TMI Blog2020 (1) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... tained all the records required for the verification of KYC documents of M/s Kamal imports at the time of import of their first consignment and on receipt of KYC documents, the appellant has also conducted verification of the address of the importer from KYC details and which was found to be in existence at their declared premises. As per Regulation 11 of the CBLR, 2013 there is no requirement of physical verification of registered premises of importer. The verification is only required to be done on the basis of documents which was done by the appellant, and is not disputed. An identical issue has also been dealt with by Hon ble Delhi High Court in case of COMMISSIONER OF CUSTOMS VERSUS HIM LOGISTICS PVT. LTD. [ 2017 (1) TMI 747 - DELHI HIGH COURT] , where it is held that the CHA required to verify KYC norm, as per the documents submitted to them only. Thus, the customs house agent/customs broker is required to verify the antecedent of importer and based on the existence of IFC code and documents submitted to the CHA and not the basis of physical verification of the premises of the appellant, IE Code required to be verified from the DGFT site and other related documents such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the respondent commissioner also issued a show cause notice in terms of Regulation 11 of the Customs Broker Licensing Regulation, 2013 (CBLR 2013 in short), so as to revoke their license and also for imposition of penalty on them under Regulation 18 thereof, for their failure to comply with the provisions of CBLR and for the mis-conduct on their part. In the show cause notice, the charges were made as per para 11 12 which is reproduced as under: 11. It appears that the noticee had deliberately filed a wrong declaration without due diligence and verification. As the Noticee herself admitted the fact that she had not met sh. Kamal and the KYC documents were not received directly from Sh. Kamal. The Noticee was not able to locate the importer or give any clue about his whereabouts, thus confirming that the Noticee had not verified the KYC documents of the importer and connived with the importer in the instant illegal import of goods with the intention to earn huge profits thereby duping the ex-chequer. Thus, the Noticee have failed to discharge their duties as a Customs broker as warranted under CBLR, 2013. 12 From the above facts and circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t DRI during investigations has conducted searches at the residence of the Noticess (Customs Broker) as well as residential addresses of Sh. Manish Chaudhary, Sh Gaurav Ahuja and Sh. Arun Kumar i.e. persons alleged to be invoked in the illegal imports, but nothing incriminating or related to imports by M/s Kamal imports was recovered. Thus, the DRI has not been able to adduce any evidence to prove that the Noticee has connived with the importer in the instant illegal import. Conclusion:- From the above I conclude that the act of the Noticee invoices negligence on her part, but there does not appear any deliberation or any connivance on the part of Noticee and charges are not proved. 5. Subsequently, the Commissioner forwarded the enquiry report to the appellant. The reply on the enquiry report was filed by the appellant denying all the charges. However, Ld. Commissioner vide impugned order revoked the appellant s CHA license besides imposing a penalty of ₹ 50,000/- in terms of Regulation 18, 20 and also 22 of CBLR, 2013). Being aggrieved by the impugned order, the appellant is before us in the appeal. 6. The Ld. advocate on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al such as Commissioner of Customs Vs. Yogesh Kumar 2017 (349) E.L.T. 12 (Del.), Shiv Khurana Vs. Commissioner of Customs, Final Order No. C/A/ 55914/2016-CU(DB). 7. That enquiry officer and the Ld. Commissioner have accepted that there is no Connivance on the part of the appellant with the importer and hence it cannot be considered as negligence or non indulgence. Reliance was placed on the decision of Hon ble Supreme in the case of Union of India Vs. J. Ahmed, AIR 1979 SC 1022. 8. That Ld. Commissioner has also failed to appreciate that the appellant has been operating as CHA since 2012 till revocation of license in September, 2018 and during that period has got cleared many consignments with unblemish record and therefore the mala fide or dishonesty motive cannot be attributed on them. 9. In view of the above, it was submitted that the order passed by the Ld. Commissioner is contrary to the provisions of CBLR, 2013 and accordingly prayed for setting aside the impugned order. 10. On behalf of Revenue ld. authorized representative reiterated the findings contained in the impugned order. He further submitted that in this case th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... baggage. 12. The show cause notice issued to the appellant does not explain as to which of the specific provisions of Section 11E has been violated by the appellant. However, we find that in the show cause notice it is mentioned that the appellant failed in its duty of customs broker by not advising his client to comply with the provision of the Customs Act and to verify antecedent of importer/exporter and IFC code no., identify his client and there at the declared address by using reliable, independent, authentic document, data information. It is on record that the appellant has obtained all the records required for the verification of KYC documents of M/s Kamal imports at the time of import of their first consignment and on receipt of KYC documents, the appellant has also conducted verification of the address of the importer from KYC details and which was found to be in existence at their declared premises. We find that as per Regulation 11 of the CBLR, 2013 there is no requirement of physical verification of registered premises of importer. The verification is only required to be done on the basis of documents which was done by the appellant, and is not disputed. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant reproduced as under:- On going through the impugned order, we find that the adjudicating authority has observed that the Customs Brokers has acted without obtaining the authorization from the exporters and as per the provisions of Customs Brokers Licensing Regulations, 2013, he is expected to conduct the Know Your Customer verification inasmuch as, the exporters are not traceable physically, the appellant is liable to penalty. The said findings of the Commissioner stands contested by drawing our attention to the fact that authorization was available in the file and the appellant has followed the Know Your Customer norms by verifying correctness of IEC Code identity of the clients and finding the clients from the declared addresses by using reliable authentic documents. Merely, because the exporters have not come forward and the Revenue has not able to trace them, by itself cannot be held to be a reason for concluding the mens rea against the CHA or to upheld the charge of abetment or collusion with the exporters. Ld. Advocate submits that in fact, all the relevant details of the exporters are still available in the website and the findings of the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments being fake, there was no due diligence on the part of the appellant. It is stated in the impugned order that there is no evidence to conclude that the CHA had prior knowledge that the importer was bogus. When the licence has been revoked with a clear cut finding that the appellant has complied with the KYC norms then I do not find any justifiable ground to impose penalty. The appellant has succeeded in establishing a case in his favour. As such, by following the above decision, imposition of penalty of ₹ 5 lakhs on the appellant is not justified. Accordingly, we set aside the same. The Hon ble Delhi High Court in case of Kunal Travels Vs. C.C. (I G), IGI Airport, new Delhi 2017 (354) E.L.T. 447 (Del.) has held as under:- 12. Clause (e) of the aforesaid Regulation requires exercise of due diligence by the CHA regarding such information which he may give to his client with reference to any work related to clearance of cargo. Clause (I) requires that all documents submitted, such as bills of entry and shipping bills delivered etc. reflect the name of the importer/exporter and the name of the CHA prominently at the top of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uctions/documents received from its client/importer/exporter. Furnishing of wrong or furnished correct information and veritable documents. The misdeclaration would be attributable to the client if wrong information were deliberately supplied to the CHA. Hence there could be no guilt, wrong, fault or penalty on the appellant apropos the contents of the shipping bills. Apropos any doubt about the issuance of the IE Code to M/s H.S. Impex, it was for the respondents to take appropriate action. Futhermore, the inquiry report revealed that there was no delay in processing the documents by the appellant under Regulation 13(n). 14. Any act to defraud presupposes the intention to obtain something fraudulently. In the present case, the appellant (through its proprietor) has all along contended that the documents were filed unauthorized by a person of the consignment; it objects to the very filing of the two shipping bills by either Mr. Katoch or any person authorized on its behalf, hence there cannot be a presumption of its deliberate act/intention to defraud. There is no evidence of active facilitation of clearance of the consignment through customs by the appellant, hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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