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TMI Blog2024 (1) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... perandi identified in this case brings out clearly the role of importer, and Shri Jamail Ahmed Shaikh, Proprietor of M/s Pemex Enterprises and Shri Nagesh Shyamsundar Malik, proprietor of M/s Nagresh Overseas, as the key players in such mis-declaration; further the appellants CB were not aware of the fraud committed by the importers or other persons. In view of the aforesaid factual position, there are no force found in the legality of the conclusion arrived at the impugned order holding that the appellants have violated the Regulations 10(d) and 10(e) ibid. The views are also concurred in the order of the Hon ble High Court of Delhi in the case of KUNAL TRAVELS (CARGO) VERSUS COMMISSIONER OF CUSTOMS (IMPORT GENERAL) NEW CUSTOMS HOUSE, IGI AIRPORT, NEW DELHI [ 2017 (3) TMI 1494 - DELHI HIGH COURT ] holding that the appellants CB is not an officer of Customs who would have an expertise to identify mis-declaration in respect of imported/export goods. Violation of Regulation 10(n) of CBLR, 2018 - HELD THAT:- In the present case, the appellants CB had obtained the KYC documents and submitted the same to the Customs Department - the appellants CB besides obtaining the requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led by the appellants CB. Customs authorities have found that there was mis-declaration of imported goods and the importers are found to be fake. The appellants, on behalf of the importer M/s Pemex Enterprises, had filed the Bill of Entry (B/E) No.8090120 dated 17.09.2018, in which the customs authorities have conducted 100% examination and found undeclared cosmetics were concealed and there was mis-declaration in terms of quantity, description etc. Further, in one another import consignment for which the appellants CB had filed the B/E No.8090119 dated 17.09.2018, for the importer M/s Nagresh Overseas, the imported goods on examination were found to be mostly electronic toys contrary to the declared description of non-electronic toys , which attract higher duty (IGST) and were non-compliant with the provisions of DGFT Notification No.44(RE-2000)/1997-2002 dated 24.11.2000. Based on the above, the jurisdictional Principal Commissioner of Customs (General), Mumbai had immediately suspended the appellants CB license vide Order No. 22/2019-20 dated 02.07.2019. After giving post decisional hearing the suspension of the CB license of the appellants was continued vide Order No.33/2019- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellants CB was aware of the fact that the importers were operating from different address, but he did not bring the same to the knowledge of customs authorities. In view of the above, the learned AR submitted that the impugned order is legally sustainable in the appeal filed by the appellants may be dismissed. 5. Heard both sides and perused the case records. We have also considered the additional written submissions given in the form of paper books by learned Advocate for the appellants as well as Authorised Representative for the Revenue. 6.1 On perusal of the records, it transpires that an investigation was conducted by CIU, JNCH both in respect of the importers M/s Pemex Enterprises and M/s Nagresh Overseas and by physically examining the imported goods. During the visit of CIU investigation team at the declared address of the importer M/s Pemex Enterprises, the local shopkeepers could not locate the address. Further, the Maharashtra State Electricity Distribution Company had provided the factual detail that the Electricity connection No. given as KYC document is mismatching with the declared billing unit address. Similarly, in respect of importer M/s Nagresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as detailed therein. 7. In order to further examine the specific Regulations which are alleged to have been violated by the appellants, we would like to examine these individually on the basis of factual matrix of the case. The relevant part of the CBLR, 2018 dealing with the obligations of the Customs Broker is extracted below: Regulation 10. Obligations of Customs Broker: - A Customs Broker shall - (d) advise his client to comply with the provisions of the Act and in case of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; xxx xxx xxx xxx (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; xxx xxx xxx xxx (n) verify correctness of Importer Exporter Code (IEC)number, Goods and Services Tax Identification Number (GSTIN), identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information; 8.1 In respect of the obligatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order holding that the appellants have violated the Regulations 10(d) and 10(e) ibid. 8.4 We also find that our above views are also