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TMI Blog2024 (8) TMI 1350X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.2022 was received from National Customs Targeting Centre (NCTC), informing the Customs Central Intelligence Unit (CIU) of the Jawaharlal Nehru Customs House (JNCH) that goods imported by M/s Giriraj Corporation (IEC AAFPP 0369P) vide into bond Bill of Entry (B/E/) No. 1016547 dated 14.09.2022 is likely to be cleared from the bonded premises at M/s Arshiya Ltd., Free Trade Warehousing Zone (FTWZ) vide ex-bond B/E No.2024008 dated 07.10.2022 for DTA clearance through container No. ZCSU 7510665, through the appellants CB involving gross mis-declaration of the imported goods. In pursuance of such alert, the CIU of JNCH officers conducted examination of the said imported goods after obtaining necessary permission from the Development Commissioner of Arshiya, FTWZ. During the examination of said imported goods, CIU of JNCH officers found that there is gross mis-declaration of the quantity, description and nature of the goods with an intent to evade the applicable customs duty. The modus operandi is that importer/appellants CB had declared different type of fabric in the B/E, wherein one type of fabric attract customs duty on weight basis and the other type attracting customs duty on un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, a report was submitted on 23.08.2023 concluding that all charges framed against the appellants have been proved. Accordingly, the Principal Commissioner of Customs (General), Mumbai, being the licensing authority had passed the impugned order dated 19.10.2023 under Regulations 14, 17(7) and 18 ibid, for revoking CB License of the appellants, for forfeiture of entire amount of security deposit and for imposition of penalty of Rs.50,000/- on the appellants CB. Feeling aggrieved with the impugned order, the appellants have preferred this appeal before the Tribunal. 3.1. Learned Advocate for the appellants contends that both the allegations of violation against Regulations 10(d) and 10(e) of CBLR, 2018 have been countered by them in the appeal papers filed by them. At the outset, learned Advocate submitted that the show-cause notice dated 09.03.2023 has been issued under CBLR, 2018 after the expiry of 90 days as the alleged offence occurred on 18.10.2022 and the offence report was later issued. The Inquiry Officer had conducted enquiry on 08.04.2023 and heard the representative of the appellants. However, no Inquiry Report was issued within the mandatory period of 90 days from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants have failed to exercise due diligence to ascertain the correctness of the information that they were imparting to their client (importer) under Regulation 10(e) ibid, learned Advocate submitted that the role of the Customs Broker is to file the bill of entry/shipping bill based on the documents given to them by the Importer/Exporter. A Customs Broker is not expected to scrutinize or verify the genuineness of the details and documents given by the concerned importer or exporter. In the present case, he stated that the goods were declared in the DTA bills of entry as per the instructions of the importers and the value of the goods also was declared as per the invoice issued by the importer. Therefore, he stated that the allegations raised on the violation of 10(e) of CBLR, has no legs to stand, in the absence of the any documentary evidence. He further submitted that the Inquiry Officer had stated in fifth sub-paragraph to paragraph No. 7.2 of the Inquiry Report that "based on examination and testing of the samples by the Textile Committee, correct description of the goods along with the classification and quantity found during the examination, it is clear that the importers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order viewed that the timelines specified in CBLR are directory in nature and not a mandatory factor. Thus, he submitted that the impugned order is sustainable. 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. The issue involved herein is to decide whether the appellant Customs Broker has fulfilled all his obligations as required under CBLR, 2018 or not. The specific sub-regulations which were violated by the appellants are Regulations 10(d) and 10(e) ibid, and hence there are two distinct charges framed against the appellants. The immediate suspension of appellants CB license under Regulation 16(1) of ibid was issued vide Order No. 73/2022- 23-CBS dated 27.01.2023; and after grant of post-decisional hearing, such suspension was continued vide Order No. 79/2022-23 dated 28.02.2023. Further, the department had issued show cause notice No.40/2022-23 dated 09.03.2023 for initiating inquiry proceedings under CBLR. Furthermore, the Principal Commissioner of Customs (General) after tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x-bond B/E No.2024008 dated 07.10.2022 filed by the appellants CB in respect of the importer M/s Giriraj Corporation (IEC AAFPP 0369P) for DTA clearance through container No. ZCSU 7510665. These goods have been earlier imported through filing an into bond Bill of Entry (B/E/) No. 1016547 dated 14.09.2022 and was stored in Arshia FTWZ. The examination conducted by CIU of JNCH officers established that such mis-declaration of imported goods were found in description, quantity of the imported goods in a manner that would facilitate evasion of customs duty. 7.3 Further, such a mis-declaration was noticed in respect of rest of the sixteen other consignments relating