TaxTMI 
TaxTMI 
2023 (11) TMI 378
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons (CBLR), 2018. In an investigation initiated by Special Intelligence and Investigation Branch (SIIB) of Air Cargo Complex (ACC), Mumbai, a case was registered against one importer M/s M.S. Trading Company, Delhi, who had imported 'hearing aids' by over valuation of imported goods for the purpose of money laundering. In connection with such imports, SIIB investigation noted that the appellants CB had filed Bill of Entry (B/E) No. 5001004 dated 30.01.2018, and thus were involved with certain violations of CBLR, 2018 and the same was informed to the jurisdictional Principal Commissioner of Customs (General), New Custom House, Mumbai-I by sending an offence report/letter in F. No. SIIB(I)/Gen-100/2017-18 ACC(I) dated 22.02.2019 along with Show Cause Notice (SCN) dated 19.02.2019. 2.2. On the basis of such offence report received from SIIB, ACC, Mumbai, jurisdictional Principal Commissioner of Customs (General), Mumbai-I had concluded that there is a prima facie case against the appellant for having contravened Regulations 10(d), 10(e) and 10(n) of CBLR, 2018. Accordingly, the said Principal Commissioner of Customs, had suspended CB license of the appellants under Regulation 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere not aware of the overvaluation of the imported goods. The request for first check assessment was made by the appellants CB and it is only during such examination, the department itself came to know about overvaluation of goods. Hence, the intention of CB is bonafide and there is no false declaration of value; as there is no specific brand name and there is no requirement to declare unbranded nature, and thus he claimed that the appellants are not at fault and it cannot be said that they have violated Regulations 10(e). They also submitted that the appellants CB had verified the antecedents of the importer to the best of their capability by obtaining KYC documents such as IEC, PAN, Bank certified letter for registered address of importer, account held with Indian bank and verification of signature of the proprietor. Hence they claimed that there is no relevancy of the fact that the Customs broker did not physically verify the presence of importer/IEC, and the same had caused the violations under CBLR, 2018. 3.2. In support of their grounds the appellants cited the following decisions: (i) Anax Air Services Pvt. Limited Vs. Commissioner of Customs (Airport & General),....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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; (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; .... (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;" 5.3. We also find that the Principal Commissioner of Customs on the basis of the conclusion arrived in the impugned order, that as the appellant Customs broker did not have any interaction with their clients and thus there was no possibility of the CB to advise the clients to comply with the provisions of the Customs Act; as the appellants CB declared B/E of high value of imported goods without verifying the valuation aspect and without insisting on the declaration of bra....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... should be examined before assessment, giving reasons for the same. Wherever required, samples are drawn in the examination area for chemical analysis, verification or any other purposes. 4.2 After assessment by the appraising group or for cases where examination is carried out before assessment, bill of entry needs to be presented for registration for examination of imported goods in the import shed. The proper officer of customs examines the goods along with requisite documents. The shipments, found in order are given clearance order by the proper officer of customs in the Import Shed." Further, the appellants CB were not aware of the brand of the imported goods as there was no such mention in the invoice. Precisely, for this reason the appellants CB had sought for examination of the goods on First Check basis by submitting the request to the Customs Appraising Group. 6.2. It is also a fact that the Customs Appraising Group-5 'B' upon perusal of the samples had come to a reasonable belief that the imported goods are of inferior quality and the value declared is not commensurate with the goods. Thus, a detailed inquiry was initiated on the above basis by SIIB (Impor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e discussed in the impugned order which have not been verified for its correctness by the appellants are the 'brand name' and 'value of goods'. It is nowhere mentioned in the impugned order that there is any legal requirement of mentioning of 'brand name' for the purpose of assessment of goods under the Customs Act, 1962 or any other law and there was a failure on the part of the appellants in this regard. We find that the definition of the term 'assessment' under the Customs Act, 1962 during the relevant time of imports did not mention any such requirement; even the amended definition under Section 2(2) ibid, which came into force on 29.03.2018, which is subsequent to the event of imports in the present case, only mentions about quantity, weight, volume, measurement or other specific factor which affects the duty as the reference details in respect of imported goods to be considered for assessment of imported goods. If the imported goods are prescribed with certain specified rate of duty or exemption has been granted to imported goods, depending upon whether they carry a 'brand name' or 'unbranded', then there may be a need