TaxTMI 
TaxTMI 
2024 (5) TMI 280
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere found to be mis-declared and consequently seized. By Letter dated 17.05.2022 from Customs (Preventive), it was found that the firm did not exist at the registered address and the IEC was issued to the firm on the basis of fake PAN. Statement of Shri Sushil Gautam and Shri Rattan Singh Bisht were recorded on 29.03.2022 and 9.05.2022, and the relevant paras thereof are quoted below:- Statement of Shri Sushil Gautam dated 29.03.2022:- "I state that Shri Mahesh Ramji Bhanushali approached me, who met at ICD, Tughlakabad customs office and requested me for filing the documents for the import of said consignments and provided me the details of the said consignments viz. invoices, packing list, Bill of lading and copy of IEC etc. I further state that Shri Mahesh Bhanushali had shown me all the original documents of above-mentioned consignments before filing the bill of Entry of the same. On being asked about he KYC of the customer, I state that we have taken the KYC of the importer i.e., M/s.GIGA Export Services, New Delhi (IEC No.ETIPK3912A) from Shri Mahesh Bhanushali and tallied with the original documents. On being asked that whether I had verified the firm's add....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... got fail and I am to take her to hospital every two days for dialysis. I was in the thought that I can earn more incentives in the order of 14 containers, I accept the order instantly and I am hiding nothing in this statement. On being asked, I state that I do not have any knowledge about the mis-declaration of the goods in the above said Bill of Entry before the examination conducted by Customs. On being asked, that why your G-Card Licence should not be proposed to revoke as the gross mis-declaration was found in the imported consignment under above said Bill of Entries, in this regard, I state that I did not have any knowledge about the mi-declaration found in the above said Bill of Entries before the examination of the said goods. I further state that the earlier track record of the importer was also good and we file the Bill of Entry only as per documents provided by the importer and we do not know about the goods of the container and in the above specific case I also do not know about the goods and I filed the Bill of Entry as per documents provided by Shri Mahesh Bhanushali and past track record of M/s. GIGA Export Services. I further state that I am the sole bread earner of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oned in the above said Bills of Entry were totally mis-declared and the valuation of the misdeclared goods were done by Government Empanelled Valuer/CE, which arrives at Rs.3.65 Crores approx., in this regard, I state that as I did not know about the same and Shri Sushil Gautam G-Card or Shri Mahesh Ramji Bhanushali, beneficiary owner of the goods may better comment on it. On being asked, I state that I have regularly asked my G-card holder to verify the KYC of the importer but in this case as informed, G-Card has not verified the KYC. I further state that on faith, I have given the access to file/authority to file the Bills of Entry as well as shipping Bill but in this case only he did not comply my directions and did not inform anything about either before filing of Bills of Entry or after examination of goods. I further state that Shri Sushil Gautam is regularly did his job very carefully and I was of the belief that he will never do this kind of mistake and I did not monitor his work carefully." 3. In terms of regulation 16(1) of the Customs Brokers Licensing Regulations, 2018 [CBLR], the license of the appellant was suspended on 4.07.2022 and the same was confirmed under Re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ereof. 5. Shri Rajesh Singh, the learned Authorised Representative for the Revenue reiterated the findings of the Adjudicating Authority and submitted that :- "Statement dated 09.05.2022 of Shri Sushil Gautam, G Card and Shri Rattan Singh Bisht, F-Card holder of Customs Broke company was recorded where he stated that he did not verified the KYC and address of the importer firm. Further, Shri Rattan Singh Bisht F-card holder stated that he had not verified the KYC and address of the importer firm and failed to monitor the activities of his employee, i.e. Shri Sushil Gautam. Both Shri Sushil Gautam and Shri Rattan Singh Bisht were arrested on 09.05.2022 and produced before CMM, who granted judicial custory for both of them. The application of both Shri Sushil Gautam and Shri Rattan Singh Bisht for bail were rejected by CMM initially, Patiala House Court but later got conditional bail from Session Court. Copy of PAN and Adhar of Shri Direndra Kumar the IEC holder, submitted by Shri Sushil Gautam is different from PAN and Adhaar submitted by Shri Dhirendra Kumar as the photograph and signature on Pan card is different and photograph on Adhaar Card is different in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed knowledge about the past antecedents of the importer where the earlier consignments through other CHAs were cleared and therefore believed the importer to be genuine. Verifying the earlier track record of the importer was a valid step towards discharge of his obligation under the regulations. Reliance is placed on Perfect Cargo & Logistics Vs. C.C (Airport & General), New Delhi - 2021 (276) ELT 649 (T-Del.), where it was observed that the appellant did obtain two documents and neither the Circular nor the Annexures require any physical verification of the premises. It is not the case of the Department that the documents obtained were forged. Thus, it is not a case where the CB had not obtained the requisite documents or that he did not verify the said documents in discharge of his obligations under the regulations. 8. From the submissions of the Revenue, we do not find that the IEC produced is incorrect/invalid rather the allegation is that IEC has been issued on the basis of fake PAN Card. Considering the judicial pronouncement which we will discuss later, no fault can be attributed on the appellant as the responsibility to issue IEC is on the DGFT and therefore, if there is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iable, independent, authentic documents, data or information. This responsibility does not extend to physically going to the premises of each of the exporters to ensure that they are functioning at the premises. When a Government officer issues a certificate or registration with an address to an exporter, the Customs Broker cannot be faulted for trusting the certificates so issued. It has been held by the High Court of Delhi in the case of Kunal Travels - 8 that "the CHA is not an inspector to weigh the genuineness of the transaction. It is a processing agent of documents with respect of clearance of goods through customs house and in that process only such authorized personnel of the CHA can enter the customs house area........ It would be far too onerous to expect the CHA to inquire into and verify the genuineness of the IE code given to it by a client for each import/export transaction. When such code is mentioned, there is a presumption that an appropriate background check in this regard i.e., KYC, etc. would have been done by the customs authorities....." (emphasis supplied). 