TMI Blog2021 (11) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant any further. Reliance was placed in the case of M/S. JAI AMBE LOGISTICS VERSUS COMMISSIONER OF CUSTOMS (GENERAL) , NCH, MUMBAI [ 2015 (12) TMI 313 - CESTAT MUMBAI] - In this case, we find that the appellant had no idea who the exporter was. Its employee, Shri Kadam, also had no contact with the exporter. The appellant or its employee has not conducted any due diligence measures. They claimed to have obtained KYC documents through email but have failed to produce them either before the Inquiry officer or at any stage including before us. The irresistible conclusion can only be that they have no such documents and also no idea of who the exporter was and simply filed a Shipping Bill heavily over-invoicing the goods. In this factual matrix, Jai Ambe does not advance the case of the appellant. There are no reason to interfere with the impugned order except to the extent it records that the appellant has violated Regulation 10(d) - appeal dismissed. - CUSTOMS APPEAL NO. 40567 OF 2020 - FINAL ORDER NO. 42435/2021 - Dated:- 15-11-2021 - MR. DILIP GUPTA, PRESIDENT AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) P. Raja and P. Kumanan, Counsel for the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the appellant had not done the carting in this case. Instead, the carting was also done in this case by Shri Inder Prakash Kohli who was not even authorized by the appellant to do such work. d) A market survey was conducted by the CIU, Mumbai Zone along with Shri Kohli on June 8, 2019 and it was found that the market price of Ratchering spanner set was ₹ 250/- whereas in the shipping bills the declared price was ₹ 5,125/-. Similarly, the price per piece of water saving aerator foam flow‟ was ₹ 40/- only in market whereas the declared price was ₹ 337/- per piece. Thus, the appellant filed of shipping bills in the name of an exporter without even contacting the exporter and without verifying their KYC documents but by simply accepting the documents provided by Mr. Kohli who was neither the exporter nor an employee of Customs Broker nor the Customs Broker himself. The prices of the export goods were grossly overvalued with the intention to claim excessive IGST refund. e) When questioned, Shri A Prabhu, partner of the appellant firm said that the KYC requirements in respect of importers and exporters from Mumbai was dealt with only by their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich he claimed to have received through e-mail. However, he never produced them. In terms of Regulation 10(k), all correspondence and papers relating to the business have to be maintained up to date which is not done by the Customs Broker. (iv) Regulation 10 (n) requires Customs Broker to verify the correctness of the Importer Exporter Code number, Goods and service tax identification number, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. In this case, admittedly the appellant had done nothing except simply accepting whatever documents were produced by Mr. Kohli and thereafter leaving the verification/ correctness of the goods to Mr. Kohli who is neither exporter nor Customs Broker or employee of the appellant. (v) Regulation 13 (12) mandates the Customs Broker shall exercise such supervision as may be necessary to ensure proper conduct of his employees in the transaction of business and he shall be held responsible for all acts or omissions of his employees during their employment. 4. The inquiry report found that the appellant is responsible for the acts of its employ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was conducted by CIU revealed over-invoicing by M/s. Sunrise Enterprises, the exporter and not by the appellant. (ii) The value declared in the shipping bills is the prerogative of the exporter, who alone is answerable for the over-invoicing. (iii) Their employee, Shri Kadam, the G Card holder of the appellant firm had no knowledge about the overbilling and there is no documentary evidence that he had committed any fraud. (iv) Actual over-invoicing was revealed only after conducting market inquiry by the CIU and G card holder cannot have such knowledge. (v) No connivance of the G Card holder of the appellant was revealed in the inquiry therefore, there is no violation of any obligation under regulation of CBLR, 2018. (vi) Absence of G- card holder during carting and clearance of goods was not connected to the appellant. Due to mutual trust between Mrs. Kohli and Mr. Kadam, G card holder, they allowed Shri Kohli to do the work and this lapse cannot be held against the appellant. (vii) The appellant cannot be penalized for the acts of its employee committed without its knowledge. The appellant was not at all aware of this misuse of G Card and therefore, it cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s upon the Customs Broker. The Customs Broker assumes a very important role in the processing of imports and exports of goods and related documentation under the Customs Act and acts as a pivot in the operation of Customs House in supervision of imports and exports. For this reason, the license is not given to anyone and everyone but is given only after conducting an examination to verify its knowledge of the customs procedures and checking its credentials. Thereafter, the Customs Broker is expected to act responsibly. It is true that the Customs Broker may not have the knowledge of any mis-declaration of the quantity, nature and value of the goods by the importer/exporter. However, the Customs Broker has to fulfill its obligations laid down in Regulation 10. 12. The Customs Broker licensed in one Customs House is also permitted to operate in other Customs Houses. However, all such operations must be directly done by Customs Broker himself or by its employees. For the acts and omissions of its employees, the customs broker is liable and this vicarious liability is explicitly indicated in Regulation 13. In this case, the appellant chose to operate from Chennai and Mumbai and has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . There shall be no order as to costs. 14. In this case, the carting was done by a person who is neither a licensed customs broker nor is an employee of the appellant nor is the exporter nor the employee of the Customs Broker. We have no doubt that this is a violation of Regulation 10(b). 15. Regulation 10(d) mandates the Customs Broker to advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of non-compliance, to bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be. The finding in the impugned order is that the appellant has not even seen the goods which were being exported and was not aware of the price of the goods being exported. We do not find anything in the CBLR, 2018 which requires the Customs Broker to assess or know the correct value of the goods being exported. There is nothing to show that the appellant was aware of the violations by the exporter and has not brought them to the notice of the Assistant Commissioner/ Deputy Commissioner. Thus, we do not find any ground to hold that the appellant has violated the Regulati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indulge in serious malpractices which ultimately resulted in loss of revenue to the Custom House to the extent of more than 80 lakhs, there is every justification in the respondents in treating the action of the applicant as detrimental to the interest of the nation and pass the final order of revoking his licence . As far as the allegations levelled against the Applicant are concerned, it has been found established that the Proprietor of the Applicant Thiru Natarajan had signed on certain blank documents such as Bs/F and S/Bs without knowing the importers/exporters and the nature of goods imported/exported in spite of being in the clearing line over thirty years. It is also admitted that Sri D. Sukumaran, Manager-cum-Power of Attorney of the Custom House Agent concerned, had actively involved in the fraudulent act in connivance with the importers and others and that as per the Power of Attorney Bond executed by Sri K. Natarajan all acts, deeds and things done by Sri D. Sukumaran were to be construed as if they were done by himself. Therefore virtually all the fraudulent activities carried out by the Power of Attorney of Thiru Natarajan were to be treated as having been carried ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the exporter wherever they are located, what is expected is at least the Customs Broker obtains KYC documents and takes necessary due diligence measures to check the exporter is at least genuine. This resulted in filing of documents wherein goods were overvalued 8 to 20 times the market price to gain excessive IGST refund. 18. Regulation 13 mandates the Customs Broker shall exercise such supervision as may be necessary to ensure proper conduct of his employees in the transaction of business and he shall be held responsible for all acts or omissions of his employees during their employment. Therefore, for the acts and omissions of Shri Kadam, the appellant is responsible. 19. Learned counsel for the appellant placed reliance on Ashiana Cargo. This case was in a different factual matrix. Under consideration was whether the suspension of the licence of the Custom House Agent was warranted or otherwise. It was not a case of final decision on the licence after inquiry. The G-Card holders of Ashiana were involved in a different business of smuggling narcotics abroad on their own account. This was not the activity of Ashiana. If any serious crime is committed by one of the emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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