AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 125
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....the goods covered under Shipping Bill No. 3335894 dated 22,06.2020, 3335891 dated 22.06.2020, 3335913 dated 22.06.2020, 3335888 dated 22.06.2020, 3335899 dated 22.06.2020, 3335890 dated 22.06.2020, 3335911 datec 22.06.2020, 3335889 dated 22.06.2020 under Section 113(i) & 113(i)(a) of the Customs Act, 1962. (iii) In lieu of the confiscated goods mentioned at (i) above I order for a redemption fine amounting to Rs.5,00,000/- (Rupees Five Lakhs only) under Section 125 of the Customs Act, 1962 (iv) I impose a penalty of Rs, 10,00,000/- (Rupees Ten Lakhs only) under the provisions of Section 114(ii) of the Customs Act, 1962 on M/s Pixar International. (v) I impose a penalty of Rs.5,00,000/- (Rupees Five Lakhs only) under the provisions of Section 114AA of the Customs Act, 1962 on M/s Pixar International. (vi) I impose a penalty of Rs.5,00,000/- (Rupees Five Lakhs only) under the provisions of Section 114(i)fof the Customs Act, 1962 upon, Shri Nirmal Singh, Partner of M/s. Pixar International. (vii) I impose a penalty of Rs.3,00,000/- (Rupees Three Lakhs only) under the provisions of Section 114AA of the Customs Act, 1962 upon Shri Nirmal Sing....
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....ished good instead of finished goods which continue to be in their ware house. 2.3 On examination of goods on 03.08.2020 by the shed officers in presence of Appellant 1 the goods were found to be inferior quality and highly overvalued. 2.4 Investigations were initiated against the exporters in terms of the provisions of Customs Act, 1962 and the declared business premises of exporter was visited at the address provided. On visit it was found that exporters were not engaged in conducting any business form that premises and never own the same even on rent. 2.5 After completion of investigation a Show cause Notice dated 02.09.2021 was issued to the exporters and others including the appellants. Show cause notice alleged that ⮚ appellant 1 failed to perform his duties in as much as he had not verified the antecedents of exporter by visiting the business premises and thus have failed to perform the duties cast on him under Regulation 10 (d), (e), (j), (k), (m), (n) & (o); ⮚ appellant 2 failed to perform his duties in as much as he had not verified the antecedents of exporter by visiting the business premises and thus have failed to perform the du....
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....Shri Amit Kumar Singh under Section 114(iii) and 114AA of the Customs Act, 1962. 6.8.2 It has been alleged that Sh. Amit Kumar Singh, (GCard 41/2019-20) of CHA M/s Jyoti Cargo has not performed his duties in as much as he has not verified the antecedents and the business premises of M/s Pixar international and he has also not followed the provisions of Regulation 10 of CBLR, 2018. 6.8.3 As per Regulation 10(d) of the Customs Brokers Licensing Regulations, 2018 a Customs Broker shall 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 6.8.4 As per Regulation 10(e) of the Customs Brokers Licensing Regulations, 2018 a Customs Broker shall 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. 6.8.5 As per Regulation 10(n) of the Customs Brokers Licensing Regulations, 2018 a Customs Broker shall verify correctness ....
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....ocuments have been cancelled/ withdrawn by the authorities. When the authenticity/ genuineness of these documents is not doubted, it should be held that by using these documents, CHA has exercised due diligence to ascertain the correctness of the information provided by the exporter. In the absence of any mandate of personal visit to the premises, due diligence has been exercised by the CHA using these documents. CHA has neither any authority nor any means to challenge the authenticity of these documents. As such there is sufficient compliance and there is no violation of any regulation by the CHA. He has relied upon the case law of M/s Anax Air Services Pvt Limited vs. Commissioner of Customs, New Delhi- 2022 (1) TMI 115CESTAT NEW DELHI, He has also contended that the allegation of collusion of exporter and him is very serious and has not been established by the Department in the present case. There is no statement of any person indicating that either exporter or he had connived or abetted each other at any point of time. That collusion or abetment has to be established beyond any iota of doubt and in the absence of any such evidence, the charge of collusion or abetment is baseles....
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....ustoms Broker did not exercise due diligence and also did not discharge his duty as a Customs Broker with utmost efficiency 6.8.13 From the above it is evident that Shri Amit Kumar Singh has-not performed his duty diligently as provided under Customs Brokers Licensing Regulations and in addition, he aided and abetted in attempted export of mis-declared and highly overvalued goods and thus was involved in the matter for facilitation in attempted export of mis-declared / highly overvalued goods 6 8.14 Since the impugned goods as discussed supra have been held liable for confiscation under Section 113(i) and 113(ia) of the Customs Act, 1962, therefore penalty under Section 114 (iii), ibid is imposable on Shri Amit Kumar Singh, Customs Broker. He is also liable for penal action under section 114AA of the Customs Act' 1962 as he aided and abetted in submission of false documents/ information to get undue benefit of export incentives. 6.8.15 Further I find that by violating the provisions stipulated in Regulation 10 of the Customs Broker Licensing Rules, 2018 Shri Amit Kumar Singh, Customs Broker has also rendered himself liable for action under the said Ru....
