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TMI Blog2024 (8) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... ime of filing of B/Es. The facts indicate that Shri Laxmi Narayan Mishra, who had fabricated the description of the invoice in this case was actually involved in preparation of parallel fabricated invoice with incorrect description and connected violations in respect of imported goods. There are no strong grounds to hold that the appellant CB has violated the Regulation 10(a) ibid, only on the ground that they had accepted the documents indirectly from the importer through the logistics service provider. However, as the mis-declaration is apparent in the documents relating to import submitted along with the Letter of Authority given to the appellants, to the extent of mis-match in the description of the goods in MAWB and invoices, the appellants CB should have been more careful in scrutiny of the authority letter dated 28-8-2019 given to them along with import documents particularly when these were received from person other than importer who is in logistic trade, in the light of above DGFT s policy circular dated 16-9-2013. The appellants CB had declared the description of the imported goods and other details in both the B/Es for aforesaid imports as given in the invoices supplied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Principal Commissioner of Customs (General), New Custom House, Ballard Estate, Mumbai-I. 2.1 Briefly stated, the facts of the case are that the appellants herein is a Customs Broker (CB) holding a regular CB license issued by the Mumbai Customs under Regulation 7(2) of Customs Brokers Licensing Regulations (CBLR), 2018. On the basis of specific information that two import consignments of assorted dietary supplements are being attempted to be cleared by mis-declaring the description of the imported goods in the Bills of Entry (B/Es), the officers of Central Intelligence Unit of the Air Cargo Complex, Mumbai Zone-III (CIU-ACC) conducted physical examination of the imported goods covered under B/E No. 4681237, dated 28-8-2019 and B/E No. 4741606, dated 3-9-2019, under Panchanama proceedings dated 19-9-2019 and 20-9-2019. The said goods were imported by M/s. S.S. Sons, Khargar and the B/Es were filed for home consumption clearance by the appellants CB. Upon examination of the imported goods it was revealed that as against the declared description of piping fittings and machine parts dropper, heallds weaving looming machine spare parts , the actual goods that was found available were as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed on the basis of documents given by the importer; he claimed that the appellants CB cannot be held liable for verification of premises or correctness of particulars given in various statutory documents; Shri Nitin Sridharpraso Godiyal, the person who was mandated for examination of imported cargo was an employee of appellants and the intimation to that effect was given to Customs authorities, however on account of his sudden illness, Shri Laxmi Narayan Mishra, employee of M/s. Space Age Logistics had assisted in examination of the cargo and he was holding valid H card. Further, he stated that the appellants CB did not had any prior knowledge about the misdeclaration of the imported goods by the importer, for advising them against the same; they had duly verified the existence of the importer through the statutory documents in the manner prescribed under CBLR. Furthermore, he stated that based on their submissions, the inquiry authority had dropped the charges against the appellants in respect of Regulations 10(a), 10(e), 10(m) of CBLR, 2018. Thus he claimed that the appellants did not contravene these Regulations ibid. 3.2 In support of their stand, the Learned Advocate had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs Broker :- A Customs Broker shall - (a) Obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as a Customs Broker and produce such authorisation whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; (b) transact business in the Customs Station either personally or through an authorised employee duly approved by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; xx xx xx (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; (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; xx xx xx (m) discharge his duties as a Customs Broker with utmost speed and efficiency and without any delay; (n) verify correctness of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN), identity of his client and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements given by various persons during investigation of the case, it is seen that Shri Sachin S. Shinde, F cardholder and proprietor of the appellants CB had obtained the import documents for the impugned goods covered under the present imports from one Shri Laxmi Narayan Mishra, employee of M/s. Space Age Logistics and proprietor of M/s. Exim World Wide. The importer M/s. S.S. and Sons, is a proprietorship firm and Shri Hashim Mahmood Qureshi is the proprietor of the said firm; he had offered his IEC to his family friend Shri Naseer Ameer Khan, who used to handle all import related transactions. Shri Laxmi Narayan Mishra, had in his voluntary statement given under Section 108 ibid, had stated that he got the original invoice from said Shri Naseer Ameer Khan and changed the description of the goods in original invoice from pre-workout supplement to piping fittings in a cyber cafe located at Ghatkopar. 