concurred in the order of the Hon ble High Court of Delhi in the case of M/s Kunal Travels (Cargo) Vs. Commissioner of Customs (I G), IGI Airport, New Delhi reported in 2017 (354) E.L.T. 447 (Del.), holding that the appellants CB is not an officer of Customs who would have an expertise to identify mis-declaration in respect of imported/export goods. The relevant portion of the above order is extracted below: 12. Clause (e) of the aforesaid Regulation requires exercise of due diligence by the CHA regarding such information which he may give to his client with reference to any work related to clearance of cargo. Clause (l) requires that all documents submitted, such as bills of entry and shipping bills delivered etc. reflect the name of the importer/ exporter and the name of the CHA prominently at the top of such documents. The aforesaid clauses do not obligate the CHA to look into such information which may be made available to it from the exporter/ importer. The CHA is not an inspector to weigh the genuineness of the transaction. It is a pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eck of either the client or of the consignment. Documents prepared or filed by a CHA are on the basis of instructions/documents received from its client/importer/exporter. Furnishing of wrong or incorrect information cannot be attributed to the CHA if it was innocently filed in the belief and faith that its client has furnished correct information and veritable documents. The mis-declaration would be attributable to the client if wrong information were deliberately supplied to the CHA. Hence there could be no guilt, wrong, fault or penalty on the appellant apropos the contents of the shipping bills 9.1 We further find from the records, that the appellants have verified the existence of the importer through the certificate of Importer-Exporter Code issued by the Ministry of Commerce, DGFT indicating the name of the importer along with address, name of the proprietor; Permanent Account Number (PAN) card of the proprietor; GST Registration Certificate GST REG-06 indicating the GST Registration No. and address of the principal place of business having been verified by jurisdictional VAT/Sales Tax authorities; Aadhaar Card of the proprietor, Driving license, Ration Card etc. 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identity of his client and the functioning of his client in the declared address by using reliable, independent, authentic documents, data and information. The said guidelines provide for the list of documents that is required to be verified and that are to be obtained from the client importer/exporter. it is also provided that any two documents of among such specified documents is sufficient for fulfilling the obligation prescribed under Regulation 10(n) of CBLR, 2018. We find that in the present case, the appellants CB had obtained the KYC documents and submitted the same to the Customs Department. 9.3 We also find that in the case of M/s Perfect Cargo Logistics Vs. Commissioner of Customs (Airport General), New Delhi 2021 (376) E.L.T. 649 (Tri. - Del.), the Tribunal had decided the issue of KYC verification of the importer/exporter by the Customs broker and the requirements specified in the CBLR, 2018. The relevant paragraphs in the said order is extracted below: 34. The basic requirement of Regulation 10(n) is that the Customs Broker should verify the identity of the client and functioning of the client at the declared address by using, reliable, independent, authe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, on the factual matrix, we also find that the appellants CB besides obtaining the requisite documents should have been more careful as a prudent Customs Broker to have conducted cross verification to ascertain the genuine nature of such documents, to avoid any illegality. Thus, the appellants CB has failed to fulfill the obligations under Regulation 10(n) ibid to a limited extent as discussed above. Accordingly, we are of the considered view that to this limited extent, the appellants CB are liable for penal action under CBLR, 2018. 11. We having taken into account the various facts and evidences in the present case, also appreciate the importance of the role of Customs Broker/Custom House Agent and the timely action which could prevent the frauds being committed by unscrupulous persons/ importers/ exporters taking the gullible CBs/CHAs, by relying on the judgement of the Hon ble Supreme Court in affirming the decision of the Co-ordinate Bench of this Tribunal in the case of Commissioner of Customs Vs. K.M. Ganatra Co. in Civil Appeal No.2940 of 2008 reported in 2016 (332) E.L.T. 15 (S.C.). The relevant paragraph of the said judgement is extracted below: 15. In this re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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