TaxTMI 
TaxTMI 
2022 (7) TMI 1429
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....me under Regulation 14 of CBLR, 2018 read with Regulation 17(7) of CBLR, 2018, for violation of Regulations 10 (d) and 10(n) of the CBLR, 2018". 2.1 The appellant herein is a Customs Broker whose Customs Broker Licence Number is G-67, Code No.2336 issued by the Commissioner of Customs (A & A), Customs House, Kolkata under Regulation 9(1) of the Customs House Agent's Licensing Regulation, 2004 [Now Regulation 7 (2) of the Customs Broker Licensing Regulation, 2018] on 07.06.2012 to transact Customs clearance work. 2.2 The appellant has filed Bill of Entries on behalf of M/s Pihu Gems LLP for undertaking clearance of the goods as indicated in Table A, as follows. Table-A Sl. No. B/E No. B/E date Goods Declared Qty (Kg) Declared Value 01 2309779 06.03.2019 0.400 Rs.6,46,18,046 02 2309437 06.03.2019 0.400 Rs.6,43,66,896 03 2306969 06.03.2019 "Rough Colour Stone (Quartz)" 0.400 Rs.6,47,00,587 04 2307503 06.03.2019 0.400 Rs.6,47,22,161 Total 1.6 25,84,07,690 2.3 The Bill of entries filed by the Appellant on the behalf of the impo....
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....rs in the manner as prescribed, who enhanced the value as declared by the importer and also subsequently, the Customs Appraiser had enhanced the value as determined by the valuers. ➢ This fact clearly shows that at time of assessment and clearance of the said goods, Revenue was of the view that the value as declared by the importer on the Bill of Entries filed though the appellant was under-declared. Subsequently, the DRI has sought to state that the value was over-declared and the importer was indulging in the Trade based money laundering. ➢ Be that as it may be the order of the Commissioner on the notices issued for the reason that the goods have been over-valued by the importer and for imposition of penalty on the appellant has been challenged before the Hon'ble High Court of Calcutta, and the order has been stayed. ➢ Appellant has undertaken the same work in respect of the clearance of the same/ similar goods imported by another importer, viz. M/s Discite Pvt. Ltd.. Investigations were undertaken by the DRI against the said importer also and show cause notice alleging trade based money laundering was issued in that case also. Appe....
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.... goods (b) submission of false invoices, which do not match with the actual goods found in the consignment (c) inflating the value of the goods by influencing the Valuer, have been unearthed, as discussed supra, which point out the complicity on part of Shri Soumen Roy and M/s Grandada Air Services Pvt. Ltd., in effecting the said fraudulent imports and money laundering. iii) The main office of M/s Pihu Gems LLP was found to be non-functional/non-operational. The branch office could not be located at the declared address. None of the two Directors/Pariners of M/s Pihu Gems LLP appeared before DRI against the summons issued to them. iv) Shri Soumen Roy M/s Granada Air Services Pvt. Ltd., in his statement admitted that he has never met any of the Directors/Partners of M/s Pihu Gems LLP and though the verification of KYC is mandatory for CHA, still the KYC was not verified physically. 23.2 In this regard, the CB submitted that:- i) The instant impugned clearing job was the 3rd job, prior to that CB undertook 1st & 2nd import clearance of same item i.e. SEMI PRECIOUS ROUGH STONES of M/s Discite Private Ltd., Before filing the Bill of Entry or process....
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....obtaining those documents, the CB verified the authenticity of those documents and after being satisfied with those documents, the CB proceeded to act in filing Bill of Entry alongwith all mandatory documents, as provided by the importer, before the Customs Authority, After accomplishment of clearing job, the CB reises bill for clearing job and receives payment through Banking Channel directly from the importer/exporter. In the instant case also, all those documents were verified from departmental official website by the CB and all the documents were found to be proper and correct; that the Customs Brokers Licensing Regulations, 2018 does not mandate that a Customs Broker has to obtain KYC documents from the importer/ exporter directly. It only provides that CB has to comply with obtaining the KYC documents. It is also not the case that CB had played any active role in the importation of alleged mis-declared consignment. Therefore, allegation of contravention of Regulation 10(n) of CBLR, 2018, is, prima facie, not sustainable. 23.3 In this regard, the Inquiry Officer found that:- i) Shri Soumen Roy, "G" Licence holder of M/s Granada Air Services Pvt. Ltd., the Cus....
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....egulation 10(n) of Customs Broker Licensing Regulations, 2018. 23.4 In the present case, on perusal of the Offence Report, CB's submission, Inquiry Officer's report and facts on record and the discussions supra, I find that the Customs Broker has violated the provisions of Regulation 10(d) of Customs Broker Licensing Regulations, 2018 inasmuch as G-Card holder of Customs Broker was himself actively involved in the fraud and no one from the CB was ever in contact with the exporters to advise them to comply with the provisions of Customs Act. Further, the Customs Broker has failed to verify the identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information, thereby violated the provisions of Regulation 10(n) of Customs Broker Licensing Regulations, 2018. 23.5 In view of above, I have no reason to disagree with the Inquiry Report dated 29.01.2022 submitted by the Inquiry Officer and find that the CB has violated provisions of Regulation 10(d) and 10(n) of CBLR, 2018. 24. Further, the CB has cited various case laws and judgements in support of their submissions. In this reg....