22. The Customs Broker is not Omniscient and Omnipotent. The responsibility of the Customs Br....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Union territory. The question which arises is has the Customs Broker to satisfy himself that these documents or their copies given by the client were indeed issued by the concerned government officers or does it mean that the Customs Broker has to ensure that the officers have correctly issued these documents. In our considered view, Regulation 10(n) does not place an obligation on the Customs Broker to oversee and ensure the correctness of the actions by the Government officers. Therefore, the verification of documents part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were, indeed issued by the concerned officers. This can be done through online verification, comparing with the original documents, etc. and does not require an investigation into the documents by the Customs Broker. The presumption is that a certificate or registration issued by an officer or purported to be issued by an officer is correctly issued. Section 79 of the Evidence Act, 1872 requires even Courts to presume that every certificate which is purported to be issued by the Government officer to be genu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....PAN card issued etc., certainly qualify as such documents. However, these are not the only documents the Customs Broker could obtain; documents issued by any other officer of the Government or even private parties (so long as they qualify as independent, reliable and authentic) could meet this requirement. While obtaining documents is probably the easiest way of fulfilling this obligation, the Customs Broker can also, as an alternative, fulfill this obligation by obtaining data or information. In the factual matrix of this case, we are fully satisfied that the appellant has fulfilled this part of the obligation under Regulation 10(n). 30. The fourth and the last obligation under Regulation 10(n) requires the Customs Broker to verify the functioning of the client at the declared address using reliable, independent, authentic documents, data or information. This responsibility, again, can be fulfilled using documents or data or information so long as it is reliable, independent and authentic. Nothing in this clause requires the Customs Broker to physically go to the premises of the client to ensure that they are functioning at the premises. Customs formations are only in a f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as a Revenue official who is empowered to investigate and enquire into the veracity of the statement made orally or in a document. If one interprets Regulation 13(o) reasonably in the light of what the CHA is expected to do, in the normal course, the duty cast is merely to satisfy itself as to whether the importer or exporter in fact is reflected in the list of the authorized exporters or importers and possesses the Importer Exporter Code (IEC) Number. As to whether in reality, such exporters in the given case exist or have shifted or are irregular in their dealings in any manner (in relation to the particular transaction of export), can hardly be the subject matter of "due diligence" expected of such agent unless there are any factors which ought to have alerted it to make further inquiry. There is nothing in the Regulations nor in the Customs Act which can cast such a higher responsibility as are sought to be urged by the Revenue. In other words, in the absence of any indication that the CHA concerned was complicit in the facts of a particular case, it cannot ordinarily be held liable." 11. The observations in the impugned order that the CB has failed to verify correctness of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion or mens-rea on the part of the CB to act fraudulently. We are, therefore, of the considered view that the appellant cannot be held liable for any mis-declaration of the goods. The allegations of mis-declaration of valuation has been dealt by the Tribunal in M/s. Trinity International Forwarders Vs. Commissioner of Customs (Preventive) [Final Order No.50978/2023 dated 02.08.2023] , where the observations have been as under: - "11. Thus, while the transaction value is decided between the exporter and importer, value for determining the duty under the Customs Act is a part of assessment. The power to assess including determining the value lies with the importer/exporter (selfassessment) or with the proper officer (re-assessment). The Customs Broker has neither any authority nor any responsibility to assess the value of the imported goods or export goods. 12. In all the Shipping Bills, exports were allowed by the Customs in the normal course. It is only the subsequent intelligence and investigations by the DRI which revealed the alleged over valuation of exports. The Customs Broker is neither authorized under the Act nor is obliged under the CBLR to redetermine th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Commissioner has merely quoted the findings of the enquiry officer and the reply made by the appellant and there is no discussion as to whether contraventions are justified in the facts of the case. The impugned order is therefore bad and unsustainable. 17. Having taken the view that the appellant cannot be fastened the liability of not discharging the obligation under Regulation 10(n) of CBLR and also for mis-declaration/undervaluation in view of the facts of the present case and the judicial pronouncements, we may now examine the imposition of consequential punishment since we have upheld the contravention of Regulation 13(12) by the appellant. It has been repeatedly observed that the revocation of license is a serious punishment affecting the livelihood of a person for all times to come and therefore only in extreme circumstances such serious punishment should be resorted to. The law on doctrine of proportionality of punishment on the CHA under the Regulations have been dealt in the case of Ashiana Cargo Services Vs. Customs - (2014) 302 ELT 161, where the Delhi High Court observed that Regulation prescribe two penalties, suspension of the licence for a particular period of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....justify the revocation of license which is extremely harsh and unjustified in the given circumstances when the license of the appellant was suspended on 04.07.2022 and since then he is deprived of his livelihood. We therefore, set aside the revocation of the CB license, however uphold the forfeiture of security deposit and imposition of penalty. 19. Before parting with the said order, we would like to take note of the order-in-original dated 29.12.2023 relating to the present bill of entries and findings recorded revealed that Shri Mahesh Bhanushali was the master mind in importing the restricted goods and the sole beneficial owner of M/s. GIGA Export Services. He knowingly submitted false declaration in the bill of entries, authorisation letter, documents used in creating fake firm for the purpose of smuggling of impugned goods, which were restricted items and required BIS certification. On misdeclaration of goods, Shri Mahesh Bhanushali had submitted that wrong shipments have been sent by their overseas suppliers, which was found to be false as there were different overseas suppliers and it is impractical that all the five overseas suppliers would supply wrong goods. The Adjud....