to three importers from the same Arshia FTWZ facility, and the same was not brought to the notice of either the supplier or the customs department prior to their clearance for domestic consumption. Furthermore, there is no document or any evidence produced either by the importers or appellant CB, for their claim regarding wrong shipment prior to interception of the aforesaid consignments by the CIU of JNCH officers. Hence, the reasoning given by the importers and appellants CB that the mis-declaration of the imported goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain service activities for and on its behalf and the Agent is willing to be appointed as the Principal's non-exclusive agent, in India, for providing various service activities stated in Annexure - 2 ("Service Activities") out of the service activities enumerated in Annexure-1 ("Agent Services"). xxxx xxxx xxxx 4.6. Declaration in respect of Specified Goods: ..... In the event of any non-declaration or wrong or improper or incorrect or insufficient or mis-declaration of documents or mis-description in respect of any goods, the Principal shall be solely liable/responsible for any consequences, action, liability etc. and Agent shall not be liable in any manner for the same in any manner or in any capacity for such acts of the Principal. The Principal shall be liable to indemnify the Agent against all and every loss that may arise to the Agent on that account. 5. Prohibited Goods Lewd, obscene, pornographic materials or goods with any surrogate description and other items prohibited and banned in India shall not be offered and or accepted for storage. All liabilities arising out of any nondeclaration of mis-declaration of such goods shall be only to the account of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Z co-developer along with the authority executed by three importers, clearly provides that such an arrangement is to facilitate the business of all the concerned parties. A number of value-added services, right from obtaining the imported goods from the port to the FTWZ, including all requisite services to enable such imported goods be made ready for its clearance to domestic market or for any export, is being undertaken by the appellants CB or through their agent. The specific clause of the agreement provides for entire responsibility in respect of any misdeclaration on the part of the appellants CB, as the principal, in terms of such an agreement dated 16.07.2022. Hence, the argument placed by the learned Advocate that the appellants only provided customs clearance facility and allied services cannot be accepted as valid in the absence of any contrary evidence, inasmuch as the above tri party agreement clearly provides the scope of the various services provided therein and the responsibility is solely vested on the appellants CB. 7.6 Further, it is also on record in the inquiry report dated 23.08.2023 and at paragraph 13.1 of the impugned order dated 19.10.2023, that the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceeding under CBLR, 2018 for which the adjudicating authority is required to give specific findings on the basis of inquiry proceedings conducted as per Regulation 17 and 18 ibid. Further, with respect of the packing lists containing the correct description, quantity etc., the appellants CB did not impart any specific information to the importers, rather it is the case that such information was provided by the importers to the appellants. Thus, it is not feasible to sustain this charge on the appellants CB, that they did not exercise due diligence to impart correct information to their clients on the basis of an adjudication done in different proceedings. Therefore, we are of the view that conclusion arrived at by the Principal Commissioner of Customs (General) is without any basis of documents or facts, and the impugned order with respect to Regulation 10(e) ibid, and therefore it is not sustainable. 8.3 We find that the Hon'ble High Court of Delhi had held in the case of Kunal Travels (Cargo) Vs. Principal Commissioner of Customs (I&G), IGI Airport, New Delhi reported in 2017 (354) E.L.T. 447 (Del.), that the appellants CB is not an officer of Customs who would have an exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importers have to deal with a multiplicity of agencies viz. carriers, custodians like BPT as well as the Customs. The importer would find it impossible to clear his goods through these agencies without wasting valuable energy and time. The CHA is supposed to safeguard the interests of both the importers and the Customs. A lot of trust is kept in CHA by the importers/exporters as well as by the Government Agencies. To ensure appropriate discharge of such trust, the relevant regulations are framed. Regulation 14 of the CHA Licensing Regulations lists out obligations of the CHA. Any contravention of such obligations even without intent would be sufficient to invite upon the CHA the punishment listed in the Regulations....." We approve the aforesaid observations of the CEGAT, West Zonal Bench, Mumbai and unhesitatingly hold that this misconduct has to be seriously viewed." In view of the above discussions and on the basis of the judgement of the Hon'ble Supreme Court in the case of K.M. Ganatra (supra), we find that the appellants could have been proactive in fulfilling their obligation as Customs Broker for exercising due diligence, when the correct packing list providing detail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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