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TMI Blog2021 (6) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... diligence by ascertaining the veracity of all information pertaining to client, the obligation to discharge duties as customs broker with utmost speed and efficiency and without any delay and the obligation to verify antecedents, correctness of importer exporter code, to identify his client and functioning of his client at the declared address were, according to the licencing authority, breached - The appellant had dealt with the beneficiary importer of the imported goods but against authorization furnished by the importer on record. It is also equally clear that the appellant, while dealing with Shri Anil Kumar Vachhar, did not appear to have evinced any interest in ascertaining the identity, or connection with the goods, of the importer on record. This is certainly not in accordance with the obligations that devolve upon a customs broker authorised to act on behalf of the importers under Customs Broker Licensing Regulations, 2013. At the same time, the existence of the importer on record not being in doubt and the role of such person vis- - vis beneficial owner of the imported goods is yet to be decided upon in adjudication proceedings, it would, therefore, be improper to procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962 is, as yet, pending for adjudication. 2. It would appear that the appellant had, on behalf of M/s Forus Enterprises, allegedly fronting for the beneficiary importer, Shri Anil Kumar Vachhar and with whom alone they had dealt, filed bill of entry for the import of parts of DTH equipment which, upon assessment, was found to be undervalued. Consequently, in the proceedings leading to the impugned order no. 31/CAC/CC(G)/PS/SBS(Adj.) dated 16th September 2020 of Principal Commissioner of Customs (General), Mumbai Zone I, the allegation that the holder of import export code (IEC) had neither been contacted by the appellant nor prescribed authorization obtained from him was held to have been established. Admittedly, the job was assigned to the appellant by the beneficiary importer and the documentation, including authorization, had been obtained only from him. The licensing authority imposed fiscal penalties and revoked the customs broker licence on the finding that the separate charges of having breached regulation no. 11(a), 11(d), 11(e), 11(m) and 11(n) of Customs Broker Licensing Regulations, 2013were proved against the appellant. 3. Learned Counsel for the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of the customs broker is apparent from the manner in which the documents were processed without any verification. He also referred to rule 12 of Foreign Trade (Regulation) Rules, 1993 prescribing the necessity of registration of the actual importer which has been breached by the appellant in consequence. Relying upon the decision of the Hon ble High Court of Madras in KV Shivaraj v. CESTAT, Chennai [2017 (346) ELT 547 (Mad.)] opining that 8. The view taken by all the three authorities below is incapable of being described as perverse finding of fact. When once the IEC is allowed to be used by someone else, the associated risks could be understood to have been well within the realm of knowledge of such an individual. In that view of the matter, we think that for the acts of lending IEC, rubber stamp and letterheads of the firm, the consequences which follow from Sections 113 and 114 of the said Act, cannot be avoided. 9. However, what still remains to be examined by us is the justification behind the adjudicating authority in imposing a penalty of ₹ 1,00,000/- on the appellant before us, while all others, including the individual who has misused the IEC o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the form of admissions in statements that were never retracted, sufficed for concluding that the customs broker had failed to discharge the obligation to obtain authorization from each importer. The obligation to advice the client to comply with the provisions of Customs Act, 1962, the obligation to exercise due diligence by ascertaining the veracity of all information pertaining to client, the obligation to discharge duties as customs broker with utmost speed and efficiency and without any delay and the obligation to verify antecedents, correctness of importer exporter code, to identify his client and functioning of his client at the declared address were, according to the licencing authority, breached. 6. On the last of the allegations, it is seen that regulation no. 11(m) does not mandate physical verification but adjures ascertainment from reliable, independent, authentic documents, data or information. We find that the records do not allege that the importer-export code (IEC) had been obtained fraudulently or that the importer on record did not exist. These were claimed to have been verified from the data made available in the public domain by the Director General of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any detrimental consequence to Revenue arising, directly or indirectly, from that breach. 7. The appellant has dealt with only one bill of entry out of the several that were taken up for investigation and included in the show cause notice issued under Customs Act, 1962. The allegation against the imports is limited to undervaluation and it is difficult for us to appreciate that the breach of regulation no. 11(a) had, in any way, contributed to suppression of the value of the goods imported against the bill of entry. It is not within the remit of the customs broker to be conversant with the negotiations on price or the manner of transference of agreed recompense and, therefore, compliance with the said obligations would not have altered the allegations leveled against the importer, whether on the beneficial owner or of that on record. 8. In view of the facts and circumstances supra, we find ourselves in agreement with the appellant that the detriments invoked against them are highly disproportionate. For not having insisted upon contact with the importer on record, revocation of licence and, that too, for first breach is, indeed, drastic. We find that the ends of justice w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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