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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 ..... penalty and forfeiture of entire security deposit furnished by the appellants. Being aggrieved against the impugned order, the appellant filed this appeal before the Tribunal. 3.1 The brief facts of the case are that appellants had been issued with a Customs Broker (CB) license No. 11/893 granted by jurisdictional Principal Commissioner of Customs (General), Mumbai, under Regulation 7(2) ibid. An offence report dated 23.06.2019 was received from Central Intelligence Unit (CIU) of Jawaharlal Nehru Custom House, Nhava Sheva (JNCH) stating that they were investigating a case of import of toys by two importers for whom the Bills of Entry have been filed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Revenue reiterated the findings recorded in the impugned order. He stated that the import of toys is governed by the notification No.44(RE-2000) dated 12.06.2019 issued by the Director General of Foreign Trade (DGFT). There was mis-declaration of imported goods, as the physical examination of imported goods showed that mostly these were electronic toys attracting higher IGST; further undeclared cosmetics were also found in the imported goods. In this context, he stated that the appellants did not exercise due diligence, to identify and to bring the mis-declaration to the knowledge of Customs. As both the importers were non-existent, and 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conduct of the appellants as CB and their non-fulfillment of the obligations under CBLR. 6.3 In view of the above factual details, we are of the considered view that the appellants have not been involved as a customs broker in the violation of mis-declaration of description and non-declaration of details on the packages of imported goods in the aforesaid import transaction in B/E No.8090119 and No.8090120 both dated 21.02.2022. Thus, there cannot be a case for taking action against violations of CBLR, for the mis-declaration caused by the importers. Hence, the impugned order does not sustain on grounds of factual matrix of the case 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing different from the declaration made in the Bill of Entry, the same cannot be attributable to the appellants CB. 8.3 The modus operandi 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, we are unable to find force 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. 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 Regul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the IE Code, the appellant cannot be faulted. The IE Code is the proof of locus standi of the exporter. The CHA is not expected to do a background check of the exporter/client who approaches it for facilitation services in export and imports. Regulation 13(e) of the CHALR 2004 requires the CHA to: "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" (emphasis supplied). The CHAs due diligence is for information that he may give to its client and not necessarily to do a background check 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PAN card (iii) Voter's Identity card (iv) Driving licence (v) Bank account statement (vi) Ration card Note : Any two of the documents listed above, which provides client/customer information to the satisfaction of the CHA will suffice." We find that the above CBIC circular clearly explains the provision of CBLR/CHA Regulations which require the Customs Brokers to verify the antecedents, correctness of Import Export Court (IEC) Number, 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 (T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Maharashtra State Electricity Distribution Company database for the relevant electricity bill relates to some other unit at Kalyan CC sub-division, thus clearly proving that there was apparent mis-match in the documents and the appellants had not even verified the documents, the details of which is available in the public domain to confirm the genuineness of documents handled by them in respect of the impugned imports. Thus, 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 comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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