7.3 In the B/E No. 4681237, dated 28-8-2019 filed in respect of the impugned goods as piping fittings , the relevant invoice has been indicated as No. FTX2019/05, dated 28-5-2019 and the transport document i.e., Master Airway Bill as MAWB No. 15760347453, dated 23-8-2019. We find th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4741606, dated 3-9-2019, the customs officer while assessing the goods have raised a query that the importer/CB should Put up value evidence and first time import documents ; to this query, the importer/CB had submitted the previous bills of entry as above, in which loading of value upto Rs. 650/- per kg. was accepted. Accordingly, in this case too, the customs authorities had finalised the assessment on 7-9-2019. 7.4 From the above facts, it is clearly proved that in both the B/Es filed by the appellants CB on behalf of the importer, had declared the proper description of the imported goods and its value has been indicated as per the documents given to them by the importer. In fact, the various query raised by the customs officer raising any doubt in compliance, value of the goods has been satisfactorily explained and the goods have been assessed to customs duty. It is not the case of Revenue, that the description, value particulars of imported goods indicated in the B/Es were different from the one indicated in the commercial invoices submitted to the Customs at the time of filing of B/Es. The facts indicate that Shri Laxmi Narayan Mishra, who had fabricated the description of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements of Shri Badrinath and Shri Sunil Chitnis amply proves this fact. The question is, merely because the appellant procured the business through an intermediary who is not his employee, can it be said that he has sub-let or transferred the business to intermediary. The Tribunal in the case of Principal Commissioner of Customs v. Chhaganlal Mohanlal Co. Ltd. [2006 (203) E.L.T. 435 (Tri. - Mum.)], held that if the Customs clearance has been done through intermediary and business was got through intermediary, the same is not barred by the provisions of CHALR, 2004 and it cannot be stated that the appellant has sub-let or transferred his licence. In the case of Krishan Kumar Sharma v. Principal Commissioner of Customs, New Delhi reported in 2000 (122) E.L.T. 581 (Tri.), this Tribunal held that the mere fact of bills raised on the intermediary cannot be held against the CHA firm to prove that the CHA licence was sub-let or transferred. Therefore, in the light of the judgments cited above, the charge of violation of Regulation 12 is not established. As regards the violation of Regulation 13(a), the adjudicating authority himself has observed that the I have no doubt to say that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being misused by any person other than IEC holder, we are of the considered view that the responsibility of a Customs Broker is to play a crucial role in protecting the interest of Revenue and at the same time he is expected to facilitate expeditious clearance of import/export cargo by complying with all legal requirements. In the backdrop of the factual matrix of the present case, we find that there are no strong grounds to hold that the appellant CB has violated the Regulation 10(a) ibid, only on the ground that they had accepted the documents indirectly from the importer through the logistics service provider. However, as the mis-declaration is apparent in the documents relating to import submitted along with the Letter of Authority given to the appellants, to the extent of mis-match in the description of the goods in MAWB and invoices, the appellants CB should have been more careful in scrutiny of the authority letter dated 28-8-2019 given to them along with import documents particularly when these were received from person other than importer who is in logistic trade, in the light of above DGFT s policy circular dated 16-9-2013. 8.1 The Learned Principal Commissioner of Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensure that discredited individuals are not being allowed to work as H Cardholders. 8.2 From the plain reading of the above provisions of the regulations and CBIC Circular, we find that these do not place any bar on the employees of CB who could assist them. In fact, we find that proviso to Regulation 6(8) of CBLR, 2018, provide for relaxation from the requirement of knowledge of English not being made compulsory in respect of person deputed to work extensively in the docks/examination area, and the knowledge of Hindi shall be considered as desirable qualification. In the present case, Shri Nitin Sridharpraso Godiyal, employee of appellants CB and Shri Laxmi Narayan Mishra, H Cardholder have assisted the appellants CB in clearance of the goods from the examination shed/ACC. However, as the said Shri Nitin Sridharpraso Godiyal was not doing well on the date of examination on 18-9-2019, he had in turn asked Shri Laxmi Narayan Mishra to handle examination and for taking delivery of the goods on obtaining out of charge from Customs. Shri Laxmi Narayan Mishra, being a H Cardholder, though not in regular employment of the appellants, had attended the clearance work. Thus, to this extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... detected due to CIU-ACC s intelligence and preventive action. Further, any allegation of mis-declaration of imported goods in terms of its description or value could only be established, if the declaration in the Bill of entry has been different from the commercial invoice or other