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TMI Blog2024 (5) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... li, he tallied the same and finding them to be true processed the clearance of the consignment. Moreover, the G-card holder had acquired knowledge about the past antecedents of the importer where the earlier consignments through other CHAs were cleared and therefore believed the importer to be genuine. Verifying the earlier track record of the importer was a valid step towards discharge of his obligation under the regulations. Reliance is placed on Perfect Cargo Logistics Vs. C.C (Airport General), New Delhi [ 2020 (12) TMI 649 - CESTAT NEW DELHI] , where it was observed that the appellant did obtain two documents and neither the Circular nor the Annexures require any physical verification of the premises. It is not the case of the Department that the documents obtained were forged. Thus, it is not a case where the CB had not obtained the requisite documents or that he did not verify the said documents in discharge of his obligations under the regulations. We are of the opinion that the appellant has carried out proper due diligence as required under Regulation 10(n) by obtaining all the documents and verifying the same from the originals. Thus the obligation on the part of the CB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MEMBER (TECHNICAL) Shri Rahul Krishna, Advocate for the appellant Shri Rajesh Singh, Authorised Representative for the respondent ORDER M/s Ambe Freights Pvt. Ltd. [The appellant] Customs Broker [CB] is aggrieved by the revocation of the Customs Broker License (valid upto 27.01.2031), forfeiture of security deposit and imposition of penalty of Rs. 50,000/- by the Order-in Original No. 01/ZR/Policy dated 17.01.2023 passed by the Commissioner of Customs. 2. Shri Rattan Singh Bisht, the Director and the F Card Holder of the appellant firm had employed Shri Sushil Gautam as G card holder. In March 2022, Shri Sushil Gautam filed six bills of entry on behalf of M/s. GIGA Export Services, New Delhi [Importer]. On filing of the bill of entries, customs alert was issued leading to examination of the containers whereby the goods were found to be mis-declared and consequently seized. By Letter dated 17.05.2022 from Customs (Preventive), it was found that the firm did not exist at the registered address and the IEC was issued to the firm on the basis of fake PAN. Statement of Shri Sushil Gautam and Shri Rattan Singh Bisht were recorded on 29.03.2022 and 9.05.2022, and the relevant paras thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as a acceptance of the IEC of M/s.GIGA Export Services to be used by Shri Mahesh Ramji Bhanushali. I have been shown a KYC documents in the name of M/s.GIGA Export Services which I confirm was given to me by Shri Mahesh Ramji Bhanushali and I put my signatures on the same. On being further asked that why I did not bring it to the knowledge of Shri Rattan Singh Bisht, F-Card of CHA Firm, I state that I was about to tell our CHA about the filing of Bill of Entry but after getting the news of Customs alert on the same, I got afraid and had not told CHA. I further state that I gets a salary of Rs.18,000/- per month from our CHA company and along with the salary I also gets some incentive per container. I further state that my wife is in critical medical emergency as per both the kidney got fail and I am to take her to hospital every two days for dialysis. I was in the thought that I can earn more incentives in the order of 14 containers, I accept the order instantly and I am hiding nothing in this statement. On being asked , I state that I do not have any knowledge about the mis-declaration of the goods in the above said Bill of Entry before the examination conducted by Customs. On b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o say that I do not know anything about the Bill of Entries or importer as Shri Sushil Gautam our G-Card holder has filed these papers from his IDs and I did not get any payment for the same. Further, statement of Shri Rattan Singh Bisht dated 09.05.2022:- I further state that Shri Sushil Gautam,G-Card has filed the above said six Bills of Entry by his own ID (Icegatesushilgautam 12 ande-mail ID [email protected]) and has an independent dongle for digital signature, wherein the mobile number and ID of G-Card is registered and the OTP and messages for filing the Bills of Entry must be received on his ID. I further state that on faith, I have provided him the dongle and IDs for filing the papers on my behalf. On being asked that as the goods mentioned in the above said Bills of Entry were totally mis-declared and the valuation of the misdeclared goods were done by Government Empanelled Valuer/CE, which arrives at Rs.3.65 Crores approx., in this regard, I state that as I did not know about the same and Shri Sushil Gautam G-Card or Shri Mahesh Ramji Bhanushali, beneficiary owner of the goods may better comment on it. On being asked, I state that I have regularly asked my G-card holde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GSTIN, there is an extensive requirement on the part of the person applying for the same to make available number of documents issued by the Government authorities. iii) the appellant is not liable for any misdeclaration of the goods or its valuation which was on the part of the importer and it was not possible for the CB to have detected or prevented undervaluation in imports. iv) the punishment awarded by way of revocation of the CB license, forfeiture of entire security deposit and penalty of Rs.50,000 was disproportionate to the alleged offence. v) the impugned order is a non-speaking order and has not considered the submissions made by the appellant and the decisions relied on in support thereof. 