Tribunal lifts Customs Broker License suspension, stresses compliance

The Tribunal ordered the immediate lifting of the suspension of the Customs Broker License of M/s United Customs House Agency, considering the time elapsed and completion of necessary inquiries. The case involved mis-declaration of imported goods, with concealed goods not complying with regulations, resulting in significant duty evasion. The appellant was found to have failed to comply with specific provisions of the Customs Broker Licensing Regulations but was not required to physically verify the importer's details. The Tribunal emphasized the Customs Broker's duty to ensure compliance and due diligence but lifted the suspension pending further inquiry by the Revenue.

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Issues Involved:
1. Suspension of Customs Broker License
2. Mis-declaration of Imported Goods
3. Compliance with Customs Broker Licensing Regulations (CBLR), 2018
4. Verification of Importer's Details and KYC Documents
5. Responsibility and Due Diligence of Customs Broker

Issue-wise Detailed Analysis:

1. Suspension of Customs Broker License:
The appeal was filed against the suspension of the Customs Broker License of M/s United Customs House Agency. The suspension was upheld by the impugned order dated 16.02.2022. The Tribunal directed that the suspension be lifted with immediate effect, considering the significant time elapsed and the completion of necessary inquiries.

2. Mis-declaration of Imported Goods:
The case involved the import of goods declared as "Dammar Baatu" in three containers, which were found to contain "Betel Nuts (Supari)" concealed behind bags of "Dammar Baatu." The Directorate General of Foreign Trade (DGFT) had revised the policy condition for Areca Nut to 'Prohibited' unless the CIF value was Rs. 251/- and above per Kilogram. The concealed goods' approximate value was Rs. 1,56,89,279/-, with a total duty evasion of approximately Rs. 1,72,58,207/-. The goods were considered prohibited as they did not comply with the Food Safety and Standard Act, 2006.

3. Compliance with Customs Broker Licensing Regulations (CBLR), 2018:
The appellant was alleged to have failed to follow the provisions of CBLR, 2018, specifically Regulation 10(d), 10(m), and 10(n). Regulation 10(d) obliges a Customs Broker to advise clients to comply with the Customs Act, 1962. Regulation 10(m) requires the Customs Broker to perform duties with efficiency and speed. Regulation 10(n) mandates verifying the correctness of the Importer Exporter Code (IEC) number, GSTIN, and the client's identity and functioning at the declared address using reliable documents.

4. Verification of Importer's Details and KYC Documents:
The appellant was alleged to have failed to verify the KYC documents, the registered address of the importer, and the financial background of the importer. The appellant argued that they had verified the GST certificate and IEC on the respective websites and that the documents collected were in accordance with the CBEC circular dated 8th April 2010. The Tribunal noted that it could not be the responsibility of the Customs Broker to physically verify the address or financial background of the importer.

5. Responsibility and Due Diligence of Customs Broker:
The Tribunal referred to the Hon'ble High Court of Delhi's observation in the case of Shiva Khurana, which stated that the CHA's duty is to satisfy itself regarding the importer's/exporter's authorization and IEC number, not to investigate the veracity of statements. The Tribunal found significant force in the appellant's argument that they had conducted necessary verification through documents. The Tribunal also referred to the Hon'ble Apex Court's observation in the case of K. M. Gantra & Co., emphasizing the CHA's role in safeguarding interests and the importance of compliance with regulations.

Conclusion:
The Tribunal concluded that the Customs Broker license suspension should be lifted with immediate effect, given the elapsed time and the likely completion of necessary inquiries. The findings and observations were stated to be interim and not to affect the final decision after the inquiry by the Revenue.

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