TaxTMI 
TaxTMI 
2026 (1) TMI 959
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....al Commissioner, New Customs House to the office of the Commissioner of Customs (Airport & General) for taking action against the appellant for violation of the provisions of the 2018 Regulations. 4. Accordingly, a show cause notice dated 03.02.2025 was issued by the Commissioner calling upon the appellant to show cause why he should not be held responsible for contravention of the provisions of Regulations 10(a), 10(d), 10(e) and 10(n) of the 2018 Regulations; why the license should not be revoked; why the security should not be forfeited; and why penalty should not be imposed under Regulation 17 of the 2018 Regulations. 5. The appellant submitted a reply dated 14.04.2024 to the Inquiry Officer who, thereafter, submitted an inquiry report dated 07.05.2025 concluding that the appellant had contravened the provisions of Regulations 10(a), 10(d), 10(e) and 10(n) of the 2018 Regulations. 6. The appellant filed a representation before the Commissioner who ultimately passed the impugned order dated 28.7.2025. 7. In regard to the violation of Regulation 10(a) of the 2018 Regulations, the Commissioner observed: "10.11.1 Regulation 10(a) of the Customs Brokers Licensin....
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....re, the KYC documents submitted by the CB, allegedly received from M/s Ellite International, do not fulfill the authorization criteria. The said KYC format does not bear any date to suggest that it pertains to a specific consignment or that it was intended for multiple Bills of Entry. In the absence of a specific linkage to the two Bills of Entry in question, and in light of the CB's own admission that 07 BoEs were filed during 2023, the validity of the authorization remains unsubstantiated." (emphasis supplied) 8. In respect of Regulation 10(d), the Commissioner observed: "10.12 Regulation 10(d) of the Customs Brokers Licensing Regulations, 2018 stipulates that the 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." 10.12.1 CB has not submitted any satisfactory submission how he advised his client to comply with the provisions of the Act. 10.12.2 During the course of investigation, Shri ....
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....through a telephonic conversation- rather than relying solely on a third party, which is neither permissible under the CBLR nor in accordance with the standards of due diligence expected of a licensed Customs Broker. Further, it is noted that the Customs Broker had no knowledge of the actual importer's identity, background, or even physical whereabouts, as no direct interaction ever took place between them. In view of the above factual matrix, it is evident that the Customs Broker failed to verify the IEC, GSTIN, identity of the client, and the functioning of the client at the declared address using reliable and authentic documentation. Accordingly, this constitutes a clear violation of Regulation 10(n) of the Customs Brokers Licensing Regulations, 2018." (emphasis supplied) 11. Shri B.L.Garg, learned counsel for the appellant made the following submissions: (i) The Commissioner committed an error in holding that the appellant had violated the provisions of Regulations 10(a), 10(d), 10(e) and 10(n) of 2018 Regulations; (ii) The Commissioner has relied upon statements made under section 108 of Customs Act, 1962 [the Customs Act] even though the procedure ....
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....er is that the authorization was received from M/s Prime World Logistics and not from the importer. There is no requirement under Regulation 10(a) that the authorization should be received directly from the importer. The authorization dated 17.01.2022 is at page 269 of the appeal memo. It clearly authorizes the appellant as a customs clearing agent for clearance of the import consignment. The Commissioner has relied upon the statement of Rajeev Agarwal, Manager of the importer recorded on 04.06.2024 under section 108 of the Customs Act to hold that the Bills of Entries were filed by the appellant without proper authorization. A statement made under section 108 of the Customs Act cannot be relied upon if the procedure contemplated under section 138B of the Customs Act is not followed. This is what was observed by the Tribunal in Surya Wires and the relevant portion of the decision is reproduced below: "28. It, therefore, transpires from the aforesaid decisions that both section 9D(1)(b) of the Central Excise Act and section 138B(1)(b) of the Customs Act contemplate that when the provisions of clause (a) of these two sections are not applicable, then the statements made unde....
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....nce of Lithium Ion Batteries and this fact should have been brought to the notice of the Deputy Commissioner. 18. As noticed above, a statement made under section 108 of the Customs Act cannot be relied upon as the procedure contemplated under section 138B of the Customs Act was not followed. The charge of contravention of Regulation 10(d), therefore, is not established. 10(e) 19. Regulation 10(e) of the 2018 Regulations requires the Customs Broker to exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work relied to clearance of cargo package. The main reliance by the Commissioner is on the statement of Deepak regarding the marking on the packages and from this, the Commissioner has concluded that the appellant failed to exercise due diligence to verify the nature and correctness of the goods. As noticed above, a statement made under section 108 of the Customs Act cannot be relied upon in the absence of procedure contemplated under section 138B of the Customs Act having been followed. This charge has, therefore, also not been established. 10(n) 20. Regulation 10(n) of the 2018 Regulations requires....