Customs Broker due diligence and knowledge test fails where misdeclaration is not proved; penalty set aside.

A Customs Broker cannot be penalised under Regulations 10(d), 10(e) and 10(n) of the Customs Broker Licensing Regulations, 2018 unless there is admissible evidence of knowing failure to advise the client, lack of due diligence, or awareness of misdeclaration. On the record, the broker had obtained KYC particulars before processing the export documents, the branch-in-charge statement showed no knowledge of concealed sugar in the consignments described as raw rice, and the incorrect affidavit undertaking was treated as a clerical or typographical error. The alleged violations were therefore not proved, and the penalty order was set aside.

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Issues: Whether the appellant Customs Broker violated Regulation 10(d), Regulation 10(e) and Regulation 10(n) of the Customs Broker Licensing Regulations, 2018 so as to justify the penalty imposed.

Analysis: The record, including the statement of the branch-in-charge recorded under Section 108 of the Customs Act, 1962, indicated that the appellant had no knowledge that sugar was concealed in the consignments described as raw rice and would not have filed the shipping bill had that fact been known. The materials also showed that the appellant had obtained KYC particulars before processing the export documents, and the incorrect affidavit undertaking was explained as a clerical or typographical error. On these facts, there was no admissible evidence to establish that the appellant knowingly failed to advise the client, lacked due diligence in verifying the information furnished for clearance, or was aware of the attempted misdeclaration.

Conclusion: The alleged violations of Regulation 10(d), Regulation 10(e) and Regulation 10(n) of the Customs Broker Licensing Regulations, 2018 were not proved, and the penalty could not be sustained.

Final Conclusion: The penalty order was set aside and the appellant was granted the resulting relief in law.

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