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TMI Blog2023 (11) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... itiated by Special Intelligence and Investigation Branch (SIIB) of Air Cargo Complex (ACC), Mumbai, a case was registered against one importer M/s M.S. Trading Company, Delhi, who had imported 'hearing aids' by over valuation of imported goods for the purpose of money laundering. In connection with such imports, SIIB investigation noted that the appellants CB had filed Bill of Entry (B/E) No. 5001004 dated 30.01.2018, and thus were involved with certain violations of CBLR, 2018 and the same was informed to the jurisdictional Principal Commissioner of Customs (General), New Custom House, Mumbai-I by sending an offence report/letter in F. No. SIIB(I)/Gen-100/2017-18 ACC(I) dated 22.02.2019 along with Show Cause Notice (SCN) dated 19.02.2019. 2.2. On the basis of such offence report received from SIIB, ACC, Mumbai, jurisdictional Principal Commissioner of Customs (General), Mumbai-I had concluded that there is a prima facie case against the appellant for having contravened Regulations 10(d), 10(e) and 10(n) of CBLR, 2018. Accordingly, the said Principal Commissioner of Customs, had suspended CB license of the appellants under Regulation 16(1) of CBLR, 2018, with immediate effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted goods. The request for first check assessment was made by the appellants CB and it is only during such examination, the department itself came to know about overvaluation of goods. Hence, the intention of CB is bonafide and there is no false declaration of value; as there is no specific brand name and there is no requirement to declare unbranded nature, and thus he claimed that the appellants are not at fault and it cannot be said that they have violated Regulations 10(e). They also submitted that the appellants CB had verified the antecedents of the importer to the best of their capability by obtaining KYC documents such as IEC, PAN, Bank certified letter for registered address of importer, account held with Indian bank and verification of signature of the proprietor. Hence they claimed that there is no relevancy of the fact that the Customs broker did not physically verify the presence of importer/IEC, and the same had caused the violations under CBLR, 2018. 3.2. In support of their grounds the appellants cited the following decisions: (i) Anax Air Services Pvt. Limited Vs. Commissioner of Customs (Airport & General), New Delhi - Final Order No.50002/2022 dated 03.01.2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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) verify 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;" 5.3. We also find that the Principal Commissioner of Customs on the basis of the conclusion arrived in the impugned order, that as the appellant Customs broker did not have any interaction with their clients and thus there was no possibility of the CB to advise the clients to comply with the provisions of the Customs Act; as the appellants CB declared B/E of high value of imported goods without verifying the valuation aspect and without insisting on the declaration of brand, has held that the CB had violated the provision of Regulation 10(d) ibid. Similarly, on the account of the appellants CB had lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis, verification or any other purposes. 4.2 After assessment by the appraising group or for cases where examination is carried out before assessment, bill of entry needs to be presented for registration for examination of imported goods in the import shed. The proper officer of customs examines the goods along with requisite documents. The shipments, found in order are given clearance order by the proper officer of customs in the Import Shed." Further, the appellants CB were not aware of the brand of the imported goods as there was no such mention in the invoice. Precisely, for this reason the appellants CB had sought for examination of the goods on First Check basis by submitting the request to the Customs Appraising Group. 6.2. It is also a fact that the Customs Appraising Group-5 'B' upon perusal of the samples had come to a reasonable belief that the imported goods are of inferior quality and the value declared is not commensurate with the goods. Thus, a detailed inquiry was initiated on the above basis by SIIB (Import), ACC. We find that this particular fact itself brings out clearly that the examination of the imported goods for proper assessment of its value, based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned in the impugned order that there is any legal requirement of mentioning of 'brand name' for the purpose of assessment of goods under the Customs Act, 1962 or any other law and there was a failure on the part of the appellants in this regard. We find that the definition of the term 'assessment' under the Customs Act, 1962 during the relevant time of imports did not mention any such requirement; even the amended definition under Section 2(2) ibid, which came into force on 29.03.2018, which is subsequent to the event of imports in the present case, only mentions about quantity, weight, volume, measurement or other specific factor which affects the duty as the reference details in respect of imported goods to be considered for assessment of imported goods. If the imported goods are prescribed with certain specified rate of duty or exemption has been granted to imported goods, depending upon whether they carry a 'brand name' or 'unbranded', then there may be a need to determine this aspect. It is also a fact that in the present case, the imported goods did not carry any brand and the customs duty is not determined based on whether it is 'branded' or 'unbranded'. Hence, we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the method of valuation . - (1) Subject to rule 12, the value of imported goods shall be the transaction value adjusted in accordance with provisions of rule 10; (2) Value of imported goods under sub-rule (1) shall be accepted: Provided that - (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (b) the sale or price is not subject to some condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of rule 10 of these rules; and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below. (3) (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against declared value of Rs.59,79,521/-. We find that such an allegation at the show cause notice stage and later at the findings stage in the impugned order requires factual details or evidence to state that there was mis-declaration and the same is attributable to the appellants CB, in order to invoke the violation of due-diligence having not been undertaken by the appellants. We find no such evidence and on the contrary the declaration made in the bill of entry corresponds to the value declared in the commercial invoice. Thus, we find that the conclusion arrived by the Principal Commissioner of Customs (General) in the impugned order that the appellants have violated Regulation 10(e) ibid is not sustainable. 