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TMI Blog2023 (8) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... er the documents provided to it by the exporter. While the transaction value is decided between the exporter and importer, value for determining the duty under the Customs Act is a part of assessment. The power to assess including determining the value lies with the importer/ exporter (self-assessment) or with the proper officer (re-assessment). The Customs Broker has neither any authority nor any responsibility to assess the value of the imported goods or export goods. In all the Shipping Bills, exports were allowed by the Customs in the normal course. It is only the subsequent intelligence and investigations by the DRI which revealed the alleged over valuation of exports. The Customs Broker is neither authorized under the Act nor is obligated under the CBLR to re-determine the value of any goods. Transaction value (be it FOB, CIF or C F) is a matter of negotiation between the overseas buyer and the Indian exporter. It is the consideration which is paid or payable to the Indian exporter by the overseas buyer. The Customs Broker is a stranger to this contract and has no locus standi with respect to the transaction value - Nothing in the facts of the case show that the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCN, the Commissioner of Customs and central Excise, Jodhpur, who licenced the appellant as Customs Broker, initiated these proceedings and an SCN dated 1.2.2023 was issued to the appellant proposing action under the Customs Brokers Licensing Regulations, 2013 CBLR, 2013 . 2. In this appeal, the appellant is assailing the Order-in-Original Impugned order dated 2.5.2023 passed by the Commissioner of Customs (Preventive) Jodhpur wherein he held that the appellant had violated Regulations 11(d), 11(e) and 11(n) of CBLR, 2013 and cancelled the Customs Brokers licence issued to the appellant, forfeited its security deposit and imposed a penalty of Rs. 50,000 on it. The operative part of the impugned order is as follows: ORDER In exercise of power conferred in terms of Regulation 20(7) of CBLR, 2013 read with Regulation 18 22 of CBLR, 2013, I revoke the CB license No. 01/CHLR/R/96(PAN NO. AAAFT0172C) valid up to life time, issued by this office and forfeit of security deposit of customs Broker. I impose a penalty of Rs. 50,000/- (Rupees Fifty Thousand only) under Regulation 22 read with Regulation 20 of CBLR, 2013 upon the CB M/s Trinity International Forwarders, 22, L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel, even if the exporter had claimed ineligible drawback by inflating the value of the export goods, the appellant had no knowledge of it. It also has no mechanism or authority to verify if the export value is correct or otherwise. The appellant had to file the Shipping Bills as per the documents provided to it which it had no reason to doubt. Therefore, the charge that the appellant did not advise its client- the exporter to comply with the Act and Rules or that it did not report non-compliance is not established. 7. We have considered the submissions by both sides on this issue. The case of the Revenue is that the exporter over-invoiced exports to claim ineligible drawback. Drawback is a mechanism of reimbursing to the exporter, the taxes and duties which would have been paid or borne by the exporter on the finished goods as well as on the raw materials. Instead of calculating these taxes and duties each case, based on the average incidence of the taxes and duties on each type of goods, a drawback schedule is notified by the Government which indicates the drawback for each type of goods usually as a percentage of the Free on Board FOB value. For some goods, the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act read with Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 Import valuation Rules . The value of export goods in the Shipping Bill is determined as per Section 14 read with Customs Valuation (Determination of Value of Export Goods) Rules, 2007 Export valuation Rules . Section 14 states that for the purpose of Customs Tariff Act, 1975 (under which the rates of import and export duties are prescribed) or any other law for the time being in force, the value shall be the transaction value, i.e., the value actually paid or payable for import of the goods at the place of importation or export of the goods at the place of exportation subject to some conditions and Rules. In respect of imports, Rule 12 of the Import Valuation Rules authorizes the proper officer to reject the transaction value under certain circumstances and redetermine it based on the value of contemporaneous imports of identical goods (Rule 4), value of contemporaneous imports of similar goods (Rule 5), value arrived at through deductive method (Rule 7), etc. In cases of exports, the proper officer can, under certain circumstances, reject the transaction value under Rule 8 of the Export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hence, we find that the appellant has not violated Regulation 11(d). Regulation 11(e) 14. Regulation 11(e) of CBLR, 2013 reads as follows. 11. Obligations of Customs Broker. A Customs Broker shall (e) exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage. 15. This Regulation requires the Customs Broker to NOT impart any incorrect information to the exporter. After perusing the records and the appeal we find no allegation that the appellant, as the Customs Broker, has imparted incorrect information. The case of the Revenue is that the exporter had over-valued export goods and the appellant did not report it. Therefore, evidently, the appellant did not violate Regulation 11(e). Regulation 11(n) 16. Regulation 11(n) of CBLR, 2013 reads as follows. 11. Obligations of Customs Broker. A Customs Broker shall (n) verify antecedent, correctness of Importer Exporter Code (IEC) number, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot them verified. The Additional Commissioner of Customs SIIB(X) ACC, Mumbai sent a letter dated 18.02.2023, inter alia, stating as follows: 8. Further, it is submitted that the KYC documents received under your aforesaid letter viz., the copy of the Aadhaar Card and PAN card of Shri Uday Desai as well as the IEC certificate of M/s. Janman Lifestyles Pvt. Ltd. (IEC 0314034366) have been verified with the documents available on file records of this office. The same have been found in order. 19. The above KYC documents submitted by the appellant and verified and confirmed by the Commissionerate, leave no manner of doubt that the appellant had fully met its obligations under regulation 11(n) and had not violated it. 20. In view of the above, we answer the two issues which we framed in this appeal in paragraph 3 above as follows: a) The appellant had not violated Regulations 11(d), 11(e) or 11(n) of CBLR, 2013. b) Consequently, the cancellation of the licence of the appellant, forfeiture of the security deposit and imposition of penalty on the appellant are not sustainable and need to be set aside. 21. The appeal is allowed and the impugned order is set aside with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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