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TMI Blog2024 (2) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... n in this appeal is simply whether the appellant had obtained the authorization from the importer firm, as was required as per Regulation 10(a) or not - Had the appellant approached M/s. Angel Corporation, the importer and obtained the documents from them, or at least, checked with M/s. Angel Corporation even through a phone call or email, it would have known in no time that the consignment was not imported at all by M/s. Angel Corporation and the entire racket of smuggling of the psychotropic substance would have come to light - there are no hesitation in holding that the appellant had failed to obtain authorization from M/s. Angel Corporation, the importer and thereby violated its obligation under Regulation 10(a). Contravention of Regulation 10(d) - failure to advise Angel Corporation to comply with the provisions of the Act and allied Acts, but it has not even contacted the client - HELD THAT:- Regulation 10(d) requires that 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, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) - the Commissioner was correct in holding in the impugned order that the appellant had violated Regulations 10(a), 10(d) and 10(n). A Customs Broker is expected to behave and operate responsibly and he cannot simply file benami Bills of Entry which, in this case, resulted in import of a psychotropic substance. Filing of Benami Bills of Entry, if condoned, can have severe consequences. Customs procedures are based on trust and selective controls based on risk assessment. If Customs Brokers start filing Benami Bills of Entry, in the name of any importer, it can open the floodgates for free import of any contraband including, drugs, arms and explosives. Since examination is on selective basis, chances are that the contraband may not be detected (especially if mis-declared as a low risk import good) - filing Benami Bills of Entry is a serious violation and calls for toughest action. There are no reason to interfere with the impugned order and uphold it. The appeal is, accordingly, rejected. - MR. DILIP GUPTA, PRESIDENT AND MR. P V SUBBA RAO, MEMBER ( TECHNICAL) Present for the Appellant : Shri Priyadarshi Manish and Shri Anmol Arya, Advocates Present for the Respondent: Shri Rakesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the goods imported, duty payable, etc. and after Customs clears the goods for home consumption, the importer receives the goods from the custodian of the air cargo complex showing the Bill of Entry (evidencing that the consignment was cleared by the Customs) and the Airway bill (evidencing his title to the goods). A gate pass is also issued so that the security guard at the exit gate of the air cargo complex knows that the consignment can be taken out. 6. If the individual consignments are small, usually an aggregator collects them and packs them onto a larger pallet and gives them to the airline. In such a case, the airline issues the Master Airway Bill in the name of the aggregator who, in turn, issues house airway bills for each of the consignments indicating the names of the exporter and importer in each case. These are similar to the Master Bill of Lading and House Bills of Lading issued when several small consignments (less than container load or LCL) are exported and imported by sea. 7. In this case, although the term Master Airway Bill was used (somewhat inaccurately) in the impugned order, a perusal of the air way bill in question shows that there was only an airway b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter following due process, the Commissioner passed the impugned order holding that the appellant had violated regulations 10(a), 10(d), 10(e), 10(m) and 10(n) of CBLR 2018 and revoked its licence, forfeited security deposit of Rs. 5,00,000/- and imposed penalty amount of Rs. 50,000 under Regulation 17 of CBLR 2018. Submissions on behalf of the appellant 13. Learned counsel for the appellant made the following submissions. 13.1 The Commissioner has, in the impugned order at paragraph 21.1, recorded that the appellant had admitted that he did not have the KYC documents in possession which is factually incorrect because when the appellant was summoned on 4.2.2018, he had submitted all the KYC documents which, were, however, not acknowledged by the department; 13.2 The statements of the appellant recorded on 2.2.2018 and 4.2.2018 were not in his handwriting but were typed and the appellant was simply asked to sign and he did so. Therefore, the allegation that the appellant had violated Regulation 10(a) is not correct; 13.3 In paragraph 21.2 of the impugned order, the Commissioner recorded that the appellant did not know about the whereabouts of Shri Samir kumar @ Rajaji, the importer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The questions before us are whether the appellant had violated Regulations 10(a), 10(d), 10(e), 10(m) and 10 (n) and if so, whether revocation of licence, forfeiture of security deposit and imposition of penalty under Regulation 17 in the impugned order can be sustained. These Regulations read as follows: 1. Short title, commencement and application. (1) These regulations may be called the Customs Brokers Licensing Regulations, 2018. (2) They shall come into force on the date of publication in the Official Gazette. (3) These regulations shall apply to, a Customs Broker who has been licensed and such other persons who have been employed or engaged by a licensed Customs Broker under these regulations or the Customs House Agents Licensing Regulations, 1984 or the Customs House Agents Licensing Regulations, 2004 or the Customs Brokers Licensing Regulations, 2013. (4) Every license granted or renewed under these regulations shall be deemed to have been granted or renewed in favour of the licensee, and no license shall be sold or otherwise transferred. 10. Obligations of Customs Broker. A Customs Broker shall (a) obtain an authorisation from each of the companies, firms or individuals by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case, investigations revealed that M/s. Angel corporation had nothing to do with the imports and Shri Tarkeshwar Dubey was the master mind of the operation which he undertook for some Somalians. The Airway Bill issued by the airline showed the goods as Dry Khat but Shri Dubey changed the description of the goods in the Airway Bill and sent them to the appellant who filed the Bills of Entry with wrong description of the goods. There is nothing on record to show that the appellant was involved in the smuggling of Dry Khat or profited from it. However, the question in this appeal is simply whether the appellant had obtained the authorization from the importer firm, as was required as per Regulation 10(a) or not. 21. Had the appellant approached M/s. Angel Corporation, the importer and obtained the documents from them, or at least, checked with M/s. Angel Corporation even through a phone call or email, it would have known in no time that the consignment was not imported at all by M/s. Angel Corporation and the entire racket of smuggling of the psychotropic substance would have come to light. In this factual matrix, we have no hesitation in holding that the appellant had failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent at the declared address by using reliable, independent, authentic documents, data or information. 29. The submission of the learned counsel for the appellant is that the appellant had no obligation to physically verify the identity of the importer and whether it was operating at the declared address. It would suffice if it obtains at least two KYC documents which it did. Therefore, according to him, there was no violation of Regulation 10(n) at all. 30. The appellant would have been correct if it had obtained the documents from the importer M/s. Angel Corporation. Obtaining the documents from some other person and filing benami Bills of Entry to clear mis-declared cargo, which in this case, happens to be a psychotropic substance banned under NDPS Act cannot, in our view, constitute fulfilment of Regulation 10(n). 31. To sum up, we find that the Commissioner was correct in holding in the impugned order that the appellant had violated Regulations 10(a), 10(d) and 10(n). 32. The next question is if in the factual matrix of this case, if the revocation of the Customs Brokers licence of the appellant, forfeiture of its security deposit and imposition of a penalty of Rs. 50,000/- is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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