Tribunal overturns order, finds no breach of CBLR Regulations

The Tribunal set aside the order under challenge, holding that there was no violation of Regulations 10(d) and 10(n) of CBLR, 2018, by the Customs Broker. The appeal was allowed.

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Issues Involved:
1. Violation of principles of natural justice.
2. Alleged violation of Regulation 10(d) of CBLR, 2018.
3. Alleged violation of Regulation 10(n) of CBLR, 2018.

Summary:

1. Violation of principles of natural justice:
The appellant, a Customs Broker (CB), argued that the order under challenge should be set aside due to a violation of principles of natural justice, as no proper notice about the show cause notice dated 29.07.2020 issued by DRI was given to the appellant. The CB was not made a noticee in the said show cause notice where the mis-declaration and gross undervaluation were alleged. The suspension of the CB's license on 29.09.2020 was done without giving any cogent reason, and subsequent personal hearings and revocation of suspension did not warrant the issuance of a further show cause notice dated 29.12.2020 proposing revocation of the license.

2. Alleged violation of Regulation 10(d) of CBLR, 2018:
Regulation 10(d) requires the CB to advise the client to comply with the provisions of the Act and bring non-compliance to the notice of the authorities. The adjudicating authority confirmed the violation based on the non-response of IEC holders to summons and non-cooperation of Shri Sandeep Jain during the investigation. However, the Tribunal observed that Shri Sandeep Jain did appear before the investigating authorities, and the CB provided all requisite documents. The Tribunal held that there is no provision in the Customs Act or CBLR, 2018, that fixes responsibility on the CB to ensure the attendance of importers before investigation authorities. Thus, the CB did not violate Regulation 10(d).

3. Alleged violation of Regulation 10(n) of CBLR, 2018:
Regulation 10(n) requires the CB to verify the correctness of the IEC number, GSTIN, identity of the client, and the functioning of the client at the declared address. The adjudicating authority concluded that the CB failed to comply with this regulation as the importers were untraceable. However, the Tribunal observed that the CB had met the IEC holders, verified all original documents, and was introduced to Shri Sandeep Jain as their representative. The Tribunal held that the CB complied with the KYC guidelines, and mere knowledge of Shri Sandeep Jain being the representative does not amount to a violation of Regulation 10(n), especially when the IEC holders were found available.

Conclusion:
The Tribunal set aside the order under challenge, holding that there was no violation of Regulations 10(d) and 10(n) of CBLR, 2018, by the CB. The appeal was allowed.

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