TaxTMI 
TaxTMI 
2020 (1) TMI 946
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....as processed by the appellant, it was alleged that the appellant was having the knowledge about the imported consignment to be mis-declared with respect to its description and value. After the investigation a show cause notice was issued to the importer M/s Kamal import in terms of Section 111(d), 111(e), 111(i), 111(j), 111(l) and 111(m) of customs Act, 1962 (here-in-after referred to as the Customs Act), along with provisions of intellectual property rights (Imported goods) Enforcement Rules, 2007 and FT (D&R) Act, 1982 for the import vide bill of entry No. 2517455 dated 19.07.2007. During the investigation DRI also recorded a statement of Ms. Savinder Sharma. In the show cause notice issued to the importer, M/s Kamal Imports appellant through its proprietor Ms. Savinder Sharma( F card holder of the appellant CB) was one of the co- noticee for the act of commission and omission committed by the customs broker. Subsequent to issue of the show cause notice by the DRI to the appellant/proprietor, the respondent commissioner also issued a show cause notice in terms of Regulation 11 of the Customs Broker Licensing Regulation, 2013 (CBLR 2013 in short), so as to revoke their lice....
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.... the one side has been alleged to be deliberate and on other side it has been alleged that Noticee has not observed due diligence. 16. From the facts on records and investigations conducted by the DRI it has been seen and as explained above that the Noticee took the import documents in casual manner, did not use her diligence to verify the correctness of import documents, failed to verify the antecedent, correctness of IEC number, identity of her client and functioning of client at the declared address by using reliable, independent authentic documents data or information. But I observe that although in the DRI SCN it has been alleged that the syndicate has indulged in forgery of documents to obtain IEC and opening accounts but nowhere has alleged that the Customs Broker had done this forgery. Therefore, the act of the Noticee although negligent and has been done without due diligence but does not appear to be deliberate. I observed that DRI during investigations has conducted searches at the residence of the Noticess (Customs Broker) as well as residential addresses of Sh. Manish Chaudhary, Sh Gaurav Ahuja and Sh. Arun Kumar i.e. persons alleged to be invoked in ....
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....ned persons of the company. There is no provision in the CBLR, 2013 which mandates that the documents needs to be submitted to the CB by the proprietor/partners or the director of the importing company. Hence, the charge that the appellant has not personally collected the documents for the customs clearance of the consignment, from the proprietor or authorized persons importers is not required under CBLR/Customs Act, for which reliance was placed on the decision of Hon'ble Tribunal in the case of Him Logistics Pvt. Ltd. Vs. Commissioner of Cus., New Delhi - 2016 (338) E.L.T. 725 (Tri. Del.) which was also affirmed by Hon'ble Delhi High Court. The Hon'ble Tribunal has held that there is no stipulations of legal requirements to physically verify the business premises on residential premises of importer and also to have a personal meeting. The reliance was also placed on the various other decisions of the Hon'ble Tribunal such as Commissioner of Customs Vs. Yogesh Kumar - 2017 (349) E.L.T. 12 (Del.), Shiv Khurana Vs. Commissioner of Customs, Final Order No. C/A/ 55914/2016-CU(DB). 7. That enquiry officer and the Ld. Commissioner have accepted that there is no Connivance on the part....
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....(b) Transact business in the Customs Station either personally or through an employee duly approved by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; (c) Not represent a client in any matter to which the Customs Broker, as a former employee of the Central Board of Excise and Customs gave personal consideration, or as to the facts of which he gained knowledge, while in Government service; (d) Advise his client to comply with the provisions of the Act 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. 12. The show cause notice issued to the appellant does not explain as to which of the specific provisions of Section 11E has been violated by the appellant. However, we find that in the show cause notice it is mentioned that the appellant failed in its duty of customs broker by not advising his client to comply with the provision o....
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....led on first check basis for verification of the goods before assessment. In such a situation, we find that no mala fide or intentional violation of any provisions of the Customs Act can be alleged on the part of the Customs broker. Regarding KYC norms and obligations under Regulation 11, we find that case as made out in the original order is neither convincing nor sustainable. 13. Further, we find that identical issue has also been dealt with by Hon'ble Delhi High Court in case Commissioner of Customs Vs. Him Logistics Pvt. Ltd. - 2017 (348) E.L.T. 625 (Del.), and in case of M/s Boria Ram Vs. Commissioner Of Customs, New Delhi - 2017 (354) E.L.T. 661 (Tri. - Del), it is held that the CHA required to verify KYC norm, as per the documents submitted to them only. Para 3 of the order which is relevant reproduced as under:- On going through the impugned order, we find that the adjudicating authority has observed that the Customs Brokers has acted without obtaining the authorization from the exporters and as per the provisions of Customs Brokers Licensing Regulations, 2013, he is expected to conduct the "Know Your Customer" verification inasmuch as, the exporters are not tra....
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.... is not required for the appellant to verify the address of the exporter/importer physically. Therefore, we hold that the appellant has taken due care while processing the export documents to check credentials of the exporter. In these circumstances, no penalty is impossible on the appellant in the light of decision of this Tribunal in the case of Falcon India v. Commissioner of Customs [2015 (326) E.L.T. 728 (Tri. - Del.)] wherein this Tribunal has observed as under: "3. The facts narrated above itself would show that the suspension of license was revoked on both occasions on the finding that the appellant has complied with the KYC norms. Though the authority has stated this, the penalty is seen imposed by a self-contradicting ground that however, the documents being fake, there was no due diligence on the part of the appellant. It is stated in the impugned order that there is no evidence to conclude that the CHA had prior knowledge that the importer was bogus. When the licence has been revoked with a clear cut finding that the appellant has complied with the KYC norms then I do not find any justifiable ground to impose penalty. The appellant has succeeded in establishing....
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....ubt, then for such erroneous grant of the IE Code, the appellant cannot be faulted. The IE Code is the proof of locus standi of the exporter. The CHA is not expected to do a background check of the exporter/client who approaches it for facilitation services in export and imports. Regulation13(e) of the CHLR, 2004 requires the CHA to : "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" (emphasis supplied). The CHAs due diligence is for information that he may give to its client and not necessarily to do a background check of either the client or of the consignment. Documents prepared or filed by a CHA are on the basis of instructions/documents received from its client/importer/exporter. Furnishing of wrong or furnished correct information and veritable documents. The misdeclaration would be attributable to the client if wrong information were deliberately supplied to the CHA. Hence there could be no guilt, wrong, fault or penalty on the appellant apropos the contents of the shipping bills. Apropos any doubt about the issuance of the IE Code to M/s H.S. Impex, it was....