5. Shri Rajesh Singh, the learned Authorised Representative for the Revenue reiterated the findings of the Adjudicating Authority and submitted that :- Statement dated 09.05.2022 of Shri Sushil Gautam, G Card and Shri Rattan Singh Bisht, F-Card holder of Customs Broke company was recorded where he stated that he did not verified the KYC and address of the importer firm. Further, Shri Rattan Singh Bisht F-card holder stated that he had not verified the KYC and address of the importer f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 10(n) and the Circulars, we find that the appellant in the present case had obtained the copy of the IEC, GSTIN, PAN card , Aadhaar card and other documents like notarised rent agreement executed between one Harish Gulshan and the proprietor of the importer firm namely, Dhirender Kumar. All these documents show the address of the importer firm. As admitted by G-card holder in his statement, on the basis of the original documents produced by Shri Mahesh Ramji Bhanushali, he tallied the same and finding them to be true processed the clearance of the consignment. Moreover, the G-card holder had acquired knowledge about the past antecedents of the importer where the earlier consignments through other CHAs were cleared and therefore believed the importer to be genuine. Verifying the earlier track record of the importer was a valid step towards discharge of his obligation under the regulations. Reliance is placed on Perfect Cargo Logistics Vs. C.C (Airport General), New Delhi - 2021 (276) ELT 649 (T-Del.), where it was observed that the appellant did obtain two documents and neither the Circular nor the Annexures require any physical verification of the premises. It is not the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icers . If the verification reports are true and none of the exporters existed at their premises, the irresistible conclusion is that all these officers of various departments have been either extremely careless or were operating under flawed systems which allowed documents to be issued to non-existing businesses. 21. We find that Regulation 10(n) requires the Customs Broker to 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. This responsibility does not extend to physically going to the premises of each of the exporters to ensure that they are functioning at the premises. When a Government officer issues a certificate or registration with an address to an exporter, the Customs Broker cannot be faulted for trusting the certificates so issued. It has been held by the High Court of Delhi in the case of Kunal Travels - 8 that the CHA is not an inspector to weigh the genuineness of the transaction. It is a processing agent of documents with respect of clearance of goods thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments, data or information d) Verify the functioning of the client at the declared address using reliable, independent, authentic documents, data or information 26. Of the above, (a) and (b) require verification of the documents which are issued by the Government departments. The IEC number is issued by the Director General of Foreign Trade and the GSTIN is issued by the GST officers under the Central Board of Indirect Taxes and Customs of the Government of India or under the Governments of State or Union territory. The question which arises is has the Customs Broker to satisfy himself that these documents or their copies given by the client were indeed issued by the concerned government officers or does it mean that the Customs Broker has to ensure that the officers have correctly issued these documents. In our considered view, Regulation 10(n) does not place an obligation on the Customs Broker to oversee and ensure the correctness of the actions by the Government officers. Therefore, the verification of documents part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thentic: a) documents; b) data; or c) information 29 . Any of the three methods can be employed by the Customs Broker to establish the identity of his client. It is not necessary that it has to only collect information or launch an investigation. So long as it can find some documents which are independent, reliable and authentic to establish the identity of his client, this obligation is fulfilled. Documents such as GSTIN, IEC and PAN card issued etc., certainly qualify as such documents. However, these are not the only documents the Customs Broker could obtain; documents issued by any other officer of the Government or even private parties (so long as they qualify as independent, reliable and authentic) could meet this requirement. While obtaining documents is probably the easiest way of fulfilling this obligation, the Customs Broker can also, as an alternative, fulfill this obligation by obtaining data or information. In the factual matrix of this case, we are fully satisfied that the appellant has fulfilled this part of the obligation under Regulation 10(n). 