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TMI Blog2024 (12) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... s CB seeking from the importer, through their logistics intermediary M/s Ibrahim Hirani, all requisite basic documents such as commercial invoice, packing list, authority letter and other relevant documents for KYC verification in handling the imports with customs. Further, there is no case of mis-declaration with respect to the documents submitted along with the B/Es, and such misdeclaration were identified by Customs, only upon physical examination of the goods - the appellants have duly filed the bill of entry as per the documents given by the importers 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. Hon ble Supreme Court had held in the cased of NORTHERN PLASTIC LTD. VERSUS COLLECTOR OF CUSTOMS CENTRAL EXCISE [ 1998 (7) TMI 91 - SUPREME COURT ] holding that the declaration of the description of goods given correctly and fully in the Bill of Entry/classification declaration laying claim to some exemption was in the nature of a claim made on the basis of the belief entertained by the appellant and therefore, cannot be said to be a mis-declaration for the purpose of Customs Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (TECHNICAL) Shri R.K. Tomar, Advocate for the Appellants Shri Krishna Murari Azad, Authorized Representative for the Respondent ORDER This appeal has been filed by M/s Akbarali Mohemedali Mukadam, Mumbai holding Customs Broker License No. 11/112 (herein after, referred to as the appellants for short) assailing the Order-in-Original CAO No. 09/CAC/PCC(G)/SJ/CBS-Adj dated 12.05.2023(referred to as the impugned order ) passed by learned 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 erstwhile Regulation 10 of Customs House Agents Licensing Regulations, 1984 (CHALR) and now Regulation 7(2) of Customs Brokers Licensing Regulations (CBLR), 2018. In pursuance of specific intelligence received by Nhava Sheva Preventive Unit (NSPU), R I division of Principal Commissioner of Customs(Preventive), regarding customs duty evasion in import consignment covered in Container No.CLHU8380450 lying in Seabird CFS was put on hold and further investigation ware carried out. It was found that the import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al before the Tribunal. 3.1 Learned Advocate for the appellants contends that all the allegations of violation of Regulations 1(4), 10(d), 10(e), 10(n) and 13(12) of CBLR, 2018 have been countered by them. The appellants CB was getting their clients through Shri Ibrahim Hirani who was doing marketing job for them, and thus he was keeping record of payments received from the importers/ exporters. Therefore, it is submitted by him that it is incorrect to state that there was sub-letting of the CB license by the appellants CB to the said Shri Ibrahim Hirani. 3.2 Learned Advocate further submitted that the appellants CB firm had not given any wrong advice to their clients. They conducted all KYC verification through digital mode but due to COVID it was impossible for them to visit the importer personally for getting verification. Thus, he claimed that not meeting the importer personally and procuring the documents through intermediary cannot form the grounds for alleged violation of Regulations 10(e) and 10(n) ibid. 3.3 Further, learned Advocate stated that the appellants CB did not have any prior knowledge about the fact that the importer is going to mis-declare the description and qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the case records. 6.1 The issue involved herein is to decide whether the appellant Customs Broker has fulfilled all his obligations as required under CBLR, 2018or not. The specific sub-regulations which were alleged to have been violated by the appellants are Regulations 1(4), 10(d), 10(e), 10(n) and 13(12) of CBLR, 2018, and hence there are certain distinct charges framed against the appellants in the present case. We find that the Regulation 10ibid, provide for the obligations that a Customs Broker is expected to fulfill during their transaction with Customs in connection with import and/or export of goods. These regulations are extracted and given below as follows: Customs Brokers Licensing Regulations, 2018 Regulation 10. Obligations of Customs Broker: - A Customs Broker shall - (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; (n) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments given by the importers 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, as the contents inside the container was not known to the appellants CB, they could not have brought it to the notice of the Deputy Commissioner of Customs (DC) or Assistant Commissioner of Customs (AC). Thus, we are of the considered view that the violation of Regulation 10(d) ibid, as concluded in the impugned order is not supported by any facts or evidence. 