9911796707
TMI Blog2021 (11) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Customs, Tuticorin but it also operated in Chennai and Mumbai Commissionerates under Form C procedure. Customs Brokers licensed by one Customs House can operate in other Customs Houses under this procedure. The appellant filed 33 shipping bills in the name of "M/s. Sunrise Enterprises, Ghaziabad" to export "Ratchering spanner set and water saving aerator foam flow" declaring abnormally high price allegedly to claim excessive IGST refund. The CIU of Mumbai Customs detained the goods, recorded the statements of Shri Harichandra Pandurang Kadam, G-card holder of the appellant on June 4, 2019, June 13, 2019 and December 23, 2019. They also recorded the statement of Shri A. Prabhu, partner of appellant on December 23, 2019. b) The G-card holder, Shri Kadam, also held the power of attorney to act on behalf of the appellant in Mumbai. In his statement, he admitted that they had not obtained Know Your Customer [KYC] documents from the exporter. Instead, one Shri Inder Prakash Kohli of M/s. Prakash International who approached them had provided PAN, Aadhar, GSTIN and bank details of the exporter M/s. Sunrise Enterprises, Ghaziabad. After the data pertaining to the shipping bills was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Kadam, their G Card holder, employee had acted against their instructions was not accepted, and it was found that the appellant violated Regulation 10(d). (ii) Regulation 10(d) mandates the Customs Broker to 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, bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be. In this case, "Ratchering spanner set" was overvalued 20 times and the "water saving aerator foam flow" was overvalued 8 times. The appellant had never seen the goods and accepted whatever was indicated in the export invoice. It was held that Customs Broker has failed to suitably advise the exporter against such gross over invoicing. (iii) Regulation 10(k) requires the Customs Broker to maintain up to date records such as bill of entry, shipping bill, transshipment application and correspondence, other papers relating to his business as Customs Broker and accounts including financial transactions in an orderly and itemized manner as may be specified by the Principal Commissioner of Customs or Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce is reposed in a Customs House Agent and any misuse of such position by the CHA will have far-reaching consequences. He also relied upon the order of the Tribunal in M/s. Thakkar Shipping Agency vs. Collector [1994 (69) ELT 90 (Tri)] in which it was held that CHA is under obligation to comply with certain requirements and if it does not comply with that, he could as well be alleged to have mis-conducted himself. He further held that in this case G Card holder Shri Harichandra Pandurang Kadam is an authorized signatory of the appellant. As per Regulation 13(12) of CBLR, 2018, the appellant has to exercise such supervision as may be necessary to ensure proper conduct of its employees in transaction of business and is responsible for all of their acts or omissions. Hence, M/s. Prabhu Shipping Systems is vicariously liable for the acts of its employees. 6. In view of the above, it is held in the impugned order that the allegations and charges leveled against M/s. Prabhu Shipping Systems in the show cause notice dated March 13, 2020 for the contravention of provisions of Regulations 10(b), 10(d), 10(k), 10(n) and 13(12) of CBLR, 2018 stand proved. Aggrieved, this appeal is filed bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms [(I&G) CDJ 2014 DHC 807 High Court of Delhi dated 14.3.2014] 2. M/s. Jai Ambe Logistics vs Commissioner of Customs [CESTAT Mumbai dated 19.11.2014] 9. Learned Authorized Representative for the department supported the impugned order and submitted that it calls for no interference. She relies on the following decisions: 1. N T Rama Rao & Co. vs Commissioner of Customs, Chennai VIII [2020 (371) ELT 789(Tri-Chennai)] in which revocation of the licence of the Customs Broker was upheld on the ground that it had not conducted the due diligence of the exporters as required. 2. Sriaanshu Logistics vs Commissioner of Customs [2019 (369) ELT 1431 (Tr-Del)] in which the appellant sub-let its licence to some other person and had not obtained any authorization from the client and fraud was committed. Relying on the judgment of the Supreme Court in Commissioner of Customs vs KM Ganatra and Co.[ 2016 (332) ELT 15 (SC)] , the revocation of the licence of the Customs Broker was upheld. 3. Dhakane & Co. vs Commissioner of Customs (General), NCH, Mumbai [2015(317) ELT 56 (Tri- Mumbai)] of the Tribunal upheld by the High Court of Bombay [2018 (361) ELT A 67 (Bom.)]. In this case, rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nyone else. In K.M. Ganatra, Supreme Court held as follows: 15. In this regard, Ms. Mohana, learned senior counsel for the appellant, has placed reliance on the decision in Noble Agency v. Commissioner of Customs, Mumbai [2002 (142) E.L.T. 84 (Tri. - Mumbai)] wherein a Division Bench of the CEGAT, West Zonal Bench, Mumbai has observed :- "The CHA occupies a very important position in the Customs House. The Customs procedures are complicated. The importers have to deal with a multiplicity of agencies viz. carriers, custodians like BPT as well as the Customs. The importer would find it impossible to clear his goods through these agencies without wasting valuable energy and time. The CHA is supposed to safeguard the interests of both the importers and the Customs. A lot of trust is kept in CHA by the importers/exporters as well as by the Government Agencies. To ensure appropriate discharge of such trust, the relevant regulations are framed. Regulation 14 of the CHA Licensing Regulations lists out obligations of the CHA. Any contravention of such obligations even without intent would be sufficient to invite upon the CHA the punishment listed in the Regulations...." We approve the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant firm stated that he did not know about the exporter as its Mumbai office handles the matters pertaining to its operations there. Therefore, neither Shri Prabhu, the partner of the appellant, nor Shri Kadam, the employee and power of attorney holder of the appellant, knew the exporter in whose name the Shipping Bills were filed. The least a Customs Broker is expected to do is to know the importer/exporter on whose behalf he was filing the Bills of Entry or Shipping Bill. As the appellant has not till date produced any documents to show that it had obtained the KYC documents, we have no hesitation in this factual matrix to hold that the appellant has not maintained its records and thereby violated Regulation 10(k). In Shri Kamakshy Agencies, the High Court has held as follows: "The grant of licence to a person to act as Custom House Agent is to some extent to assist the Department with the various procedures such as scrutinising the various documents to be presented in the course of transaction of business for entry and exit of conveyance or the import or export of the goods. In such circumstances, great confidence is reposed in a Custom House Agent. Any misuse of such positio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the Applicant. The Reference Case is disposed of accordingly." (emphasis supplied) 17. Regulation 10 (n) requires a Customs Broker to verify the correctness of the Importer Exporter Code number, Goods and service tax identification number, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. In this case, admittedly the appellant had done nothing except simply accepting whatever documents were produced by Mr. Kohli and thereafter leaving the verification/ correctness of the goods to Mr. Kohli who is neither exporter nor Customs Broker or employee of the appellant. Neither the appellant nor its employee Shri Kadam knew about the exporter. Even the KYC documents said to have been received through Mr. Kohli were not produced either before the lower authorities or before us. While it is not expected that Customs Broker should personally go and verify the location and address of each importer/exporter, it is expected to at least obtain KYC documents and conduct the necessary due diligence to check the exporter is at least genuine. Undisputedly, in this case, Shri Kadam representing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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