TaxTMI 
TaxTMI 
2026 (1) TMI 666
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.... received consequent to receipt of intelligence by Directorate of Revenue Intelligence, Sub-Regional Unit, Vapi and resultant search operations conducted by them along with other field formations about mis-utilization of Advance Authorization Scheme by certain importers viz., M/s Ramniklal & Sons, Mumbai along with their supportive manufacturers, whose consignments were cleared by appellants CB by filing Bills of Entry (B/Es) No. 2589579 dated 25.07.2017; B/E Nos. 2664083 & 2664086 both dated 31.07.2017 and B/E No.2801230 dated 10.08.2027. 2.2. On the basis of such offence report received from DRI, the jurisdictional Principal Commissioner of Customs (General), Mumbai-I had concluded that there is a prima facie case against the appellants for having contravened Regulations 10(a), 10(d), 10(e), 10(m) and 10(n) of CBLR, 2018 [earlier Regulations 11(a), 11(d), 11(e), 11(m) and 11(n) of CBLR, 2013]. Accordingly, he had immediately suspended the CB license of the appellants under Regulation 16(1) ibid, vide Order No. 45/2020-21 dated 26.02.2021; and such suspension was continued vide Order No. 08/2022-23 dated 11.05.2022 pending conduct of regular inquiry proceedings; further t....
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....ere is no ground to invoke the claim that the CB appellant had failed to exercise due diligence in ascertaining the correctness of information in imparting the same to their client. In respect of allegation against the CB for violation of Regulation 11(m) ibid that he did not discharge his duties with utmost speed and efficiency, he stated that the appellant CB had taken all necessary precautions for expeditious clearance of goods, whereas the allegation against the importer is that they diverted duty free material after its import in the local market without payment of customs duty. Hence, the appellants CB is not responsible for such post import activity which was done without their knowledge or involvement by the importer. As regards violation of Regulation 11(n) ibid he stated that the appellants CB had verified the functioning of their client at the declared address by using reliable, independent, authenticated documents. In view of the above, he claimed that they did not contravene the Regulations 11(a), 11(d), 11(e), 11(m) and 11(n) of CBLR, 2013. 3.2 Further, learned Advocate stated that the appellants CB did not had any prior knowledge about the fact that the importer i....
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....(d), 11(e), 11(m) and 11(n) of CBLR, 2013, and hence there are certain distinct charges framed against the appellants. Since, the import transactions have happened in 2017, prior to CBLR, 2018, we are referring to the relevant provisions as applicable under CBLR, 2013. We find that the Regulation 10 ibid, provide for the obligations that a Customs Broker is expected to fulfill during their transaction with Customs in connection with import and export of goods. These regulations are extracted and given below as follows: "Regulation 11. Obligations of Customs Broker: - A Customs Broker shall - (a) obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as a Customs Broker and produce such authorisation whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; ... (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; (e) exercise due diligence....
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....horization by the importer was found by the department only on the basis of specific investigation conducted by DRI, subsequent to the clearance of imported goods from the customs control. Furthermore, it is the condition of the license that the duty-free imported goods were diverted in the local market without payment of customs duty which is purely under the domain of the importer to comply with. Hence, the appellants CB cannot be found fault for the reason that they did not advise their client importer to comply with the provisions of the Customs Act, 1962 or allied legislations, as at the time of clearance there was no allegation of any mis-use. Thus, when the customs authorities themselves had cleared the imported goods and were not aware of any future non-compliance or violation by importer, there is no possibility for the appellants CB to be aware of the same, and to bring it to the notice of the Deputy Commissioner of Customs (DC) or Assistant Commissioner of Customs (AC). Thus, we are of the considered view that the violation of Regulation 11(d) ibid, as concluded in the impugned order, is not sustainable. 8.2 Learned Principal Commissioner of Customs (General) ha....
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....the conclusion arrived at by the Principal Commissioner of Customs (General) that such omission and commission on the part of the appellants is indicative of inefficiency in the discharge of their duties as Customs Broker and therefore they have violated Regulation 11(m) ibid has no legal basis or supported by any factual evidence. 8.4 Learned Principal Commissioner of Customs (General) had come to the conclusion that the CB had violated the provision of Regulation 11(n) ibid, on the ground that the appellants were not careful and diligent in undertaking the KYC verification process about the background of exporters. We find from the record, that the appellants CB had obtained the shipping documents along with invoice, packing list, Bill of Lading etc. and valid IEC, DEEC holder certification, Advance Authorization certificates issued by the Ministry of Commerce and verified the existence of the importer through digital mode viz., Certificate of Importer-Exporter Code issued by the Additional Director General of Foreign Trade, Ministry of Commerce and Industry, Government of India. Therefore, there is no sufficient ground made out by the learned Principal Commissioner in c....
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....urt of Delhi has held in the case of Kunal Travels (Cargo) Vs. Principal Commissioner of Customs (I&G), IGI Airport, New Delhi reported in 2017 (354) E.L.T. 447 (Del.), the appellants CB is not an officer of Customs who would have an expertise to identify misdeclaration of goods. The relevant portion of the said judgement is extracted below: "The CHA is not an inspector to weigh the genuineness of the transaction. It is a processing agent of documents with respect to 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." 8.8 From the above, we also find that the above orders of the Tribunal and higher judicial forum are in support of our considered views in this case in respect of compliance with Regulation 11(n) ibid/ 10(n) of CBLR, 2018. 9. ....