7.2. Further, as the Hon ble Supreme Court had held in the cased of Northern Plastic Limited Vs. Collector of Customs Central Excise reported in 1998 (101) E.L.T. 549 (S.C.) holding that the declaration of the description of goods given correctly and fully in the Bill of Entry/classification declaration laying claim to some exemption was in the nature of a claim made on the basis of the belief entertained by the appellant and therefore, cannot be said to be a mis-declaration for the purpose of Customs Act. On the basis of our analysis as above and on the basis of above judgement of Hon ble Supreme Court, we are of the considered view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under CBLR, 2018. 9.1 We find from the records, that the appellants CB had obtained the KYC documents from the importer through their logistics agent at port of discharge through Shri Ibrahim Hirani of M/s Shams Logistics. The above verification by the appellants CB ensured that they fulfilled their responsibility for duly verifying the existence of the importer through the various documents evidencing the existence of business operation of the importer. However, the learned Principal Commissioner of Customs had concluded in the impugned order that the appellants CB never directly interacted with any representatives of the importer and thus it is clear that the appellants CB have failed to verify the identity, antecedent and address etc. of their client as they did not verify the address of their importer. Thus, he concluded that the appellants CB have not been careful and diligent in undertaking KYC verification and thus violated Regulation 10(n) ibid. 9.2 In this regard, we find that CBIC had issued instructions in implementing the KYC norms for verification of identity, existence of the importer/exporter by Customs Broker in Circular No. 9/2010-Customs dated 08.04.2010, and v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 9.5 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 10(n) ibid. 10.1 We also find that as regards the timelines to be followed in the entire process of adjudication of the suspension/revocation of CB license under CBLR, 2013/CBLR, 2018 by Customs authorities, the Hon ble High Court of Bombay has laid down certain guidelines for its interpretation in the case of Principal Commissioner of Customs (General), Mumbai Vs. Unison Clearing P Ltd., 2018 (361) E.L.T. 321. The relevant por ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the explanation offered is reasonable or reflects casual attitude on behalf of the Revenue. This is the only way how the Regulation can be made effective and worthy of its existence so as to safeguard the interest of the Customs house agent, who is in a position of the delinquent and faces an inquiry somehow similar to an inquiry in disciplinary proceedings on one hand and the revenue in the capacity of the administration on the other hand. 15. In view of the aforesaid discussion, the timelimit contained in Regulation 20 cannot be construed to be mandatory and is held to be directory. As it is already observed above that though the time line framed in the Regulation need to be rigidly applied, fairness would demand that when such time limit is crossed, the period subsequently consumed for completing the inquiry should be justified by giving reasons and the causes on account of which the timelimit was not adhered to. This would ensure that the inquiry proceedings which are initiated are completed expeditiously, are not prolonged and some checks and balances must be ensured. One step by which the unnecessary delays can be curbed is recording of reasons for the delay or non-adherence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned by law. We also find that the Customs broker has already suffered a lot, as they were out of his normal business during such period that their license was suspended. It is also noted that the livelihood of Customs broker and the employees is dependent upon the functioning of Customs broker s business. The punishment suffered by being out of Customs broker s business for long period of is more than sufficient to mitigate the case of violations or contraventions of CBLR, 2018. 10.3 From the records of the case, we find that there is definitely delay in conduct of inquiry proceedings and that too for the import transactions for which the offence was detected in February, 2021, the order of revocation of appellant s CB license has been passed on 12.05.2023. The learned Principal Commissioner explained that the delay is on account of the inquiry proceedings in which the appellants CB had taken time to give their written submissions, but such delay cannot be fatal to outcome of injury and cannot neutralize the actions of omission and commission already committed by the CB. 10.4 The prescribed time under CBLR for timely completion of inquiry proceedings right from the beginning i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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