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TMI Blog2025 (5) TMI 1625X X X X Extracts X X X X X X X X Extracts X X X X ..... of Analysing & Risk Management [DGARM], Mumbai was received through email dated 07.02.2023. (ii) The report revealed that the appellant had facilitated custom clearance for an exporter namely M/s Ariction Overseas [The exporter], for whom the appellant had filed 16 shipping bills during the period of 13.09.2021 to 05.10.2021. (iii) The said report highlighted that the said exporter could not be traced during verification, and hence he was declared as to be a non-existent entity. (iv) Consequently, the custom broker license of the appellant was suspended with immediate effect vide Order No. 07/ZR/Suspension/Policy/2023 Dated 15.02.2023. Thereafter, vide order dated 06.03.2023, the suspension of the custom broker license of the appellant was confirmed. 3. The Department issued the show cause notice dated 24.04.2023 wherein the appellant was show caused as to why: (a) they should not be held responsible for contravention of provisions of Regulation 10(d), 10(e) & and 10(n) of Custom Broker licensing Regulation, 2018; (b) their Customs Broker License No. R-04/DEL/CUS/2013 (PAN No. BAEPS1360L) valid up to 31.12.2042 should not be revoked and part or whole of the security subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on), Kolkata -2017 (348) ELT 0502 Tri-Cal in this regard. 5.3 Learned counsel further submitted that the proprietor of the appellant i.e. Sh. Anil Kumar had been given the KYC documents of the exporter by the proprietor of the exporter himself and not by anyone else and the appellant duly completed the KYC formalities. He relied on the decision of the Tribunal Mumbai in the case of Setwin Shipping Agency vs. Commissioner of Customs (General), Mumbai -2010 (250) ELT 141 (Tri-Mumbai). 5.4 Learned counsel also submitted that there is no evidence on record to show that the appellant had advised his client i.e. M/s Ariction Overseas to not comply with the provisions of the Act. Further he stated that there is no evidence to show the knowledge of the appellant in any of any non-compliance done by M/s Ariction Overseas. He drew attention to Krishna Shipping Agency vs. Commissioner of Customs (Airport & Administration), Kolkata,- 2017 (348) ELT 0502 (Tri-Cal) wherein the Tribunal held that: "at no stage the appellant had knowledge of any irregularly in export/import consignments .... order of revocation of license is set-aside." In this regard, he relied on the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsons has committed fraud with his KYC documents that were handed over to get a job. It was alleged that the appellant has misused his documents to facilitate fraudulent exports. The statement of Sh Dhiraj, the exporter of Ariction Overseas revealed that he had not authorized the appellant and these exports consignments did not belong to him. He further submitted that he had not got any order nor did he sign any documents. He submitted that the exports of these goods through the appellant were fraudulent exports and he had been cheated by some Anil and Ashok Sharma. The Appellant was neither authorized by the Exporter to file the Shipping Bills. 6.1 Learned authorized representative further stated that when the proper authorization was not obtained as per Regulation 10 (a) of the CBLR 2018, the question of exercising due diligence under Regulation 10(e) and advising his clients to adhere to the provisions of the Act and Rules cannot be ascertained. Learned authorized representative also stated that the IEC had been obtained by submitting fake documents by fraudsters and the appellant never verified anything since Mr Dhiraj in whose name the IEC was issued, had never contacted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch 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 observation of the CEGAT, West Zonal Bench, Mumbai and unhesitatingly hold that this misconduct has to be seriously viewed." 6.4 Learned authorized representative also submitted that the Apex Court in its judgement in Surjeet Singh Chhabra vs. Union of India-1997 (89) ELT 646 (S.C.) has held that the statements recorded before the Customs Officers are admissible before a Court of Law as Customs Officers are not Police Officers. He further relied on the judgement of the Apex court in Commissioner Of Central Excise, Madras vs. System & Components Private Limited-2004 (165) ELT 136 (S.C.) wherein it was held that it is a basic and settled law that "what is admitted need not to be proved". In the light of above submissions and relying on the compilations of case laws and the facts on record, learned authorized representative concluded that the appellant had been negligent or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof, and in case of non-compliance, 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;................." 11. At the outset, it needs to be noted that the appellant had filed the documents of the exporter, who had exported under claim for drawback, RoDTEP/RoSCTL and not IGST, for which the said Analytics Report had been issued. 12. We will now examine the violations as per the allegations made in the impugned order. A violation of Regulation 10(d) of the CBLR, 2018 involves a customs broker failing to file bills of entry based on accurate documents, failing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce. This could involve not properly verifying the client's documents, credentials, or the accuracy of information shared about the cargo. In this context, it is an admitted fact that the appellant was in possession of the required KYC documents at the time of customs clearance of the subject goods. It has been submitted that all due diligence as required under the CBLR, 2018 and Circular No. 02/2018-Customs dated 12.01.2018 read with Circular No. 09/2010-Customs dated 8.04.2010. The said Customs authorities did not raise any objection at the time of any clearance of the said goods. No mis-declaration or under valuation of the goods has been reported at the time of its clearance for export. Further, we note that there is no evidence as to what wrong information was provided by the appellant, in their capacity as customs broker to the Department or the exporter. Consequently, we hold that the violation of said regulations is not established. 15. We note that a violation of Regulation 10(n) of the CBLR, 2018 typically occurs when a customs broker fails to verify the identity of their client using reliable, independent, and authentic documents, data, or information. This means th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that any of the two listed documents in the Annexure would suffice. The Principal Commissioner noticed in the impugned order that any two documents could be obtained. The appellant had submitted two documents and this fact has also been stated in paragraph 27(a) of the order. It was obligatory on the part of the Principal Commissioner to have mentioned the documents and discussed the same but all that has been stated in the impugned order is that having gone through the submissions of the Customs Broker, it is found that there is no force in the submissions. The finding recorded by the Principal Commissioner that the required documents were not submitted is, therefore, factually incorrect." 16. We also take note of judgment of the High Court of Delhi in Kunal Travels (Cargo) Vs. Principal Commissioner of Customs (I&G), IGI Airport, New Delhi-2017 (354) E.L.T. 447 (Del.), wherein the Court held that the appellants CB is not an officer of Customs who would have an expertise to identify mis-declaration of goods. The relevant portion of the said judgement is extracted below: "The CHA is not an inspector to weigh the genuineness of the transaction. It is a processing agent of docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms (I&G) [2014 (302) ELT 161 (Del.)], wherein it was held as under:- "12. Learned Senior Standing Counsel for the Customs has stressed that the infraction in this case is not a routine matter, but rather, illegal smuggling of narcotics by the G card users. However, given the 14 C/40199&40248/2020 factual finding that the CHA was not aware of the misuse of the G cards (and thus, also unaware of the contents being smuggled), no additional blame can be heaped upon the CHA on that count alone. Rather, the only proved infraction on record is of the issuance of G cards to non-employees, as opposed to the active facilitation of any infraction, or any other violation of the CHA Regulations, whether gross or otherwise. Neither have any such allegations been raised as to the past conduct of the appellant, from the time the license was granted in January, 1996. Equally, it is important to note that the appellant has - as of today - been unable to work the license for 8 years, and thus been penalized in this manner. This is not to say that the trust operating between the Customs Authorities and the CHA is to be taken lightly, or that violations of the CHA Regulations should not be dealt w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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