TMI Blog2024 (3) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the appellant CB has claimed that Shri Ajay Sharma, Senior Manager had been appointed to conduct all business in Delhi. This fact has been confirmed by Shri Vikas Joshi, senior associate of the appellant in his statement dated 10.12.2020 as well by Shri Ashwini Handa, Director of the appellant in his statement dated 07.09.2021. It has been categorically stated that Shri Ajay Sharma was the sole incharge of NITCO Air Express, Delhi office and responsible for marketing, payment, recovery, selecting clients after due diligence, managing filing of the documents such as, Shipping Bills etc. It has also been explicitly made clear by Shri Ajay Sharma that they did not take the KYC documents of M/s Hiba Enterprises. This is clear violation of the Regulation 10(e) and 10(n) of CBLR, 2018. In the impugned order, the Adjudicating Authority has relied on the Inquiry Report wherein it has been clearly stated that entries in the books of accounts of the appellant reflect bogus details, which could not have escaped the management s scrutiny. No evidence has been brought on record before us to enable us to differ from these findings. Mere assertion that the employee had carried out these act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led examination. No goods were found registered on the above referred Shipping Bills on the ICES. However, Shipping Bills No. 6884966 dated 01.12.2020 and 6921244 dated 02.12.2020 were found filed on the IEC of M/s Hiba Enterprises. On examination of the goods, in the presence of Sh. Jagdish Prasad, G Card Holder of the appellant, it was found that the exporter had declared one type of set of box Airtel/Airtel, but three types of different brands of boxes i.e. Airtel/Sun HD, Direct/Tata Sky Set top Boxes including accessories viz. Remote, connecting cable and power adapter were found. Investigations revealed that M/s Hiba Enterprises had purchased the goods from M/s Chhipa Sales Services, Neemach, MP. The purchase invoice did not bear the date and the details of GSTIN of the supplier, which when checked on the GST website, was found to have been cancelled in 2019. Hence, prima facie, it appeared that the appellant i.e. the CHA firm had not verified the facts/KYC/Goods of the exporter before filing the Shipping Bills. 2.1 Based on above investigations, the appellant was issued show cause notice and after following due procedure under Regulation 17 of CBLR, 2018, the Commissioner pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Counsel further submitted that a bare reading of the provisions of Section 188 of the Indian Contract Act makes it clear that an agent having an authority to do an act has authority to do every lawful thing which is necessary in order to do such act. In the present case, the appellant CB had authorized Shri Ajay Sharma as their G card to transact the business of Custom House Agent and he had the authority to do every lawful thing which was necessary in order to do such an act. However, he cannot be said to have been authorized to do illegal acts, which he did and, therefore, the appellant CB being the principle cannot be held responsible for his illegal acts. In the present case, the moment, the appellant CB became aware of the unlawful and illegal acts of Shri Ajay Sharma, his service was terminated and FIR was also lodged. The learned Counsel stated that the findings that the submissions given by the appellant CB do not appear to be convincing as the issue was communicated to Shri Vijay Kochar MD of the appellant CB Company through WhatsApp by Shri Ajay Sharma on 05.12.2020 whereas the police complaint against Shri Ajay Sharma was filed on 01.01.2021 is an afterthought, is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant CB 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 noncompliance, the appellant CB is required to bring the matter to the notice of the Deputy Commissioner/ Assistant Commissioner of Customs, as the case may be. In the instant case, Shri Ajay Sharma was the sole incharge handling the CHA business at Delhi office and he himself had connived with the clients behind the back of the appellant CB. Once the appellant CB became aware of the illegal act of his employee, he was immediately suspended. Similarly, in relation to Regulation 10 (e) as well Shri Ajay Sharma had acted dishonestly out of greed without the knowledge of any of the senior officials or management. So far as the compliance of Regulation (m) is concerned, to discharge his duties as a Customs Broker with utmost speed and efficiency and without any delay, there is no allegation that the appellant CB has not discharge his duties as a Customs Broker with utmost speed and efficiency and without any delay. Hence, there was no violation of the said regulation in the present case. As regards the violation of Regulation 10 (n) relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nformation as prescribed under Regulation 10(e) does not arise. The learned Authorised Representative further submitted that it is evident from the investigations that the appellant CB had abetted the export deliberately with the intention to avail monetary gains and also failed to take basic precaution while conducting his business. Consequently, the appellant CB did not discharge his obligation mandated under Regulation 10(m) of the CBLR, 2018. In the instant case, Shri Ajay Sharma, Senior Manager of the appellant CB company in his voluntary statement recorded under section 108 of the Customs Act, 1962 admitted that KYC documents of M/s. HIBA Enterprises was not collected. Further, the name of actual exporters was not declared before Customs and the same came to light only during investigation conducted by ACC (Export). Hence, it is crystal clear that the appellant CB has failed in discharging their obligation mandated under regulation 10(n) of the CBLR, 2018. In support of his submissions, the learned Authorized Representative relied on the following decisions:- 1. Commissioner of Customs vs. K.M. Ganatra [2016-TIOL-13-SC-CUS.]; 2. Commissioner of Customs, Jaipur vs. Naresh Kuma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgo or baggage; (m) discharge his duties as a Customs Broker with utmost speed and efficiency and without any delay; (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; .. [emphasis supplied] We find that the adjudicating authority has discussed his findings against each violation of the CBLR, 2018. 5.3 We now address the main submissions made before us regarding the responsibility of the appellant with regard to the acts of his employee. Before we consider the argument, it would be pertinent to reproduce Regulation 13(12) of the said Regulations. 13. Engagement or employment of persons. . (12) The Customs Broker shall exercise such supervision as may be necessary to ensure proper conduct of hiss employees in the transaction of business and he shall be held responsible for all acts or omissions of his employees during their employment. [emphasis supplied] 5.3.1 At the outset, we note that as per the aforesaid Regulations, the appellant is responsible for all the acts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Ms Sayana Gupta and Shri Gaurav Gupta, and to carry out their directions. Subsequent to this, Shri Sharma has stated that the IEC of M/s Hiba was used for camouflaging the identity of M/s Dewar World Design, of Ms Sayana Gupta and Shri Gaurav Gupta. In the face of such statement, it is not possible to accept the submissions of the learned Counsel that they were completely unaware of the activities of their Senior Manager, Shri Ajay Sharma, more so when Shri Gaurav Gupta in his statement dated 22.01.2021 has accepted that he had connived in misusing the IEC of M/s. Hiba Enterprises. 5.4 We also observe that in the impugned order, the Adjudicating Authority has relied on the Inquiry Report wherein it has been clearly stated that entries in the books of accounts of the appellant reflect bogus details, which could not have escaped the management s scrutiny. No evidence has been brought on record before us to enable us to differ from these findings. Mere assertion that the employee had carried out these activities in his personal capacity does not get washed, in the face of such statements/evidence. Regulation 13(12) categorically makes the Appellant responsible for any act or omissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edentials. 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 appointed Shri Kadam, G Card holder giving him the Power of attorney. Therefore, for any act or omission of Shri Kadam, the appellant is responsible. The mere act of removing its employee after an incident does not extinguish this vicarious liability. 5.5 We are unable to accept the submission of the learned Counsel that under the Contract Act, the agent is responsible for his acts. We note that under the doctrine of Respondeat Superior, employers ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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