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....ormation to get undue benefit of export incentives. 6.9.7 Further I find that by violating the provisions stipulated in Regulation 10 of the Customs Broker Licensing Rules, 2018 M/s Transworld Cargo & Travels, CHA has also rendered themselves liable for action under the said Rules. 6.10.1 Relied upon the following case laws for above findings regarding Customs Broker/ CHA- 6.10.2 Hon'ble CESTAT, New Delhi, Principal Bench in the case of Ms Falcon India (Customs Broker) vs Commissioner of Customs (Airport & General), New Customs House, New Delhi vide Final Order No. 50259/2022 dated 21.03.2022 held that a Customs Broker or Customs House Agent is a very important person in the transaction in the Customs House. Hence it is appointed as an accredited broker as per Regulation and is expected to discharge responsibilities under them. Violations even without interest are sufficient to take action against the Customs Broker. While it is true that Customs Broker is not expected to do the impossible, but Customs Broker is expected to act with great sense of responsibility and take care of the interest of both the client and the revenue. Customs Broker is expect....
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....sts 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 14 of the CHA Licensing Regulations lists out obligations of the CHA. Any contravention of such obligations even without intent would be sufficient to invite upon the CHA the punishment listed in the Regulations...." We approve the aforesaid observations of the CEGAT, West Zonal Bench, Mumbai and unhesitatingly hold that this misconduct has to be seriously viewed. 16. Resultantly, we allow the appeal and set aside the orders of the High Court and the Tribunal and restore that of the Commissioner. There shall be no order as to costs". 33. The above decisions lay down that the Customs Broker (or Custom House Agent) is a very important person in the transactions in the Custom House and it is appointed as an accredited broker as per the Regulations and is expected to discharge all its responsibilities under them. Violations even without intent are sufficient to take action against the appellant. While it is true, as has been deci....
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.... very important position and has to safeguard the interest of both the importer and the Customs. The Regulations ensure that the Customs Broker discharges his duties in such a way that he safeguards the interest of customs by not importing prohibited goods. The undeclared goods were found to be counterfeit products of major brand. It is unbelievable to assume that the Customs Broker had no knowledge that the address of the importer or his company's address and GST registration were fake. He ought to have verified all these before filing the Bill of Entry. Though there are duties stated in the CBLR, the said Regulation has to be read along with the provisions of Customs Act, 1962. The Regulation is intended to make the clearance of export and import in a hassle-free manner for both importer/exporter and the customs. The trust embedded in the Customs Broker who has been issued a licence cannot be used in a negligent manner so as to permit undeclared/prohibited goods in large quantities. 12. The Hon'ble jurisdictional High Court in the case of Shri Rama Thenna Thayalan (supra) observed as under:- "9. Further, it is contended that as a Customs House Agent, his....
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....er the Regulations not sufficient for the grave offence, the Customs House Agent is liable also to be proceeded under the Customs Act. There is no legal impediment to proceed against the Customs House Agent under the Customs Act besides action under the Regulations." 13. From the discussions made above, I am of the view that there are no grounds to set aside the penalty imposed under sec. 112(a) of the Customs Act, 1962 on the appellant. I do note that penalty of Rs. 50,000/- has been imposed on the appellant as per Order in Original dated 89-2020 under CBLR, 2018. Taking this into consideration, I am of the view that the penalty of Rs. 5,00,000/- imposed under section 112(a) of the Customs Act, 1962 is high and requires to be reduced. I hold that reducing the penalty to Rs. 1,50,000/- (Rupees one lakh fifty thousand only) would meet the ends of justice. The impugned order is modified to the extent of reducing the penalty to Rs. 1,50,000/- (Rupees one lakh fifty thousand only). The appeal is partly allowed with consequential relief, if any." 4.3 Penalties have been imposed upon the appellants under Section 114 (iii) and Section 114AA of the Customs Act, 1962. Section 11....
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....strongly contended that they had discharged the obligations cast on them under Regulation 10 of the Custom Broker Licensing Regulations, 2018 as they had verified the antecedents of the exporters on the basis of the documents issued to the exporter by various government agencies including IEC and GSTIN. As they verified the antecedents of exporters on the basis documents and by verifying them from the independent sources, they were not mandated as per Regulation 10 (n) to cause the physical verification of the premises of the exporter by personally visiting the same. In case of Friends Cargo Services [Final Order No. 50241 /2024 dated 13.02.2024 in Customs Appeal No. 51471 OF 2022] Delhi Bench held as follows: 9. In order to appreciate the arguments of the Learned Counsel and the Learned AR, we need to refer to Regulation 10 of CBLR, 2018 which reads as follows: "10. Obligations of Customs Broker.-A Customs Broker shall... (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 d....
