9911796707
TMI Blog2020 (1) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... ess by using reliable, independent, authentic document, data information. It is on record that the appellant has obtained all the records required for the verification of KYC documents of M/s Kamal imports at the time of import of their first consignment and on receipt of KYC documents, the appellant has also conducted verification of the address of the importer from KYC details and which was found to be in existence at their declared premises. As per Regulation 11 of the CBLR, 2013 there is no requirement of physical verification of registered premises of importer. The verification is only required to be done on the basis of documents which was done by the appellant, and is not disputed. An identical issue has also been dealt with by Hon ble Delhi High Court in case of COMMISSIONER OF CUSTOMS VERSUS HIM LOGISTICS PVT. LTD. [ 2017 (1) TMI 747 - DELHI HIGH COURT] , where it is held that the CHA required to verify KYC norm, as per the documents submitted to them only. Thus, the customs house agent/customs broker is required to verify the antecedent of importer and based on the existence of IFC code and documents submitted to the CHA and not the basis of physical verification of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice in terms of Regulation 11 of the Customs Broker Licensing Regulation, 2013 (CBLR 2013 in short), so as to revoke their license and also for imposition of penalty on them under Regulation 18 thereof, for their failure to comply with the provisions of CBLR and for the mis-conduct on their part. In the show cause notice, the charges were made as per para 11 & 12 which is reproduced as under: "11. It appears that the noticee had deliberately filed a wrong declaration without due diligence and verification. As the Noticee herself admitted the fact that she had not met sh. Kamal and the KYC documents were not received directly from Sh. Kamal. The Noticee was not able to locate the importer or give any clue about his whereabouts, thus confirming that the Noticee had not verified the KYC documents of the importer and connived with the importer in the instant illegal import of goods with the intention to earn huge profits thereby duping the ex-chequer. Thus, the Noticee have failed to discharge their duties as a Customs broker as warranted under CBLR, 2013. 12 From the above facts and circumstances of the case it appears that the Noticee had not discharged her statutory du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h. Manish Chaudhary, Sh Gaurav Ahuja and Sh. Arun Kumar i.e. persons alleged to be invoked in the illegal imports, but nothing incriminating or related to imports by M/s Kamal imports was recovered. Thus, the DRI has not been able to adduce any evidence to prove that the Noticee has connived with the importer in the instant illegal import. Conclusion:- From the above I conclude that the act of the Noticee invoices negligence on her part, but there does not appear any deliberation or any connivance on the part of Noticee and charges are not proved." 5. Subsequently, the Commissioner forwarded the enquiry report to the appellant. The reply on the enquiry report was filed by the appellant denying all the charges. However, Ld. Commissioner vide impugned order revoked the appellant's CHA license besides imposing a penalty of ₹ 50,000/- in terms of Regulation 18, 20 and also 22 of CBLR, 2013). Being aggrieved by the impugned order, the appellant is before us in the appeal. 6. The Ld. advocate on behalf of the appellants submits as that: (i) That the impugned order is vitiated by non application of minds by the Commissioner while revoking the appellant's license in terms of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner have accepted that there is no Connivance on the part of the appellant with the importer and hence it cannot be considered as negligence or non indulgence. Reliance was placed on the decision of Hon'ble Supreme in the case of Union of India Vs. J. Ahmed, AIR 1979 SC 1022. 8. That Ld. Commissioner has also failed to appreciate that the appellant has been operating as CHA since 2012 till revocation of license in September, 2018 and during that period has got cleared many consignments with unblemish record and therefore the mala fide or dishonesty motive cannot be attributed on them. 9. In view of the above, it was submitted that the order passed by the Ld. Commissioner is contrary to the provisions of CBLR, 2013 and accordingly prayed for setting aside the impugned order. 10. On behalf of Revenue ld. authorized representative reiterated the findings contained in the impugned order. He further submitted that in this case the appellant had been involved in the clearance of cargo which was ultimately found to be mis declared and grossly undervalued and hence failed to advise importer to correctly declare the description and the value of the imported consignments. Not only that, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the Customs Act and to verify antecedent of importer/exporter and IFC code no., identify his client and there at the declared address by using reliable, independent, authentic document, data information. It is on record that the appellant has obtained all the records required for the verification of KYC documents of M/s Kamal imports at the time of import of their first consignment and on receipt of KYC documents, the appellant has also conducted verification of the address of the importer from KYC details and which was found to be in existence at their declared premises. We find that as per Regulation 11 of the CBLR, 2013 there is no requirement of physical verification of registered premises of importer. The verification is only required to be done on the basis of documents which was done by the appellant, and is not disputed. The similar issue has come up for consideration before this Tribunal in case of M/s Him Logistics Pvt. Ltd. Vs. Commissioner Of Cus., New Delhi - 2016 (338) E.L.T. 725 (Tri. - Del.), wherein para 7 & 8 as under: 7. We find that the main focus of allegation against the appellant which resulted in the revocation of licence is their failure to verif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, the appellant is liable to penalty. The said findings of the Commissioner stands contested by drawing our attention to the fact that authorization was available in the file and the appellant has followed the 'Know Your Customer norms' by verifying correctness of IEC Code identity of the clients and finding the clients from the declared addresses by using reliable authentic documents. Merely, because the exporters have not come forward and the Revenue has not able to trace them, by itself cannot be held to be a reason for concluding the mens rea against the CHA or to upheld the charge of abetment or collusion with the exporters. Ld. Advocate submits that in fact, all the relevant details of the exporters are still available in the website and the findings of the Commissioner are liable to be set aside. Having gone through the impugned order, we find that the main reason for the adjudicating authority to impose penalty on the said CHA is that, he has failed to follow the provisions of CHA Regulations, 2013 and they have not adhered to the requirements and thus, are guilty of filing the shipping bills, in utter disregard to the provisions, placed on them by the Regulations. If t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following the above decision, imposition of penalty of ₹ 5 lakhs on the appellant is not justified. Accordingly, we set aside the same. The Hon'ble Delhi High Court in case of Kunal Travels Vs. C.C. (I & G), IGI Airport, new Delhi - 2017 (354) E.L.T. 447 (Del.) has held as under:- 12. Clause (e) of the aforesaid Regulation requires exercise of due diligence by the CHA regarding such information which he may give to his client with reference to any work related to clearance of cargo. Clause (I) requires that all documents submitted, such as bills of entry and shipping bills delivered etc. reflect the name of the importer/exporter and the name of the CHA prominently at the top of such documents. The aforesaid clauses do not obligate the CHA to look into such information which may be made available to it from the exporter/importer. 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 and in that the IE Code of the exporter M/s. H.M. Impex was mentioned in the shipping bills, this itself reflects that before the grant of said IE Code, the background check of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more, the inquiry report revealed that there was no delay in processing the documents by the appellant under Regulation 13(n). 14. Any act to defraud presupposes the intention to obtain something fraudulently. In the present case, the appellant (through its proprietor) has all along contended that the documents were filed unauthorized by a person of the consignment; it objects to the very filing of the two shipping bills by either Mr. Katoch or any person authorized on its behalf, hence there cannot be a presumption of its deliberate act/intention to defraud. There is no evidence of active facilitation of clearance of the consignment through customs by the appellant, hence, no mens rea can be inferred to defraud the government for obtaining duty drawback through a fraudulent transaction. Consequently, the appellant cannot be faulted or punished in the manner it has been. 15. In these circumstances, the revocation of the appellant's CHA license is unjustified and is accordingly, set aside. The revocation of license which is in operation since 2005 i.e. almost 12 years, is itself a severe punishment and could also serve as a reprimand to the CHA to conduct its affairs with more a ..... 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