TMI Blog2022 (7) TMI 1429X X X X Extracts X X X X X X X X Extracts X X X X ..... n - The CB was require to do the KYC on the basis of the documents prescribed. Undisputedly such KYC was done by the appellant, only what was not done was physical meeting and physical verification of the premises. In the case of M/S POONIA BROTHERS VERSUS COMMISSIONER OF CUSTOMS (PREV.) [ 2019 (4) TMI 911 - CESTAT NEW DELHI] , wherein the Hon'ble Tribunal held that The CHA is not supposed to verify the each and every aspect about the business of importer as the Inspector of Department or Investigating agency. From the submission made by the ld. Advocate and fact on record, it is apparent that the appellant has taken due diligence while verifying the KYC of the appellant based on the record submitted by him. In the present case the contravention alleged against the importer is non-declaration of retail sale price on auto parts imported by them for assessment under Section 4A of the Central Excise Act, 1944 for CVD - it is found that the bill of entry was filed by the appellant after the goods were detained by the officers of DRI. The said bill of entry was filed on first check basis for verification of the goods before assessment. In such a situation, there are no mala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me under Regulation 14 of CBLR, 2018 read with Regulation 17(7) of CBLR, 2018, for violation of Regulations 10 (d) and 10(n) of the CBLR, 2018 . 2.1 The appellant herein is a Customs Broker whose Customs Broker Licence Number is G-67, Code No.2336 issued by the Commissioner of Customs (A A), Customs House, Kolkata under Regulation 9(1) of the Customs House Agent s Licensing Regulation, 2004 [Now Regulation 7 (2) of the Customs Broker Licensing Regulation, 2018] on 07.06.2012 to transact Customs clearance work. 2.2 The appellant has filed Bill of Entries on behalf of M/s Pihu Gems LLP for undertaking clearance of the goods as indicated in Table A, as follows. Table-A Sl. No. B/E No. B/E date Goods Declared Qty (Kg) Declared Value 01 2309779 06.03.2019 0.400 Rs.6,46,18,046 02 2309437 06.03.2019 0.400 Rs.6,43,66,896 03 2306969 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/2021 dated 30.07.2021. By this order, the Appellant (Customs Broker) was also penalised for Rs.79,20,000/-. 2.6 Taking note of this order, proceedings were initiated against the appellant for revocation of his license to function as Customs Broker. This proceeding has culminated into the impugned order. Hence, the present appeal before us. 3.1 We have heard Shri Arijit Chakraborty, Advocate along with Shri R.N. Bandopadhyay, Advocate for the appellant and Shri M.P. Toppo, Ld. Authorised Representative for Revenue. 3.2 Arguing for the appellant, the Ld. Counsel submits that the issue involved in the present appeal is as indicated below : ➢ (i) The importer in the present case has been charged for over-valuation of the imported goods and not for under-valuation resulting into overpayment of duty. In fact, the import undertaken by the importer, for which the appellant had undertaken the work relating to documents and for clearance of imported goods, were considered by the Government approved valuers in the manner as prescribed, who enhanced the value as declared by the importer and also subsequently, the Customs Appraiser had enhanced the value as determined by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered the impugned order along with the submissions made in appeal during the course of arguments. For the revocation of license of the appellant, the Principal Commissioner of Customs (Airport ACC), has observed in his order as follows : 23.1 In the instant case :- i) Shri Soumen Roy of M/s Granada Air Services Pvt. Ltd., has consciously engaged himself and his Customs Broker firm in smuggling of inferior quality of stones. In order to do so, they facilitated filing of Bill of Entry with incorrect declarations, which dis not correspond with the goods actually imported and their respective value(s). Further, they are also found to have influenced the valuation of the imported stones by the Govt. approved Vauer, Shri Abhishek Saraogi, appointed by them at the behest of Shri Amit Bhadra alias Bubai. ii) During the investigation, several corroborative evidences like (a) giving intentional false declaration in the Bill of Entry in respect of description of goods (b) submission of false invoices, which do not match with the actual goods found in the consignment (c) inflating the value of the goods by influencing the Valuer, have been unearthed, as discussed supra, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the imported consignments; that it is settled position of law that CB cannot be held responsible for any declarations made in import documents unless there is evidence to show that the CB had any prior knowledge of alleged mis-declaration; that the allegation of violation of regulation 10(d) of CBLR, 2018 against the CB does not have any leg to stand in as much as there is no allegation and/or finding that the KYC documents including authorization were forged or incorrect in nature. iii) Shri Amit Bhadra @ Bubai [ G card holder) of M/s Maxim clearing Shipping Forwarding Pvt. Ltd., being the authorized representative of importer, M/s Pihu Gems LLP provided all required documents i.e. authorization Letter from the Importer; KYC duly filled up by the importer; Aadhar Card/ Passport of the Directors / Proprietor/ Partners; GST registration certificate; certificate of IE Code; PAN card; and, cancelled Cheque or Bank Certificate of the importer; after obtaining those documents, the CB verified the authenticity of those documents and after being satisfied with those documents, the CB proceeded to act in filing Bill of Entry alongwith all mandatory documents, as provided by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orters to advise them to with comply the provisions of Customs Act. ii) Shri Soumen Roy also admitted that though the verification of KYC is mandatory for CHA, still the KYC was not verified physically. It is also an established fact that the importer is non-existent at its declared place of business. Further, none of the two Directors/ Partners of M/s Pihu Gems LLP appeared before DRI against the summons issued to them. It is also established that the CB received all the documents/ communication through Shri Amit Bhadra and the CB was not in contact with the actual importers. These facts clearly establish that the Customs Broker has failed to verify the 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, thereby violated the provisions of Regulation 10(n) of Customs Broker Licensing Regulations, 2018. 