30 . The fourth and the last obligation under Regulation 10(n) requires the Customs Broker to verify the functioning of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervations are as follows: 7. This Court is of the opinion that the impugned order is justified in the facts and circumstances of the case. The reference to the verification of antecedents and correctness of Importer Exporter Code (IEC) Number and the identity of the concerned exporter/importer, in the opinion of this Court is to be read in the context of the CHA s duty as a mere agent rather than as a Revenue official who is empowered to investigate and enquire into the veracity of the statement made orally or in a document. If one interprets Regulation 13(o) reasonably in the light of what the CHA is expected to do, in the normal course, the duty cast is merely to satisfy itself as to whether the importer or exporter in fact is reflected in the list of the authorized exporters or importers and possesses the Importer Exporter Code (IEC) Number. As to whether in reality, such exporters in the given case exist or have shifted or are irregular in their dealings in any manner (in relation to the particular transaction of export), can hardly be the subject matter of due diligence expected of such agent unless there are any factors which ought to have alerted it to make further inquiry. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CB is responsible. To hold the CB liable for such mis-declaration and undervaluation by the importer, it is necessary to ascertain whether the appellant had any knowledge or in any manner colluded with the importer. The Revenue has not produced any evidence which could connect the appellant with the alleged offence. The facts of the case do not reveal any intention or mens-rea on the part of the CB to act fraudulently. We are, therefore, of the considered view that the appellant cannot be held liable for any mis-declaration of the goods. The allegations of mis-declaration of valuation has been dealt by the Tribunal in M/s. Trinity International Forwarders Vs. Commissioner of Customs (Preventive) [Final Order No.50978/2023 dated 02.08.2023] , where the observations have been as under: - 11. Thus, 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 (selfassessment) or with the proper officer (re-assessment). The Customs Broker has neither any authority nor any responsibility to assess the value of the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the impugned order is bad and unsustainable since it is not a speaking order as neither the submissions made nor the decision cited have been considered. The impugned order has been passed on complete non-application of mind as no reasons have been given by the learned Commissioner. We find from the impugned order that the learned Commissioner has merely quoted the findings of the enquiry officer and the reply made by the appellant and there is no discussion as to whether contraventions are justified in the facts of the case. The impugned order is therefore bad and unsustainable. 17. Having taken the view that the appellant cannot be fastened the liability of not discharging the obligation under Regulation 10(n) of CBLR and also for mis-declaration/undervaluation in view of the facts of the present case and the judicial pronouncements, we may now examine the imposition of consequential punishment since we have upheld the contravention of Regulation 13(12) by the appellant. It has been repeatedly observed that the revocation of license is a serious punishment affecting the livelihood of a person for all times to come and therefore only in extreme circumstances such serious puni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty. 18. In the present case, the CB was not aware of the entire transaction, but on the other hand, he failed to monitor the functioning of his employee and enabled him to operate independently by providing the dongle to him, he acted negligently. The act of negligence, in itself is not so grave so as to justify the revocation of license which is extremely harsh and unjustified in the given circumstances when the license of the appellant was suspended on 04.07.2022 and since then he is deprived of his livelihood. We therefore, set aside the revocation of the CB license, however uphold the forfeiture of security deposit and imposition of penalty. 19. Before parting with the said order, we would like to take note of the order-in-original dated 29.12.2023 relating to the present bill of entries and findings recorded revealed that Shri Mahesh Bhanushali was the master mind in importing the restricted goods and the sole beneficial owner of M/s. GIGA Export Services. He knowingly submitted false declaration in the bill of entries, authorisation letter, documents used in creating fake firm for the purpose of smuggling of impugned goods, which were restricted items and required BIS cert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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