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TMI Blog2020 (6) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... arguments given by the appellant. There is no evidence cited by the Adjudicating Authority to establish that the appellant had any pre-knowledge of the nature of cargo. The statement on which the Adjudicating Authority has relied on, has not been provided to the appellant. In view of the fact that statement has not been provided, the impugned order cannot be upheld as the charge has been confirmed on the basis of said statement - the allegation made under Regulation 10(d) of CBLR, 2018 are set-aside and the issue is remanded to the Adjudicating Authority for fresh decision. CBEC Circular 9/2010 also specifies that KYC is to be done on the basis of documents and not by physical visit of the client s premises. The impugned order holds that customs broker never tried to contact the exporters. We do not find merit in the argument that there is no such requirement under Regulation 10(n) of CBLR 2018 which requires customs broker to directly contact and in touch with the exporters. Accordingly, we are unable to uphold the invocation of Regulation 10(n) and the same are dropped. Limitation prescribed under Regulation 17 of CBLR, 2018 - HELD THAT:- A perusal of Regulation 17 clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that cargo was overvalued. April 27-28, 2017 Statement of Mr. Sagar Thakkar, authorized person of the Appellant and Mr. Manoj Kannar proprietor of forwarder - Samar Shipping was recorded by the Superintendent, SIIB, Customs House, Mundra. September 7, 2017 Show Cause Notice was issued to the appellant by the Additional Commissioner of Customs, Mundra thereby proposing to impose penalty under Section 114 and 114AA of the Customs Act. February 26, 2019 The Additional Commissioner, Mundra vide 010 imposed penalty of ₹ 20,00,000/- and ₹ 5,00,000/- under Section 114 and 114AA of the Customs Act. April 11, 2019 Principal Commissioner of Customs, Kandla vide 010 suspended the customs broker license of the Appellant with immediate effect. April 22, 2019 During post decisional hearing the Appellant filed written submissions thereby denying all allegations and observations made in the 010 dated April 11, 2019. April 30, 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant have failed to obtain authorisation from the exporters. The said regulation reads as under:- 10. Obligation 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) Learned Counsel argued that they had availed proper authorisation from all the five exporters to act as their customs broker and only after obtaining the said authorisation they filed shipping bills for export cargo on their behalf. He submits that following document were obtained:- (a) Know Your Customer (KYC) (b) Certificate of Importer Exporter Code. (c) Registration Certificate of Establishment under the Maharashtra Shops and Establishment Act, 1948. (d) Authority letter to act as Customs Broker and declaration under the Customs Act. (e) Bank verified account details of exporter (f) Photo identity card of authorized person of exporter firm/ company. It was argued by the learned Counsel that the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued that Regulation 10(d) of CBLR places onus on the customs broker but to discharge such onus, the customs broker should have knowledge of such non-compliance. Learned Counsel argued that in the instant case, they had no knowledge of non-compliance and therefore, there was no question of informing to the Customs department. Learned Counsel further argued that impugned order relies on the fact that appellant in its written submission has confirmed to the fact that appellant received manufacturer invoice describing goods as mixed chindi and awaiting instructions from Manoj Kannar and exporters instead of informing to the department. It was also argued that the statement on the basis of which the allegation has been confirmed (referred in Para 7.2 of the Notice), has not been provided to them. Learned Counsel argued the allegation made in Para 7.2 on the basis of statement which has not been supplied. The statement of Shri Sagar Thakkar was recorded on 27.04.2017 wherein he stated as follows:- Q. 12. Did you have pr-knowledge about overvaluation of goods? Ans : No. As and when cargo was carted in the CFS we have immediately informed to the exporter that we will not clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents, data or information. Learned counsel pointed out that notice alleges that appellant has not verified the antecedents, identity of exporters and functioning of his clients at declared address by using reliable, independent and authentic documents, data or information particularly when the exporters had not approached the customs broker directly for export work. The impugned order alleges that Shri Sagar Thakkar received documents from Shri Manoj Kannar and was not in direct touch with exporters. Learned Counsel pointed out that appellant received the following documents from all the five exporters:- (i) Know Your Customer (KYC) (ii) Certificate of Importer Exporter Code. (iii) Registration Certificate of Establishment under the Maharashtra Shops and Establishment Act, 1948. (iv) Authority letter