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TMI Blog2024 (10) TMI 687X X X X Extracts X X X X X X X X Extracts X X X X ..... mporter, in respect of whom the importer here fulfilled all the responsibility. Thus, the CB complied with the obligations as per Regulation 10(n) and thereby acted with due diligence. Consequently, there is no contravention of the said provisions. Further, from the records of the case, it appears that CB provided the mobile numbers of Ashok Kumar, his wife and son, and also the residential address, Card number and also provided necessary assistance, which enabled the Investigating Authority to trace out Shri Ashok Kumar. The fact that the consignment contained E-Cigarettes revealing mis-declaration of goods was promptly informed by the CB to the departmental officers. The Investigating Authorities were able to examine Dr. Rajesh Kumar and the CB several times. All this is sufficient to show that the CB duly cooperated with the department. Once there is no violation of the provisions of Regulation 10(n), there is no justification to impose any punishment under the provisions of CBLR. It is highly improper to impose a burden on the CB to verify, who is the actual beneficiary in a transaction. The CB cannot be expected to act as an investigating agency and go beyond his obligations o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir Customs Broker License No.R-23/DEL/CUS/2021, forfeiture of security deposit, and imposition of a penalty under CBLR, 2018. The Inquiry Officer in his report dated 22.11.2023 concluded that the CB had failed to conduct due diligence regarding the actual beneficiary of the consignment. The Inquiry Officer found that the CB, despite knowing that Shri Ashok Kumar was the actual beneficiary of the consignment, did not obtain proper authorization or KYC documentation for him. The CB only dealt with Shri Ashok Kumar and failed to verify his credentials, which was a violation of Regulation 10(n) of CBLR, 2018. 5. The Adjudicating Authority by the impugned order concluded that although the CB had completed the KYC verification for the importer (M/s.Aparna Overseas), they failed to take proper steps to verify the identity and authorization of Shri Ashok Kumar, who was acting as the beneficiary of the consignment. The case highlights the failure of the Customs Broker to fulfil their obligation under Regulation 10(n) of CBLR, 2018, by not verifying the beneficiary s credentials. However, considering the cooperation by the CB during the investigation and other mitigating factors, the penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Broker shall (n) 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. 10. Perusal of the aforesaid provisions show that the obligation on the Customs Broker is to verify the correctness of the IEC number, GSTIN and the identity of his client and functioning of his client at the declared address. Both the inquiry officer and the Adjudicating Authority had recorded the finding that the CB has obtained all the KYC documents of Shri Arun Goel, proprietor of M/s. Aparna Overseas (importer). Even in the show cause notice, it has been noted that the CB had produced the KYC documents along with authorisation from the importer. It has also come on record that the CB contacted the importer and made inquiry about their IEC and KYC details and also verified their address. The provisions of Regulation 10(n) imposes the obligation on the CB only qua their client, which in the present case is the importer, in respect of whom the importer here fulfilled all the responsibility. Thus, the CB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rter is not in dispute or it is not the case where the importer is absconding and the fact that the CB was sincere at every stage in cooperating with the Investigating Agency, there is no justification for imposing penalty on the CB. 13. The other aspect which needs to be appreciated, as discussed by the Adjudicating Authority is quoted below : 23.7 I notice that the CB in his statement dated 04.02.2023 in response to the query Who is the actual beneficiary of this smuggling of E-Cigarette? stated I have been contacted by Shri Ashok Kumar only and as he was concerned with the clearance of the goods covered under Bill of Entry No.3742746 dated 14.12.2022 then in my opinion he is the actual beneficiary of the goods imported on the strength of IEC of M/s. Aparna Overseas. The facts of the case reveal that the proprietor of Aparna Overseas sub-let his IEC to one Dr. Rajesh Mishra who further lent Rs.8 lakhs to Ashok Kumar for import of dates. According to the said Dr. Mishra, he had given the said amount to Ashok for import of dates and not for import of PP regrind or e-cigarettes. Thus, as per the investigations, it was Dr. Mishra who had made the requisite investment in this consignm ..... 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