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TMI Blog2025 (1) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... rter Intelligence Unit, R& I Division, NCH, Mumbai that M/s. Tanu Trading (IEC-AMCPGS448G) had imported certain cosmetic items vide warehousing Bill of Entry No. 3673416 dated 09.12.2022, showing their intention for re-export of the goods under Section 69 of the Customs Act, 1962. However, instead of depositing the said goods in the bonded warehouse, the said goods were being diverted to local market for home consumption. The officers visited the custom bonded warehouse (NSAIU131) of M/s. Akshay Logistics where the subject imported goods were destined for deposition, but the goods were not found. Meanwhile, vide letter F. No. GEN/CB/292/2023-CBS-0/ PR COMMR-CUS-GEN-Zone-1-Mumbai dated 25.05.2023 was received forwarding an offence report dated 09.05.2023, for taking appropriate action against the appellant along with the investigation report dated 06.07.2023. Accordingly, the CB license was suspended vide order-in-original No. 36/ZR/Suspension/Policy/2023 dated 16.06.2023 under Regulation 16(1) of the CBLR, 2018. A show cause notice dated 04.09.2023 was issued to the CB and on receipt of the Inquiry report dated 28.11.2023, and vide the impugned order dated 23.02.2024, the CB licens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the appellant had any knowledge about the instant illegal diversion of the goods. 3.1 The Learned Counsel further submitted that the Commissioner has given clear finding that Dilip Shelar was H-card Holder of the CB and has attended the customs formalities however, has given adverse finding that all customs formalities were not completed by him and it has been held that one Babu Ithape has approached the dock officer for clearance of the goods. It is submitted that the instant Bill of entry was filed after obtaining Triple duty Bond with surety, duly executed by the Importer, which was handled and submitted to the bond section of the Commissionerate by Dilip Shelar, H-Card Holder. Further, the bill of entry was registered under RMS informed vide ICEGATE's email dated 12.12.2022 @ 7:05pm and no assessment and examination as per RMS was prescribed for the consignment and therefore, the goods were directly allowed for warehousing and Out of Charge was given on 13.12.2022 and after out of charge, goods were handed over to the employee of Importer at the gate of CFS Apollo. It is pertinent to mention here that CB's role was limited to only filing of the B/E and he was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation pertaining to violation of Regulation 10 (d) is completely baseless and whimsical and needs to be set-aside. 3.4 Learned counsel further contended that as regards the Regulation 10 (n) of the CBLR, 2018, the Appellant had duly verified the antecedent and correctness of IEC, KYC documents, GST and other documents of the clients from government's official websites before taking up the assignment of clearance of the goods. Further, there is no requirement of physical verification of the importer by the CB under CBLR, 2018. He further contended that neither the SCN nor the impugned order has alleged that the Appellant had the knowledge of said activity and therefore, any contravention which has occurred after the clearance of the goods cannot be attributed to the CB thus, no violation of CBLR, 2018 can be invoked in such cases. 3.5 Learned counsel further submitted that there is a finding that the appellant might have been cheated by the H-card holder, but only because there was alleged delayed response to the customs, does not form a ground for revocation of CB license, as there is no finding that the Appellant in connivance with Dilip Shelar has acted in this manner. More ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TIN), and identity of the client using reliable, independent, authentic documents, data, or information, as mandated by Regulation 10 (n). The Customs Broker's lack of physical verification of the importer and reliance on third parties for KYC documents demonstrated non-compliance with Regulation 10 (n). 5. Learned AR further contended that the Customs Broker's actions in the instant case revealed a failure to fulfill the obligations mandated under Regulations 10 (b), 10 (d), and 10 (n) of the Customs Brokers Licensing Regulations, 2018. Despite evidence of violations, the appellant attempted to defend their actions, but contradictions in statements and evidence raised doubts about the appellant's credibility and compliance. The purpose of granting a license to a customs broker is to ensure responsible and compliant conduct while facilitating import and export transactions, which the CB failed to uphold in this case. Overall, the department argues that the CB's actions amounted to serious violations of customs regulations, compromising the integrity of the customs clearance process and necessitating appropriate disciplinary action. In support of his submissions, learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly with the provisions of the Act, other Allied Acts and rules and any non-compliance would have to be reported to the Assistant/Deputy Commissioner of Customs. The impugned order notes that NoC was required from the Drug Controller and a declaration under Rule 19 of the Cosmetics Rules, 2020, which the CB did not advise his client at the time of import of the goods viz., Cosmetics. The Ld Counsel has submitted before us that the importer had been advised regarding the requirement of the NoC and it is on record that the said NoC was subsequently obtained from the Competent authority. It was further submitted that the goods had been released based on the said NoC. We find that the appellant had filed the Bill of Entry for Warehouse for re-export purpose, as is evident from the copy submitted before us. This clearly evidences that the appellant was aware that as the NoC was not available for the imported goods, hence the goods could not be cleared for home consumption. It has also been submitted before us that subsequently, the said goods were released as the NoC for all the 133 items imported vide the said Bill of Entry. Further, we take note of the fact that the said Release Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid Regulation requires the Customs Broker to verify the identity of his client, which includes the identification documents as well as the information provided by the client. 18.1. The Commissioner and the learned Tribunal have held that the Appellant failed to verify the identity of the importer firms and the antecedents of Mr. Sanjeev Maggu with whom the Appellant had dealt with and exchanged the documents for filing before the Customs Station. The Commissioner concluded that since the KYC documents provided by the importer firms were forged, an early detection by Customs Broker could have prevented the evasion of customs duty. 18.2. The Appellant has stated that he relied upon the result of verification of the original Importer Exporter Code (hereafter 'IEC'), which were mandatorily supplied on the functional address of the importer. It is stated that the IEC number was duly verified by the Appellant from the website of Directorate General of Foreign Trade (hereafter 'DGFT') and found the same to be valid. The IEC number was standing in the name of the importer firms and the physical addresses mentioned therein duly matched with the declared address furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pection of the goods they did not corroborate with what was declared in the shipping bills, cannot be deemed as mis-declaration by the CHA because the said document was filed on the basis of information provided to it by M/s. H.M. Impex, which had already been granted an IE Code by the DGFT. The grant of the IE Code presupposes a verification of facts etc. made in such application with respect to the concern or entity. If the grant of such IE Code to a non-existent entity at the address WZ-156, Madipur, New Delhi - 63 is in doubt, then for such erroneous grant of the IE Code, the appellant cannot be faulted. The IE Code is the proof of locus standi of the exporter. The CHA is not expected to do a background check of the exporter/client who approaches it for facilitation services in export and imports. Regulation 13 (e) of the CHALR 2004 requires the CHA to "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" (emphasis supplied). The CHAs due diligence is for information that he may give to its client and not necessarily to do a background check of either the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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