AC/DC of Customs' (CBS) who is responsible for issuing identity cards for those employees. v) The CBs by mis-representing the facts are wrongly taking identity cards for persons who are not on their pay roll. Unauthorized office bearers of CBs without any valid identity card issued by the Customs for processing of documents relating to Bills. 4. Regulation 13 Engagement or employment of persons states that: 13 (7) A Customs Broker shall authorise only such employee who has been issued a photo identity card in Form F or Form G as the case may be to sign the declaration on the bills of entry, shipping bills, annexure thereof or any other document generated in connection with the proceedings under the Act or the rules or regulations made there under. (8) Where the Customs Broker has authorised any person employed by him in accordance with sub-regulation (7) to sign documents relating to his business on his behalf, he shall file with the Deputy Commissioner of Customs or Assistant Commissioner of Customs of each Customs Station, as the case may be, a written authority in this behalf and give prompt notice in writing if such authorisation is modified or withdrawn. (11) Any change in the persons issued a F card or G card or H card and actually engaged in the work in the Customs Station on behalf of licensee firm or company shall be communicated forthwith by the firm or the company, as the case may be, to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, and no new person other than F, 'G' or 'H' card holders, shall be allowed to work in the Customs Station as a duly authorised employee on behalf of that firm or company. (12) The Customs Broker shall exercise such supervision as may be necessary to ensure proper conduct of his employees in the transaction of business and he shall be held responsible for all acts or omissions of his employees during their employment. 5. During the past, various Offence Reports/SCNs were received from other Custom Houses/ Investigating Agencies / ICDs by this office against Customs Brokers. On perusal of the same, it is observed that in many cases of smuggling the violations committed by Customs Brokers are as below:- i) non-verification of antecedents / KYC Forms of the client; ii) Providing clearing service to third party in the name of Exporter /Importer without obtaining authorization from the actual/ concerned Exporter / Importer; iii) Sub- letting /signing of Bills to third party lending of the license; iv) Lending or misuse of Login-id to unauthorized person for a monetary consideration; v) Permitting persons who are not authorized for handling Customs documents to transact business with Customs; and vi) Mis-use of IECs 6. While CBs are entrusted with the responsibility of acting as an Agent / Broker for the importer / exporter relating to import and export clearances, the actions as mentioned above have been found to be carried out with a disregard to the Regulations and Bond executed by them. In some cases, the omissions and commissions by the CBs are such that it goes beyond reasonable doubt in confirming that they are very much involved in the offences committed under the Customs Act, 1962. It was found in some instances that such violations are helping unidentified persons to smuggle goods and remain untraceable for the investigation after committing the crime. It may also be stated that irrespective of the fact whether the CB commits these omissions either with mensrea of the act of smuggling or not, it causes lot of damage to the Revenue and hardship to the Investigating Agency. And as such to the Customs Brokers community also. The very purpose for which the CB is engaged is compromised and the sanctity is lost. 7. Therefore, it is imperative that the obligations highlighted in the above paragraphs which are very basic in nature need to be followed without any deviation/dilution. 8. It is intimated to all the Customs Brokers, Trade and Stake Holders to take all necessary precautions and scrupulously follow the CBLR Regulations /Circulars, issued from time to time, before filing Bills of Entry / Shipping Bills / process of Customs related documents, etc. Any violation in this regard, will be viewed seriously and may be circulated among members of Customs Brokers Association of Chennai. It is also requested to sensitize their members to be alert and efficiently pursing their CB work with in the manner as it is required, without falling to some carefully laid traps of unscrupulous and fraudulent importer or exporter, compromising the very steps which they are supposed to take due to illegitimate offers. (Dr. ANIL K. NIGAM) COMMISSIONER OF CUSTOMS (CHENNAI - VIII)