6.6. We find from the records, that the appellants have verified the existence of the importer through the certificate of Importer-Exporter Code issued by the Ministry of Commerce, DGFT indicating the name of the importer along with address, name of the proprietor; letter of Indian bank certifying the Signature nature of the proprietor of the importer firm, the maintaining of current account held by importer with their bank, bank statements and Permanent Account Number (P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , data and information. The said guidelines provide for the list of documents that is required to be verified and that are to be obtained from the client importer/exporter. it is also provided that any two documents of among such specified documents is sufficient for fulfilling the obligation prescribed under Regulation 10(n) of CBLR, 2018. We find that in the present case, the appellants CB had obtained the KYC documents and submitted the same to the Customs Department. Thus, we do not find any legal basis for upholding of the alleged violation of CBLR, 2018 by the appellants in the impugned order on the above issue. 6.8. We find that in the case of M/s Perfect Cargo & Logistics Vs. Commissioner of Customs (Airport & General), New Delhi 2021 (376) E.L.T. 649 (Tri. - Del.), the Tribunal had decided the issue of KYC verification of the importer/exporter by the Customs broker and the requirements specified in the CBLR, 2018. "34. The basic requirement of Regulation 10(n) is that the Customs Broker should verify the identity of the client and functioning of the client at the declared address by using, reliable, independent, authentic documents, data or information. For this purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneral), Mumbai Vs. Unison Clearing P Ltd., 2018 (361) E.L.T. 321. The relevant portion of the judgement in the above case is extracted below: "The whole purpose of the CBLR-2013 being to frame a time line so that undue delay in the proceedings can be avoided, and the balance will have to be struck between the strict adherence to the said time schedule to such an extent that even a day's delay would prove to be fatal and render the entire action invalid and on the other hand, to grant such a discretion to the revenue to continue the said action of suspension of licence for an indefinite period depriving the Customs brokers of their right to carry on business on the basis of the licence, on a spacious ground that the charges levelled against him are being enquired into. Neither of these two extreme situations are ideal and balance will have to be struck by construing that the time limit for completion of inquiry for revoking the licence or imposing the penalty and keeping the licence under suspension should be "Reasonable period", depending on the facts and circumstances of each case. There cannot be any absolute principle, which can be laid down to determine as what would be reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the unnecessary delays can be curbed is recording of reasons for the delay or non-adherence to this time limit by the Officer conducting the inquiry and making him accountable for not adhering to the time schedule. These reasons can then be tested to derive a conclusion whether the deviation from the time line prescribed in the Regulation, is "reasonable". This is the only way by which the provisions contained in Regulation 20 can be effectively implemented in the interest of both parties, namely, the Revenue and the Customs House Agent." 7.1. In the instant case, the alleged offence in importation of goods took place in respect of Bill of Entry dated 30.01.2018 which was reported by a letter/offence report dated 22.02.2019 and on that basis the jurisdictional Principal Commissioner had suspended CB license of the appellants under Regulation 16(1) of CBLR, 2018, with immediate effect vide Order No. 90/ 2018-19 dated 22.03.2019. Further, the said suspension was continued pending inquiry proceedings into the role of CB under Regulations 22 of CBLR, 2018, vide Order No.11/2019-20 dated 10.05.2019. Simultaneously, show cause notice No.10/2019 dated 10.05.2019 was issued to the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easonable grounds in terms of the test laid down by the Hon'ble High Court of Bombay. 8.1 In view of the above and on the basis of various decisions taken by the coordinate benches of the Tribunal and higher judicial forums on the adherence to time limits prescribed under CBLR, 2018, we find that there is no basis for sustaining the impugned order of the learned Principal Commissioner. 8.2 We also find that on the basis of above detailed discussions, analysis and the findings recorded in paragraphs 6.1 to 7.2 above, it is factually incorrect to state that the appellants had for their acts of omission and commission in dealing with importer in overvaluation of imported goods have failed to adhere to the responsibilities expected in terms of Regulations 10(d), (e) and (n) of CBLR, 2018. Thus, we find that the conclusions arrived at by the Principal Commissioner in the impugned order is contrary to the factual position and thus it is not legally sustainable. 9. In view of the foregoing discussions, we do not find any merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revoking the license of the appellants, as well as in imposit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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