to determine this aspect. It is also a fact that in the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Act, 1962 (52 of 1962) relating to confiscation, penalty and prosecution shall apply to cases where wrong declaration, information, statement or documents are furnished under these rules. Rule 3. Determination of the method of valuation . - (1) Subject to rule 12, the value of imported goods shall be the transaction value adjusted in accordance with provisions of rule 10; (2) Value of imported goods under sub-rule (1) shall be accepted: Provided that - (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (b) the sale or price is not subject to some condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bid. We do not find any such evidence or fact indicating that there was a mis-declaration of value and the value was re-determined as per the above legal provisions. There is only a mention that the market inquiry was conducted by the department and it revealed that the actual value of the consignment is Rs.15,000/- as against declared value of Rs.59,79,521/-. We find that such an allegation at the show cause notice stage and later at the findings stage in the impugned order requires factual details or evidence to state that there was mis-declaration and the same is attributable to the appellants CB, in order to invoke the violation of due-diligence having not been undertaken by the appellants. We find no such evidence and on the contrary the declaration made in the bill of entry corresponds to the value declared in the commercial invoice. Thus, we find that the conclusion arrived by the Principal Commissioner of Customs (General) in the impugned order that the appellants have violated Regulation 10(e) ibid is not sustainable. 6.6. We find from the records, that the appellants have verified the existence of the importer through the certificate of Importer-Exporter Code issued by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....suffice." We find that the above CBIC circular clearly explains the provision of CBLR/CHA Regulations which require the Customs Brokers to verify the antecedents, correctness of Import Export Court (IEC) Number, identity of his client and the functioning of his client in the declared address by using reliable, independent, authentic documents, data and information. The said guidelines provide for the list of documents that is required to be verified and that are to be obtained from the client importer/exporter. it is also provided that any two documents of among such specified documents is sufficient for fulfilling the obligation prescribed under Regulation 10(n) of CBLR, 2018. We find that in the present case, the appellants CB had obtained the KYC documents and submitted the same to the Customs Department. Thus, we do not find any legal basis for upholding of the alleged violation of CBLR, 2018 by the appellants in the impugned order on the above issue. 6.8. We find that in the case of M/s Perfect Cargo & Logistics Vs. Commissioner of Customs (Airport & General), New Delhi 2021 (376) E.L.T. 649 (Tri. - Del.), the Tribunal had decided the issue of KYC verification of the imp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ave been done by the customs authorities." 6.9. We also find that as regards the timelines to be followed in the entire process of adjudication of the suspension/revocation of CB license under CBLR, 2018 by Customs authorities, the Hon'ble High Court of Bombay has laid down certain guidelines for its interpretation in the case of Principal Commissioner of Customs (General), Mumbai Vs. Unison Clearing P Ltd., 2018 (361) E.L.T. 321. The relevant portion of the judgement in the above case is extracted below: "The whole purpose of the CBLR-2013 being to frame a time line so that undue delay in the proceedings can be avoided, and the balance will have to be struck between the strict adherence to the said time schedule to such an extent that even a day's delay would prove to be fatal and render the entire action invalid and on the other hand, to grant such a discretion to the revenue to continue the said action of suspension of licence for an indefinite period depriving the Customs brokers of their right to carry on business on the basis of the licence, on a spacious ground that the charges levelled against him are being enquired into. Neither of these two extreme situations ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that when such time limit is crossed, the period subsequently consumed for completing the inquiry should be justified by giving reasons and the causes on account of which the time limit was not adhered to. This would ensure that the inquiry proceedings which are initiated are completed expeditiously, are not prolonged and some checks and balances must be ensured. One step by which the unnecessary delays can be curbed is recording of reasons for the delay or non-adherence to this time limit by the Officer conducting the inquiry and making him accountable for not adhering to the time schedule. These reasons can then be tested to derive a conclusion whether the deviation from the time line prescribed in the Regulation, is "reasonable". This is the only way by which the provisions contained in Regulation 20 can be effectively implemented in the interest of both parties, namely, the Revenue and the Customs House Agent." 7.1. In the instant case, the alleged offence in importation of goods took place in respect of Bill of Entry dated 30.01.2018 which was reported by a letter/offence report dated 22.02.2019 and on that basis the jurisdictional Principal Commissioner had suspended CB li....