supporting documents. It is noticed from the factual details of the present case, that the declaration made in the Bills of Entry is the same as that is provided in the Commercial invoices, and the description declared as per invoices were fabricated by Shri Laxmi Narayan Mishra by preparing parallel set of invoices, which could not be detected even by the customs authorities at the time of assessment or at the time of clearance of the goods. In the absence of any document to prove the claim of mis-declaration of goods, it is difficult to fasten such liability on the appellants CB. 9.2 In the instant case, the mis-declaration was found by the department only on the basis of specific intelligence developed by CIU, ACC, and hence the appellants CB cannot be found fault for the reason that they did not advise their client importer to comply with the provisions of the Act. Further, the voluntary statement g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficiently, and thus she concluded that such action by the appellants is indicative of grave inefficiency in the discharge of their duties as Customs Broker and therefore they have violated Regulation 10(m) ibid. 11.2 From the plain reading of the requirements under Regulation 10(m) ibid, it is clear that there should be some grounds of inefficiency or unavoidable delay in clearance of the imported goods. We find neither, is there is any such claim of undue delay nor any demonstration of inefficiency in clearance of goods by the appellants. In respect of imported goods covered under B/E No. 4681237, dated 28-8-2019, the reply to the query of customs appraising/assessment officer was provided on 3-9-2019, import duty was paid on 5-9-2019 and out of charge was given by the Customs authorities on 18-9-2019; similarly, in respect of imported goods covered under B/E No. 4741606, dated 3-9-2019, for the query of customs appraising/assessment officer, the requisite reply was given on 7-9-2019. The above facts do not indicate any ground for delay in clearance of the goods or inefficiency in handling their duties by the appellants CB. Thus, we do not find any merits on the grounds and the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tic documents, data or information. In this regard, a detailed guideline on the list of documents to be verified and obtained from the client/customer is enclosed in the Annexure. It would also be obligatory for the client/customer to furnish to the CHA, a photograph of himself/herself in the case of an individual and those of the authorised signatory in respect of other forms of organizations such as company/trusts etc., and any two of the listed documents in the annexure : Sl. No. Form of organisation Features to be verified Documents to be obtained 1 Individual (i) Legal name and any other names used (ii) Present and Permanent address, in full, complete and correct. (i) Passport (ii) 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 de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so find that the Hon ble High Court of Delhi has held in the case of Kunal Travels (Cargo) v. Principal Commissioner of Customs (I G), IGI Airport, New Delhi reported in 2017 (354) E.L.T. 447 (Del.), the appellants CB is not an officer of Customs who would have an expertise to identify mis-declaration of goods. The relevant portion of the said judgment is extracted below : The CHA is not an inspector to weigh the genuineness of the transaction. It is a processing agent of documents with respect to clearance of goods through customs house and in that process only such authorized personnel of the CHA can enter the customs house area .. It would be far too onerous to expect the CHA to inquire into and verify the genuineness of the IE Code given to it by a client for each import/export transaction. When such code is mentioned, there is a presumption that an appropriate background check in this regard i.e. KYC etc. would have been done by the customs authorities. 12.5 From the above, we also find that the above orders of the Tribunal and higher judicial forum are in support of our considered views in this case in respect of the compliance with respect to Regulation 11(n) ibid. 13.1 Besi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... House Agent has got a definite purpose and intent. On a reading of the Regulations relating to the grant of licence to act as Custom House Agent, it is seen that while Custom House Agent should be in a position to act as agent for the transaction of any business relating to the entry or departure of conveyance or the import or export of goods at any customs station, he should also ensure that he does not act as an agent for carrying on certain illegal activities of any of the persons, who avail his services as Custom House Agent. In such circumstances, the person playing the role of Custom House Agent has got greater responsibility. The very prescription that one should be conversant with various procedures, including the offences under the Customs Act to act as a Custom House Agent would show that, while acting as Custom House Agent, he should not be a cause for violation of those provisions. A CHA cannot be permitted to misuse his position as a CHA by taking advantage of the access to the department. The grant of licence to a person to act as Custom House Agent is to some extent to assist the department with the various procedures such as scrutinising the various documents to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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