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TMI Blog2023 (7) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... lding himself out to be exporter and only in relation to any goods between entry for export and actual export. Inevitably, this always did, and continues to, exclude any transactions which precedes the filing of shipping bills under section 50 of the Customs Act, 1962 and restricted to the owner or any person holding himself out to be an exporter. Subsequently, by amendment of 2017, the term encompassed beneficial owners too. Consequently, any person can be an exporter and any person may act on behalf of the exporter and, thereby, become a client of customs brokers. What we see here are several loose threads - loose threads that do not curtain off the threshold ingress but, at the same time, these loose threads have been twisted together to form a noose that does not hold - the finding of the licensing authority that obligation under regulation 1(4), 10(d) and 10(n) of Customs Brokers Licensing Regulations, 2018 have been violated by the appellant, cannot be concurred upon. The appellant had obtained, even if not directly, necessary documentation of the exporter on record and there is no evidence that the exporters did not exist at the given addresses. There is also no evidence tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regulation 10(d), 10(n) and regulation 1(4) of Customs Brokers Licensing Regulations, 2018 had been breached even as the charge of violation of regulation 10(a), 10(c) and 10(m) of Customs Brokers Licensing Regulations, 2018 were dropped. 3. We find it surprising that despite the proceedings initiated for every possible detriment under the Regulations on the back of several charges of breach of obligation having been confirmed with three of the charges held as not proved, no allowance was made by the licencing authority for the dilution of the actual breach.. Be that as it may, and without going into the issue of proportionality of penalties, the finding that led to conviction that the licence should be revoked is taken up for evaluation. 4. Regulation 1(4) requires the issued licence to be held by the licencee and not to be sold or otherwise transferred. It is contended on behalf of the licensing authority that the customs broker admitted to having procured business through an intermediary and that the payments were received from the said person which the licensing authority found difficult to lend credence as procurement of business should have been reflected by a reverse flow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Customs, New Delhi reported in 2000 (122) ELT 581 (Tri.), this Tribunal held that the mere fact of bills raised on the intermediary cannot be held against the CHA firm to prove that the CHA licence was sub-let or transferred. Therefore, in the light of the judgments cited above, the charge of violation of Regulation 12 is not established. As regards the violation of Regulation 13(a), the adjudicating authority himself has observed that the "I have no doubt to say that the CHA might have obtained the authorisation but it is surely not from the importer. Therefore, the authorisation submitted is not a valid one". This finding is based on a presumption. Obtaining an authorisation from the importer does not mean that the same should be obtained directly; so long as the concerned import documents were signed by the importer, it amounts to authorisation by the importer and, therefore, it cannot be said that there has been a violation of Regulation 13(a). As regards the last charge, i.e. the appellant did not transact the business through his employee but through Shri Sunil Chitnis thereby violating the provisions of Regulation 13(b), there is some merit in the argument. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t immediately from the Government. 45. To sum up, the entire system of exports is based heavily on trust and facilitation and very less emphasis on due diligence which enhances trade facilitation but also makes it vulnerable to misuse by fraudsters. The IEC is issued by DGFT based only on an online application and a few easy to obtain documents. So, one cannot rule out the possibility of an IEC being issued without the person even operating its business from the address. The IEC forms the foundation for the entire system of controls and, in turn, is the basis for issue of various licences and scrips by the DGFT and is also the basis for Customs allowing exports. In view of the customs RMS letting 80% to 95% of the exports without either assessing the documents or examining the records, there is a very high probability of any fraudster successfully exporting the goods (or even empty containers) and claiming the export incentives and profiting from it. The export promotion schemes are not treated as expenditure but are classified as 'Revenue Foregone' in the budget. The annual impact of these export promotion schemes is about Rs. 70,000 crores as can be seen from the table in the bud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Hon'ble High Court of Patna in Bhaskar Logistic Services Pvt Ltd v. Union of India [2016 (340) ELT 17 (Pat.)] appears to relate to the facilitation of bill of entry for a person other than the actual importer. That is not the case in the present instance where the papers were duly verified and there is no allegation that the customer record of the transacting exporters was bogus. The facilitation of the alleged offence arose from the allegedly fictitious supply chain to the exporter which is beyond the normal remit of obligations devolving on customs brokers. 9. It has been alleged that it would have been impossible to countenance the claim of the customs broker to have complied with regulation 10(d) of Customs Brokers Licensing Regulations, 2018 which prescribes that the client shall be advised by the customs broker to comply with all the provisions of the Customs Act, 1962 and, in the event of breach, report such to the Deputy Commissioner of Customs. It appears that this allegation is established on the premise that the appellant had no contact with the exporter and, therefore, could not have rendered advice. 10. In similar disputes, we have had occasion to take note tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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