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TMI Blog2020 (10) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... o force in the arguments of the appellant that Shri Sudhir Kr. Jha was their own employee when all facts of the case show otherwise. Evidently, the appellant has transferred his licence or sublet it to allow unlicensed Shri Sudhir Kr. Jha and his firm M/s.U.S. Clearing Agency to clear exports and imports. Not only with respect to this consignment, but the appellant also had no records of the previous consignments exported in the name of the same exporter where the shipping bills were filed indicating the appellant as the Customs Broker. The totality of these circumstances would show that the appellant has indeed sublet his licence to Shri Sudhir Kr. Jha of M/s.U.S. Clearing Agency. In terms of Regulation 11(b) of CBLR, 2013, the appellant has to transact business at the Customs station whether directly or through an approved employee. In this case neither appellant had transacted the business directly nor through their employees, but had sublet their licence to another person. Therefore Regulation 11(b) has been violated - In this case we do not find that Shri Sudhir Kr. Jha was the employee of the appellant at all. If he was an employee he should have been paid a salary by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the period of validity of such licence; (b) the form of the licence and the fees payable therefor; (c) the qualifications of persons who may apply for a licence and the qualifications of persons to be employed by a licensee to assist him in his work as a customs broker; (d) the manner of conducting the examination; (e) the restrictions and conditions (including the furnishing of security by the licensee) subject to which a licence may be granted; (f) the circumstances in which a licence may be suspended or revoked; and (g) the appeals, if any, against an order of suspension or revocation of a licence, and the period within which such appeal may be filed. Exercising the powers conferred under section 146(2), the Central Board of Customs and Excise (the Board) issued Customs Brokers Licensing Regulations, 2013. Prior to 2013, Custom House Agents used to be licensed whose responsibilities were similar to that of the Customs Brokers. Those who were already licensed as Custom House Agents under the earlier regulations continued as Customs Brokers under the new Regulations. 3. In Customs operations, the Customs Broker plays a very vital role. He acts as an inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Commissioner of Customs; (k) maintain upto date records such as bill of entry, shipping bill, transhipment application, etc. and all correspondence and other papers relating to his business as Customs Broker and also accounts including financial transactions in an orderly and itemised manner as may be specified by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; and keep them current; (l) immediately r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestigations revealed that three other consignments in the name of the same exporter with similar declarations were exported on the shipping bills filed by the appellant, but the appellant had no record whatsoever of these exports in their export register. 8. Shri Sudhir Kr. Jha, after several summons appeared before the DRI and gave his statement under section 108 of the Customs Act, 1962. He said that he was the proprietor of M/s.U.S. Clearing Agency, who did not have a Customs Broker Licence and therefore was using the Customs Broker Licence of others. For the previous two and a half years they have been using the licence of the appellant for imports and exports and were paying ₹ 8,000/- per month to Shri Somnath Sarkar. He had given all the documents to his employee Shri Bidyanand Jha including export invoice, packing list, ARE-1 etc. in the name of M/s.Srijita Export, based on which the shipping bill was filed. He admitted that all these documents were fake documents. 9. Thus, it was found that the appellant had sub-let their licence to Shri Sudhir Kr. Jha of M/s.U.S. Clearing Agency, who filed the shipping bill for export of sanitary ware in the name of M/s.Srij ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment. In fact, he gave a statement that they will be available with Shri Jha to whom they have sub-let their licence. It is not in dispute that the container which was supposed to have carried sanitary ware had Red Sanders in it. 14. Subsequent enquiry and investigation led the officers to Shri Jha who had documents on the basis of which the shipping bill was prepared. This shows that the entire Customs work in the case was not handled by the appellant, but by Shri Jha of M/s.U.S. Clearing Agency. 15. Shri Jha has corroborated the statement of Shri Sarkar that they do not have a Customs Brokers Licence and have been using the licence of the appellant in return paying an amount of ₹ 8,000/- per month. Further, there were previous consignments also exported in the name of the same exporter where the shipping bills were filed in the name of the appellant, but the appellant had no records of such exports and only Shri Jha did. All these facts go to prove that the appellant had sublet/ transferred his licence to Shri Jha for processing exports in clear violation of Regulation 10 of CBLR, 2013. 16. He would also submit that in the present case, the exporter is not in pict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Agency had the documents and Shri Bidyanand Jha, who the appellant claimed to be the temporary employee was the one, who processed the consignment in the port and through Customs. 21. Ld. Departmental Representative would, therefore, urge that there is no force in the claim of the appellant and the same needs to be rejected. 22. We have considered the submissions of both the sides and perused the appeal records. There is no dispute regarding the legal provisions. The Customs Brokers Licensing Regulations, 2013, do not permit the appellant to sub-let their licence. They have to conduct their business directly through their own employees. They are also required to verify the identity of the exporter. They are also required to guide the exporter. This legal position is not in dispute. 23. The dispute is with regard to the facts of the case. It is not in dispute that there was an attempt to smuggle Red Sanders in the impugned consignment and that shipping bill in respect of these consignments was filed in the name of the appellant. During investigation, the appellant had no documents pertaining to the export in their possession. In fact, in the first statement given by Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. Regulation 11(d) requires the appellant to advise the clients to comply with the provisions of the Act and in case of noncompliance bring the matter to the notice of the Deputy Commissioner of Customs/Assistant Commissioner of Customs. In this case the appellant had no information at all about the export of the consignment in the name of the exporter, let alone advising him to follow the provisions of the law. In terms of section 11(n), the appellant was required to verify not only the correctness of the IEC, but also his antecedents, identity, declared address etc. using reliable, independent, authentic document data or information. The appellant s claim now, is that they have verified the IEC from the DGFT website. The IEC number can be verified by anybody on the DGFT website. It is not a substantive compliance of the requirement under Regulation 11(n) of CBLR, 2013. In fact, when the investigation was in progress, the appellant did not even know about the exporter and his consignment. Regulation 17(9) of the CBLR, 2013 places the responsibility for acts and omissions of employees of the Customs Broker upon them. In this case we do not find that Shri Sudhir Kr. Jha was the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Commissioner of Customs (Airport Administration), Customs House Another (Writ Petition No.14810 (W) of 2016 has held that the time limit in Regulation 20 has to be construed as directory and not mandatory. Paras 48 and 49 of this judgement are reproduced:- 48. The learned Judge also quoted a paragraph from a decision of the Madras High Court itself reported in 2015 (318) E.L.T. 83 (Mad.) (Hyundai Motors India Ltd. v. Union of India), wherein the learned Judge observed: Another simple test to determine whether a time limit stipulated in a rule is directory or mandatory, is to see whether there is any indication in the Rule itself about the consequences of non compliance with the same. If a statutory provision contains a prescription and also stipulates the consequences of non compliance with the condition, it would normally be taken to be mandatory. If the consequences of non compliance are not indicated, then, the provision has to be seen only as directory. 49. What follows from the above is that a consequence of not doing a particular act, if provided in the statute, would in most cases be determinative. Viewed in the light thereof, the relevant regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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