TaxTMI 
TaxTMI 
TaxTMI 
2025 (5) TMI 2018
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....e goods, as 99.15 MP of Base Oil under HSN Code no. 27101971,as imported from Stanley Trading LLC, Dubai, UAE. Based on the said information the said consignment was kept on hold and was examined. It was found that there were 738 drums: i. Only 80 drums were found containing oily liquid (Base Oil) in quantity of 14.383 MT with ascertained value of Rs. 6.17 lakhs. The oil was meant for concealment of the drums containing Areca Nuts ii. Remaining 658 drums were found containing Areca Nuts in split form weighing 83.352 MT with ascertained value of Rs. 5.71 crores 2.1 The consignment was put on hold. During the course of enquiry, it was gathered that the declared premises of the importer firms as per GSTIN and IEC were different and the importer was found non-existent. The goods were accordingly seized. During further enquiry it was gathered that the said BOE was filed by the appellant through F-Card holder Shri Rishi Raj Singh Chauhan. Mr. Chauhan's statement was recorded under section 108 of Custom Act, 1962, who acknowledged about filing the said bill of entry however with the mention that he received the reference about the importing firm and all the KYC documents from a freig....
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....d by the Central Board of Excise & Customs through their circular No. 502/2/2008 dated 08.04.2010. As per those instructions, in case of an Individual/ proprietor, any two documents mentioned in the said circular are sufficient for the purpose. It is mentioned that appellant had taken PAN Card and bank account statement from importer M/s Digen Traders which fulfils the criteria mentioned in the circular. 4.1 Learned counsel further mentioned that it was appellant only who requested first check at the time of filling of BOE i.e. 5 days before the DRI put the cargo on hold which proves the innocence of appellant and fair working as a customs broker. The order under challenge wrongly mentions that "The said facts about non- compliance of CBLR obligation were accepted by Shri Rishi Raj Singh Chauhan, the F card holder". The only thing appellant had accepted in the statement is that the appellant did not visit the premises of M/s. Digen Traders. This cannot be the contravention of any Regulation under CBLR 2018 as it is the settled legal position that a customs broker is not obligated to physically verify the premises of the client and custom broker cannot be asked to keep a vigil on t....
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....the relevant time. These were the significant lapses. 8. It is further submitted that the customs broker knowingly facilitated fraudulent imports by filing "benami" bills of entry and failed to report the ongoing undervaluation practices. Though the appellant has claimed ignorance but the evidence showed active collusion. Based on these submissions and relying upon the following decisions, learned Authorized Representative has submitted that the court highlighted that even unintentional contraventions warrant punitive action to uphold the integrity of customs procedures : 1. M/s Swastik Cargo Agency versus Commissioner of Customs, New Delhi; 2. M/s Falcon India (Customs Broker) versus Commissioner of Customs (Airport & General) New Delhi; 3. M/s Sriaanshu Logistics through Proprietor versus Commissioner of Customs (General); 4. Commissioner of Customs vs K.M. Ganatra & Co; 5. Sri Kamakshi Agency versus Commissioner of Customs, Madras; 6. M/s SKH Freight Logistics Pvt. Ltd. versus Commissioner of Customs, (Airport & General) New Delhi; 7. M/s Ananya Exim versus Commissioner of Customs (Airport & General), New Delhi. Accordingl....
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....h read as follows: 10(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; 10(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; 10(n) verify correctness of Importer Exporter Code (IEC) number, Goods and Service 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; and 14. It is proven fact on record that the goods imported declared as 738 drums containing „Base Oil'. However, on examination only 80 drums were found containing base oil. Remaining 658 drums were found container Arica Nuts. This fact itself is sufficient to reveal that the appellant/custom broker has failed to ascertain the correctness of actual declaration of the goods and has failed to advise the importer that he is bound to declare the actual classification. Following facts are also ....
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....for appellant has relied upon the decision of this Tribunal Kolkata Bench in the case of M/s Ayushi Logistic Company (supra), wherein it was held that once the customs broker has filed the bills of entry on the basis of documents given by the importer, he is not expected to ascertain the correctness of declaration made by the importer before filing of bills of entries. However, we observe that irrespective of the said settled position under the statute as well as vide the several decisions, in case there is evidence showing that the Customs Broker was aware of the mis-declaration of the goods in the documents submitted and/or if there is cogent evidence about absence of due diligence on part of the importer before filing of bills of entries, the said case law will not be applicable to such cases. In the present case also, we observe that the appellant was handling the first consignment of the importer of M/s Digen Traders. Admittedly, the appellant was not contacted by the importer himself. There was no authorization of the importer in favour of appellant till he filed the impugned bill of entry. Above all, the appellant itself has sought clearance on first check basis which means&....
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.... diligence.) 18. The CBLR 2018 also defined a Custom Broker. Regulation 2(c) thereof defines customs broker as a person licensed under these regulations to act as an agent for the transaction of any business relating to the entry or departure of conveyances or the import or export of goods at any custom stations. Regulation 10 thereof provides for various obligations to be met with by the said customs broker. Hon'ble Apex Court has appreciated the status of the customs broker in the case of CC Vs. KM Ganatra - 2016 (332) ELT 15 (SC), wherein it was held as follows: "The CHA occupies a very important position in the Customs House. The Customs procedures are complicated. The importers have to deal with a multiplicity of agencies viz. carriers, custodians like BPT as well as the Customs. The importer would find it impossible to clear his goods through these agencies without wasting valuable energy and time. The CHA is supposed to safeguard the interests of both the importers and the Customs. A lot of trust is kept in CHA by the importers/ exporters as well as by the Government Agencies. To ensure appropriate discharge of such trust, the relevant regulations are framed. Regulation 1....
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.... punishment meted out by the disciplinary authority, viz., the Commissioner unless it shocks our conscience. In this case, it does not." 20. We have perused the order suspending the appellant's license, it was observed that : "It has been admitted by Shri Rishi Raj Singh Chauhan the F card holder of M/s Sagar Shipping Services that the Bill of Entry 9892525 dated 30.01.2024 was filed under his CHA code ALRPC8469PCH002 without verifying the authenticity of the KYC documents and existence of Importer. We have also perused inquiry report subsequent to the order of suspension of appellant's license. It was found as follows: 1. Violation of Regulation 10(d): * Appellant did not inform the Customs Department about non- compliance or discrepancies in the importer's documentation. * No proactive steps taken to verify the mis-declaration of goods. * Hence, it was concluded that: "The Customs Broker, by failing to highlight discrepancies in the importer's documents, has breached Regulation 10(d). The lack of initiative to report or rectify the mis- declaration undermines compliance with the Customs Act." 2. Violation of Regulation 10(e): * Failure to exercise due diligence in....