TaxTMI 
TaxTMI 
2026 (2) TMI 53
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....etc. of the Customs Act, 1962 (for short "the Customs Act"). FACTS: 4. The petitioner was engaged by GKR Traders Pvt. Ltd. i.e. the importer to facilitate customs clearance for consignments of carpets by way of filing Into-bond Bills of Entry Nos.32607339 and 32607338 dated 29.04.2024 filed at Inland Container Depot (ICD), Sanand. 5. During investigation of mis-declaration of the goods, Shri Amit L.Prajapati, who is an employee of the petitioner, in statements recorded on 04.10.2024 and 24.10.2024 under section 108 of the Customs Act, confirmed that during filing of Bills of Entry, he has verified the documents of the importer company online and was unaware of overvaluation or mis-declaration until the respondent authority-initiated investigation. He has further stated in his statement that on 24.10.2024, he had checked online at MCA website, and as per the such website details, the directors of company changed on 01.06.2024. It is further stated therein that petitioner's professional charges for clearance of imported goods are Rs. 5,000/-. 6. Thereafter, the respondent authority issued a show-cause notice dated 28.10.2024 alleging that the imported goods were overvalue....
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.... identity of the client, and their functioning at the declared address using reliable documents; Regulation 10(n) of the CBLR, 2018 mandates due diligence in ascertaining the correctness of information provided by the client; Regulation 10(o) of the CBLR, 2018 prohibits a customs broker from acting on behalf of a client known to be guilty of breaching the Act and Regulation 10(q) of the CBLR, 2018 requires prompt reporting of any client misconduct to the Deputy Commissioner of Customs. 10. He has further submitted that regarding Regulation 10(n) of the CBLR, 2018, the Petitioner exercised due diligence by acting on the documents and declarations provided by the importer, which appeared genuine. He has submitted that the petitioner had no prior knowledge of overvaluation or mis-classification, as confirmed by its employee's statements. It is submitted that the Regulation 10(o) of the CBLR, 2018 is inapplicable, as there is no evidence that the petitioner was aware of any breach by the importer at the time of filing the Bills of Entry and as for the Regulation 10(q) of the CBLR, 2018, the petitioner was not required to report misconduct, as it became aware of the discrepancies....
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....onsignment and a first-time importer, the petitioner ought to have discussed the valuation aspect with the IEC holder and was required to exercise due diligence while dealing with a high-value consignment; however, the petitioner never dealt with the actual IEC holder. Thus, it is submitted that the present writ petition may not be entertained, more particularly, when the petitioner has an alternative remedy of filing an appeal before the appellate forum. ANALYSIS 14. We have heard the learned advocates appearing for the respective parties at length. 15. The facts, which are established from the pleadings, are that the petitioner provided services as a Customs Broker under the CBLR, 2018. The entire action of the respondent authority, including the investigation done by the respondent authority, emanates from the alleged mis-declaration of the goods of the importer, i.e. GRK Traders Pvt. Ltd. The petitioner was subjected to a thorough investigation and, ultimately, the Customs authority, i.e. the Additional Commissioner, by the impugned order, imposed a penalty of Rs. 5,00,00,000/- under the provisions of Sections 112(a)(iii) and 112(b)(iii) of the Customs Act. 16. At t....
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....ed 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; xxx xxx xxx (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; xxx xxx xxx (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 documents, data or information;... ... ... " 18. By observing the aforesaid regulations, the respondent authority has imposed penalty by invoking the provisions of section 112 read with section 114AA of the Customs Act. While referring to the said provisions, it is contended by the petitioner that the same will only attract in case, where any mens rea is established. In order to examine the element of mens rea, it is necessary to examine the rel....
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.... does not attract element of mens rea, in the instant case, the respondent-authority has imposed penalty on the petitioner for "not advising the importer". In our considered opinion, the act of not advising the importer will also not attract the ingredients of first part of Section 112(a). This is a civil obligation which directly connects with the importer, and will not encompass, the Customs House Agent (CHA), unless it is proved to the contrary that due to his advice or act or omission, the importer has acted in a manner, which made the goods liable for confiscation. 20. It is the case of the respondent authority that the petitioner, being a CHA, has tried to abet and aid the goods which were mis-declared and, hence, the provisions of Section 112(a) of the Customs Act would get attracted, which would have consequences leading to the imposition of penalty. From the tenor of the order which is being passed by the respondents, we find that there is no whisper of any finding relating to any mis-declaration, fraud or overvaluation, or any mens rea on the part of the petitioner, which would even remotely connect the petitioner with such acts that would satisfy the ingredients of....