Customs broker's licence revoked for filing benami Bills of Entry without authorization, facilitating psychotropic substance smuggling under CBLR Regulations 10.

CESTAT New Delhi upheld revocation of customs broker's licence and forfeiture of security deposit with penalty for violations of CBLR Regulations 10(a), 10(d), and 10(n). The broker filed benami Bills of Entry without obtaining authorization from the actual importer, facilitating smuggling of psychotropic substance dry khat. The tribunal found the broker failed to contact the declared importer, filed entries based on wrong information from unauthorized persons, and violated verification requirements. The tribunal emphasized that benami filings undermine customs procedures and risk-based controls, potentially enabling contraband imports. Appeal rejected.

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Issues Involved:
1. Violation of Regulation 10(a) of the Customs Broker Licensing Regulations, 2018.
2. Violation of Regulation 10(d) of the Customs Broker Licensing Regulations, 2018.
3. Violation of Regulation 10(e) of the Customs Broker Licensing Regulations, 2018.
4. Violation of Regulation 10(m) of the Customs Broker Licensing Regulations, 2018.
5. Violation of Regulation 10(n) of the Customs Broker Licensing Regulations, 2018.
6. Appropriateness of the revocation of the Customs Brokers license, forfeiture of security deposit, and imposition of penalty.

Summary of Judgment:

Regulation 10(a):
The Customs Broker must obtain authorization from the importer. The Commissioner found that the appellant did not obtain any authorization from M/s. Angel Corporation and relied on documents provided by a third party, Shri Tarkeshwar Dubey. The Tribunal upheld this finding, stating that the appellant failed to verify the authenticity of the importer, thus violating Regulation 10(a).

Regulation 10(d):
This regulation requires advising the client to comply with the law and reporting non-compliance. The Tribunal found that the appellant did not contact M/s. Angel Corporation, thus failing to advise compliance with the law. The appellant's actions facilitated the import of 'dry khat,' a psychotropic substance, leading to a violation of Regulation 10(d).

Regulation 10(e):
This regulation mandates due diligence in ascertaining the correctness of information provided to clients. The Tribunal found no evidence that the appellant provided incorrect information to clients but rather filed Bills of Entry based on incorrect information from a third party. Therefore, the appellant did not violate Regulation 10(e).

Regulation 10(m):
This regulation requires the Customs Broker to discharge duties efficiently and without delay. The Tribunal found no delay in the appellant's actions but noted carelessness. Thus, there was no violation of Regulation 10(m).

Regulation 10(n):
This regulation requires verifying the correctness of the Importer Exporter Code (IEC), GSTIN, and the identity and functioning of the client. The Tribunal found that the appellant did not verify these details with M/s. Angel Corporation but relied on documents from a third party. This constituted a violation of Regulation 10(n).

Revocation of License, Forfeiture of Security Deposit, and Imposition of Penalty:
The Tribunal upheld the Commissioner's decision to revoke the appellant's Customs Brokers license, forfeit the security deposit, and impose a penalty of Rs. 50,000/-. The Tribunal emphasized that filing benami Bills of Entry, especially for importing a psychotropic substance, is a severe violation warranting the toughest action. The appeal was rejected, and the impugned order was upheld.

Conclusion:
The Tribunal found the appellant in violation of Regulations 10(a), 10(d), and 10(n) of the Customs Broker Licensing Regulations, 2018. The revocation of the license, forfeiture of the security deposit, and imposition of a penalty were deemed appropriate and proportionate to the violations. The appeal was dismissed.

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