23.4 In the present case, on perusal of the Offence Report, CB s submission, Inquiry Officer s report and facts on record and the discussions supra, I find that the Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Customs Vs. K.M. Ganatra and co, in Civil appeal No. 2940 of 2008. The observation is as under. The CHA occupies a very important position in the Customs House. The Customs procedures are complicated. The importer has to deal with multiplicity of agencies. The importer would find it impossible to clear his goods through these agencies without wasting valuable energy and time. The CHA is supposed to safeguard interests of both the importer and the Customs. A lot of trust is kept in CHP by importers/ exporters as well as by the government agencies. To ensure appropriate discharge of such trust, the relevant regulations are framed. Regulation 14 of the CHA liensing regulation lists out obligations of the CHA. Any contravention of such obligations even without intent would be sufficient to invite upon the CHA the punishment listed in the Regulations. 4.2 Regulations 10 (d) 10 (n) of Customs Broker Licensing Regulations, 2018, read as follows : Regulation 10. Obligations of Customs Broker A Customs Broker shall (a) . (b) ... (c) . (d) advise his client to comply with the provisions of the Act, ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed. Undisputedly such KYC was done by the appellant, only what was not done was physical meeting and physical verification of the premises. In the case of Poonla Brothers Vs. Commissioner of Customs (Preventive), Jaipur, reported in 2019 (370) ELT 1074 (Tri. Del), wherein the Hon'ble Tribunal held that: ....................... The CHA is not supposed to verify the each and every aspect about the business of importer as the Inspector of Department or Investigating agency. From the submission made by the ld. Advocate and fact on record, it is apparent that the appellant has taken due diligence while verifying the KYC of the appellant based on the record submitted by him. We also find that the KYC is required to be done on the basis of following guidelines prescribed by the Central Board of Excise Customs which are as under: S. No . Form of organisation Features to be verified Documents to be obtained 1. Individual (i) Legal name and any other names used (ii) Present and Permanent address, in full, complete and correct. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... These guidelines nowhere prescribes that CHA, before taking the job of Customs Clearance is required to be physically verify the existence of Importer. If the required documents as prescribed above is made available to CHA job for KYC norms, Is fulfilled. The appellant has fulfilled these requirements as is apparent from the case record . 4.5 In case of Freight Travels Pvt. Ltd. [2016 (344) ELT 602 (Tri Delhi)] tribunal has held as follows: 4. We have heard both the sides and examined appeal records. The license of the appellant stands revoked only on the ground that they have failed in their obligation of verifying the identity of his client and their existence in the given address. The admitted facts of the case are that the importer s details as available in IEC, PAN Cards, Bank Account and electricity have been checked by the appellant. No physical verification of importer s premises is mandated in the regulations nor it is a general requirement as per business practice. No violations have been noticed in respect of transactions with Customs with reference to consignment cleared through the appellants. As such the order of revocation of license, only o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it is a settled law that the punishment has to be commensurate and proportionate to the offence committed. In the present case, we notice that the punishment of revocation is not justifiable even if it is to be admitted that physical verification of the importer s premises could have avoided the filing of the bill of entry by the appellant. Even in such a situation, the violation in respect of the cargo viz. the non-declaration of the RSP on the auto parts, a debatable point of interpretation, cannot be held against the appellant to result in the revocation of their licence. Here, it is to be noted that the bill of entry was filed after the detention of the goods for inquiry by the DRI Officers and request for physical verification of the cargo before assessment has been made in the form of first check bill of entry. We find that the impugned order passed on dis-agreement with the inquiry report has not brought out clear sustainable ground for such extreme action of revocation of licence. Violation of CBLR, 2013 has not been brought out as all the points have been elaborately discussed in the inquiry report and no sustainable ground for differing with the same could be made out. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestigations, which goes contrary to the assessments made by the Customs officer on the Bill of Entry, cannot be the reason for holding Customs Broker to have acted for violation the Regulation 10 (d), unless and until, a specific charge of connivance with the Customs Officers is made. In the present case, the Commissioner did not find any such connivance. 4.9 Reliance placed by the Commissioner on the decision of the Hon ble Supreme Court of India in the case of Commissioner of Customs Vs. K.M.Ganatra and Company in Civil Appeal No.2940 of 2008, cannot be justified as the facts of that case are not identical. the case of K M Ganatra was the case where the Custom House Agent had sub-let his license. In para 2 of the order Hon ble Apex Court recorded the facts as follows: 2. On the basis of the aforesaid information, investigations were initiated and certain firms were identified which were involved in the misuse of the licence in the aforestated manner. During the investigation it was found that an endeavour had been made to give the impression that they were bona fide exporters. The shipping bills were filed and for the said purpose, services of CHA licence of the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, Ms. Mohana, learned senior counsel for the appellant, has placed reliance on the decision in Noble Agency v. Commissioner of Customs, Mumbai [2002 (142) E.L.T. 84 (Tri. - Mumbai)] wherein a Division Bench of the CEGAT, West Zonal Bench, Mumbai has observed :- The CHA occupies a very important position in the Customs House. The Customs procedures are complicated. The importers have to deal with a multiplicity of agencies viz. carriers, custodians like BPT as well as the Customs. The importer would find it impossible to clear his goods through these agencies without wasting valuable energy and time. The CHA is supposed to safeguard the interests of both the importers and the Customs. A lot of trust is kept in CHA by the importers/exporters as well as by the Government Agencies. To ensure appropriate discharge of such trust, the relevant regulations are framed. Regulation 14 of the CHA Licensing Regulations lists out obligations of the CHA. Any contravention of such obligations even without intent would be sufficient to invite upon the CHA the punishment listed in the Regulations.... We approve the aforesaid observations of the CEGAT, West Zonal Bench, Mumbai and unhesit ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