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.... 2018, read as follows : "Regulation 10. Obligations of Customs Broker - A Customs Broker shall - (a)........................................ (b).......................................... (c)........................................... (d) advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, 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; ...................................................................................................................... (n) verify correctness of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN),identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information;" 4.3 In terms of Regulation 10 (n), the appellant was required to undertake the complete KYC of the importer, on behalf of whom he is finding the documents to Customs. Admittedly, the appellant has taken such verification on the....
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....ing guidelines prescribed by the Central Board of Excise & Customs which are as under: S. No . Form of organisation Features to be verified Documents to be obtained 1. Individual (i) Legal name and any other names used (ii) Present and Permanent address, in full, complete and correct. (i) Passport (ii) PAN card (iii) Voter's Identity card (iv) Driving licence (v) Bank account statement (vi) Ration card Note : Any two of the documents listed above, which provides client/customer information to the satisfaction of the CHA will suffice 2. Company (i) Name of the company (ii) principal place of business (iii) mailing address of the company (iv) telephone, fax number, email address. (i) Certificate of incorporation (ii) Memorandum of Association (iii) Articles of Association (iv) Power of Attorney granted to its managers, officers or employees to transact business on its behalf. (v) Copy of PAN allotment letter (vi) Copy of telephone bill 3. Partnership firm (i) Legal name (ii) Permanent address, in full, complete and correct. (iii) Name of all partners and their addresses, in full complete a....
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.... the indicated premises, is not justifiable." 4.6 In case of HIM Logistics Pvt. Ltd. [2016 (338) ELT 725 (Tri Delhi)], following was observed: "7. We find that the main focus of allegation against the appellant which resulted in the revocation of licence is their failure to verify the presence of the importers in the given address. We have perused the provisions of Regulation 11 as well as the Board's Circular dated 8-4- 2010. It is an admitted fact that the partnership firm involved in the import of the auto parts is an existing concern, duly registered having a deed for partnership and two existing partners. The IEC copy, PAN Card, telephone bill of the firm, Voter ID of the partners, copy of the partnership deed have been seen and verified by the appellant. The allegation that the IEC was obtained by submitting forged documents has no effect on the appellant as they could only verify the correctness of the documents submitted before taking up of the work for any importer. There is no stipulation or legal requirement to physically verify the business premises or residential premises of the importer and also to have a personal meeting with the importer before taking up....
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....t [2017 (348) ELT 625 (Del) observed as follows: "This appeal by the Revenue challenges an order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) [2016 (338) E.L.T. 725 (Tri. - Del.)], whereby the adjudication and Appellate order revoking the respondent's Customs House Agent's (CHA) licence was set aside. The allegations levelled against the respondent were that as a customs" broker it had not fulfilled the obligations cast on it inasmuch as there was no proper verification of the particulars of the party which it sought to represent. The Tribunal relied upon a previous ruling Setwin Shipping Agency v. CC (General), Mumbai - 2010 (250) E.L.T. 141 (Tribunal-Mumbai), and held that in the facts and circumstances of the case, the interpretation that the respondent was under an obligation to physically verify the particulars, was misplaced. 2. This Court notices that the CESTAT construed the provisions of Regulation 11 and the Board Circular of 8-4-2010 and found that the partnership firm involved in the import of consignment was an existing concern, duly registered under a partnership deed and two existing partners and that its IEC copy, PAN Card, te....
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....ce of the authorities that after due investigation and interrogation, it had allowed its licence to be used by certain unauthorised persons for monetary consideration. After the said aspect came to light, the licence was suspended under Regulation 21(2) of the 1984 Regulations and an enquiry was held against it under Regulation 23 of the 1984 Regulations. The enquiry officer held the enquiry and submitted the report on 25-10-2005 holding, inter alia, that the misconduct alleged against the respondent that it had allowed the unauthorised persons to handle the shipping bills stood proved, and accordingly opined that the articles of charge under Regulations 12, 13(b), 13(d), 20(1)(c) and 13(n) of the Customs House Agent Licensing Regulations, 2004 (for short, "the 2004 Regulations") were established." And in para 14 and 15, Hon'ble Apex Court recorded as follows: "14. Relying on the statutory provisions, it is submitted by learned counsel for the respondent that the Tribunal has jurisdiction to confirm, modify or annul the decision. There can be no cavil over the issue that the Tribunal can dislodge or confirm or modify the order. The vesting of jurisdiction with the Tribu....