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....e Customs broker is required to satisfy itself that these documents or their copies given by the client were, indeed issued by the concerned government officers OR is the Customs Broker also required to ensure that the officers have correctly issued these documents. In our considered view, Regulation 10(n) of CBLR cannot be read to mean the latter as it would imply treating the Customs Broker as one who is competent and responsible to oversee and ensure the correctness of the actions by the Government officers. It would also mean that actions by the Customs Broker under the CBLR prevail over the actions by officers under the Foreign Trade (Development and Regulation) Act, 1992 (under which the IEC is issued by DGFT) and the Central Goods and Services Tax Act (or state GST Act) (under which the GSTIN is issued by the GST officers). In our view this is not a correct construction of the legal provision. Therefore, verification of certificates part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as it satisfies itself that the IEC and the GSTIN were, indeed issued by the concerned officers. This can be done through online verification, comparin....
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....tion as they deem fit. However, the Customs Broker cannot sit in judgment over the certificate or registration issued by a Government officer so long as it is valid. In these cases, there is no doubt or evidence that the IEC and the GSTIN were issued by the officers. So, there is no violation as far as the documents are concerned." 11. Regulation 10(n) requires the Customs Broker to verify the identity of the client using reliable, independent, authentic documents, data or information. In other words, he should know who the client is and the client cannot be some fictitious person. As per the Regulation, this identity can be established by independent, reliable, authentic: a) documents; b) data; or c) information. Any of these methods can be employed by the Customs Broker to verify the identity of its client. It is not necessary that the CB appellant has to only conduct a physical verification or launch an investigation. So long as the CB can find documents which are independent, reliable and authentic to establish the identity of his client, this obligation is fulfilled. In addition, under Regulation 10(n) the Customs Broker is required to verify the functioning of the cl....
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.... captured and form part of IEC Registration of an importer are aspects which have to be verified by the customs authorities themselves. Moreover, it is also not the case of the Department that IEC, GSTIN, PAN & Authorized Dealer Code of the exporters were not genuine. In the aforesaid backdrop the Court in Kunal Travels (supra) held that the obligation of the CHA under Section 13 (e) of the CHALR, 2004 cannot be stretched to it being obliged to undertake a further background check of the client. As such, as a Customs Broker, the petitioner cannot be held W.P. (C)15808/2022 Page 22 of 22 liable because exporters were not traceable, after the issuance of 'Let Export Orders' and export of the goods out of the country." 4.7 Further I note that impugned order returns a finding that the appellants aided and abetted in attempted export of misdeclared highly over valued goods for the reason that they failed to verify the premises of exporters physically and discharged the obligations cast on them under Regulation 10 diligently. However even if it is held that appellants have failed to discharge their duties diligently then also the same cannot be said to be aiding, abetting or conniving....
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....Hon'ble Court has analyzed the phrase "good faith" and has given protection to Government servants discharging their statutory duties. Further, I find that the entire onus was of the Department to bring on record some cogent evidence to prove the positive act of alleged abeting on part of the appellant. But there is nothing produced on record about any nexus of the appellant with the allegations of collusion and connivance with Sujjan Kumar for abeting the over-valuation of goods exported. Commissioner, Central Excise, New Delhi vs. MI Khan - 2000 (120) ELT 542 of this Tribunal is another decision where it has already been held that unless ingredients for proving the charge of abetment have been brought out in the Show Cause Notice and when there is no admission by the Custom Officer for alleged abeting, penalty under Section 114 cannot be imposed. Though the Adjudicating Authority below has taken a plea that the appellant in his statement has admitted for the alleged offence but the perusal of the document on record shows that the admission of appellant is only to the fact that the inquiry conducted by him with his Co-Inspector Naresh Kumar is an improper inquiry that too afte....
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....114A of the Act is applicable only when there is sufficient evidence about prior knowledge of wrong doing or existence of deliberated intend (malafide). It also provides for imposition of penalty for furnishing incorrect or false declarations and that such declaration should also be intentional with prior knowledge. 13. In view of the entire above discussion, it has been held that the appellant since was unaware of the mandatory registration while importing branded cosmetics, as required by the Cosmetic Rules, 2010 being very recent in time. The malafide intent cannot be attributed to him. Onus was otherwise of the Revenue. There is no cogent positive evidence to prove the contrary. There might be intentional omission on part of importer but same cannot be presumed against the CHA unless & until proved. Hence, it is held that the Commissioner (Appeals) has wrongly imposed penalty under Section 114AA of Custom Act, 1962 upon the Appellant CHA. The order is, accordingly, hereby set aside appeal stands allowed." 4.9 In case of Him Logistics [Final Order No. 50586/2025 dated 05.05.2025 Customs Appeal No. 53566 Of 2018] Delhi Bench held as follows; "13. In the insta....