TaxTMI 
TaxTMI 
2025 (12) TMI 568
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.... garments to UAE from ICD Tughlakabad. On examination by the officers of Customs Preventive, it was found that the goods were mis-declared by the exporter and other discrepancies were found as follows: (a) The description of the goods was "Mens knitted hoody with zip made of branded cotton and MMF" whereas the tags on the garments showed that they were "100% polyester"; (b) The declared value was Rs. 4,23,13,016/- whereas the market value of the goods as per the inquiry conducted by the SIIB officers was only Rs. 75,27,960/-; (c) The exporter as well as its suppliers as indicated in the documents were not found at their addresses indicated in the GST registration. Therefore, GST registration of the exporters were cancelled suo moto by the GST officers with effect from 07.02.2023 whereas the shipping bills were filed on 11.12.2023; (d) It was also found that as per statement of the G-card holder of the appellant, the shipping bill was filed on 11.12.2023 and they initiated exporter verification on 13.12.2023 i.e., after filing the Shipping Bill; (e) The Joint Commissioner of Customs, ICD TKD issued a show cause notice to the exporter on 2....
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....gistration of the exporter was found cancelled suo-moto with effect from 07.02.2023, whereas the shipping bills were filed on 11.12.2023. Thus, it creates doubt on the part of the CB, that how they obtained authorization from a non-existing firm." 8. The report of the Inquiry Officer regarding this regulation is as follows: "(i) As regards to the first issue, I observe that it is evident that during the course of investigation by the SIIB officials, no authorization from Exporter in favour of CB were found during proceedings of investigation, further, neither the exporter nor suppliers were found existing at their declared places of business. Also, the GST registration of the exporter was found cancelled suo-motto with effect from 07.02.2023. whereas the shipping bills were filed on 11.12.2023. Thus, it clearly shows that the CB obtained authorization from a non-existing firm to deceive the department. (ii) Further I find that under his submission the CB argues on the ground that before proceeding to file the impugned S/B he had verified all the KYC details of the exporter but the CB failed to substantiate any allegations that are made under the said Regulation....
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.....2.3. I finds that the GST registration of the exporter, M/s Felicity International, was cancelled suo-motu with effect from 07.02.2023, whereas the shipping bills were filed by the CB much later on 11.12.2023. This discrepancy strongly suggests that the CB could not have possibly obtained a valid authorization from a non-existent entity whose GST registration was already cancelled." 10. The submission of the learned counsel for the appellant is that the appellant had, indeed, obtained an authorization from the exporter before filing the shipping bill along with all the KYC documents. A copy of the letter of authorization given by the exporter is placed at page no. 189 of the appeal, and the KYC documents are annexed at page 190-209 of the appeal. The authorization letter is dated 01.12.2003 and admittedly the shipping bills were filed on 11.12.2023 after the authorization. The SCN alleged that the appellant had not obtained an authorization from the exporter because the SIIB officers could not find the authorization at the time of investigation. Further, the SIIB officers also found that the appellant and its suppliers were not available at their places of business as per the G....
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.... 10(d) which reads as follows: "10. Obligations of Customs Broker.- A Customs Broker shall - (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;" 15. The SCN records the finding as a reason for alleging that the appellant had violated regulation 10(d). "In the instant case the goods were declared as "Mens knitted hoody with zip made of blended with cotton and MMF" whereas hoody item was having tags on which it was mentioned '100% polyster' and the value of the goods was declared as Rs.4,23,15,016/-, whereas the value ascertained by market enquiry conducted by the SIIB officials has been found to be Rs. 75,27,960/-, which was just 17.79% of the FOB value declared by the exporter. Thus, it appears that the CB has not advised his client properly whiling filing shipping bill of misdeclaration goods instead assisted the exporter in misdeclaration of value of goods." 16. The inquiry officer recorded the finding regarding viola....
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....cts gross negligence, if not collusion, and renders the CB liable for action under Regulation 14 of the CBLR, 2018 for failure to uphold compliance responsibilities as per Regulation 10(d)." 18. We find from the above that the case of the department is that since the exporter had mis-declared goods description and the value of the goods, it proves that the appellant had not advised the exporter to follow that provisions of the Act, other allied acts and Regulations. This logic is untenable. There is no evidence whatsoever as to what the appellant had advised or not advised the exporter. It is perfectly possible that the appellant had advised the exporter to follow the Act and Rules but the exporter still mis-declared the goods. It must also be noted that the Customs Broker is a processor of documents and he has no right to either examine the goods or determine their value or take part in assessment in any way. Only the exporter knows the nature of goods, quantity, value etc. The officer can verify the same and also open and examine the goods. The appellant Customs Broker has no such authority. 19. All that can be expected from the Customs Broker is that he files the Shipping ....
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....ercise 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. Hence, I found this article of charge is to be established/ proven against the CB." 23. The Commissioner recorded his findings as follows: "17.4. As per Regulation 10(e) of the Customs Brokers Licensing Regulations, 2018, it is the duty of the Customs Broker (CB) to exercise due diligence to ascertain the correctness of any information provided to a client in relation to the clearance of cargo. However, in the present case, the CB was evidently aware that the description and declared value of the goods were incorrect, yet he ignore to exercise due diligence to ascertain the correctness of any information provided to a client. The CB, instead of verifying the authenticity of the product description and value declared by the exporter, facilitated the filing of the shipping bill with knowingly incorrect particulars. His failure to exercise due diligence and his silence despite being aware of the misdeclaration amounts to gross negligence and is in direct violation of Regulation 10(e). Such conduct warrants ap....
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....ing reliable, independent, authentic documents, data of information; that they 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 and that 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 Customs Authorities. However, in the instant case, the Customs Broker/ M/s Silverline Global Freight Private Limited failed to fulfil his obligations, I also find that the Custom Broker failed to provide any genuine contact details of Sh. Gurmeet Singh, proprietor of M/s Felicity International. (iii) Similarly, I also observe that contention of the notice via submission is not only a poor attempt to absolve himself of his obligation/responsibilities but also reflected lack of understanding of the obligations cast upon him by the provisions of law. (iv) Hence after going through the case records, statements and submissions made by the Customs Broker at the time of personal hearing I observe that the said Custo....