to act as Customs Broker and declaration under the Customs Act. (v) Bank verified account details of exporter (vi) Photo identity card of authorized person of exporter firm/ company. Learned Counsel pointed out that documents such as registration certificate under the Maharashtra Shops and Establishment Act, 1948 and bank verified account details of exporter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of export cargo was conducted by PO, SSIB Customs House Mundra on 10 March 2017. The Customs authority Mundra conducted market enquiries for valuation of seized cargo on 21 March 2017. The statements of Shri Sagar Thakkar and Shri Manoj Kannar was recorded on 27 April 2017 and 28 April 2017 respectively. The show cause notice dated 09 September 2017 was issued to the appellant proposing to impose penalty under Section 114 and 114AA of the Customs Act. The revocation of customs broker license of the appellant has been proposed vide notice dated 21 May 2019. Learned Counsel argued that department was aware about the said export transaction since March 2017 however, proceedings under the Notice for violation of provisions of the CBLR was issued on 21 May 2019, which is beyond the limitation. Learned Counsel pointed out that proceedings for invocation of CBLR had to be invoked starting from 90 days from the date of receipt of offence report. Learned Counsel relied on the decision in the case of Harjeet Singh Johar vs. CC 2018 (361) RLT 731 (Del.) wherein the Hon ble Delhi High Court observed as follows:- 8 . The core issue which arises in the present writ petition is regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction of the said Commissioner of Customs or anywhere else which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station. 18. The above regulation has only 3 ingredients namely (i) failure to comply with the bond conditions; (ii) failure to comply with the regulations; and (iii) a misconduct, for any of which, the license can be revoked. Since the above regulation does not use the expression offence report , we have to presume that a report indicating the availability of any one of the above 3 ingredients should be construed as an offence report. Consequently, the date of knowledge gained by the Commissioner, by means of any communication, be it show cause notice or order-in-original, has to be construed as the date of receipt of the offence report. Otherwise, a report about anyone of the above 3 ingredients can be sent at any time, even after five years or ten years. 19. The Regulations not only fail to prescribe what an offence report is and how it is to be sent, but they do not also prescribe the person competent to send it. In such circumstances, the interpretation sought to be given by the petitioner is more acceptable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 days as prescribed under the provisions of CBLR 2018. He also argued that since there was no violation by the appellant, no penalty under Regulation 18 of the CBLR can be imposed. 9. Learned Authorised Representative relies on the impugned order. He pointed out that appellant was never in touch with the real exporters either personally or through phone. Learned Authorised Representative relies on the decision of the Tribunal in the case of SK Logistics vs. CC (General), New Delhi 2016 (331) ELT 486 (Tri. Del.). Learned Authorised Representative further pointed out that authorisation was not produced before the Additional Commissioner but was produced during adjudication under the Customs Act and when the proceedings under CBLR, 2018 started. Learned Authorised Representative further pointed out that Principal Commissioner, Kandla was not aware what was happening at Customs Mundra. The appellant has not submitted Form ‗C which was necessary. 10. We have gone through the rival submissions. As regards the issue relates to failure to obtain authorisation from the exporters, the impugned order relies on the fact that there is no post/ courier received or evidence of rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority letter to act as Customs Broker and declaration under the Customs Act. (v) Bank verified account details of exporter (vi) Photo identity card of authorized person of exporter firm/ company. At least two of these documents issued by statutory authority and other by the bank contain address of all the exporters. CBEC Circular 9/2010 also specifies that KYC is to be done on the basis of documents and not by physical visit of the client s premises. The impugned order holds that customs broker never tried to contact the exporters. We do not find merit in the argument that there is no such requirement under Regulation 10(n) of CBLR 2018 which requires customs broker to directly contact and in touch with the exporters. Accordingly, we are unable to uphold the invocation of Regulation 10(n) and the same are dropped. 10.4 The next issue relates to limitation prescribed under Regulation 17 of CBLR, 2018, which reads as under :- 17. Procedure for revoking license or imposing penalty.- (1) The Principal Commissioner or Commissioner of Customs shall issue a notice in writing to the Customs Broker within a period of ninety days from the date of receipt of an offence ..... 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