TaxTMI 
TaxTMI 
2026 (2) TMI 1347
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.... crockery, used other household items, stationary, toiletry etc. Most of the items were declared and assessed free of duty under Rule 6 of the Baggage Rules and Rs.1,925/- was collected as customs duty on miscellaneous items such as toiletries, cosmetics, etc. The SIIB re-examined the packages and on re-examination, inventory of goods were prepared and based on the revised inventory list, the total value of the subject consignment worked out to Rs.1,14,520/- as against the declared value of Rs. 27,000/-. Based on the above-mentioned mis-declaration goods were seized and statement of the appellant and the passenger were recorded. On conclusion of the investigation, show cause notice was issued alleging that the appellant had colluded with the overseas customer, M/s. Good Care Cargo Services to clear the consolidated cargo of different persons using the passport of Mr. Yoonus Kallivalappil and caused revenue loss. Similarly proceeding under CBLR,2018 was also initiated and as per the impugned order, Adjudication Authority revoked the license, forfeitured security deposit and also imposed penalty. Aggrieved by said order, present appeal is filed. 3. When the appeal came up for hear....
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....allegation is made that the goods doesn't belongs to said passenger. Learned Counsel also drew our attention to the statement recorded from the Sri. C. G. Prathapan, 'G' card holder, who is alleged as the mastermind for abetting such illegal import and it was specifically stated that he was not aware of such illegal activity committed by the employee. Further for the failure on the part of 'G' Card holder, Shri. C G Prathapan, his service was terminated by appellant vide letter dated 24.06.2024. Learned Counsel further submits that the appellant had given clear instruction to the all the employees not to act in any import and export clearance by violating any provision of law. 4. Learned Counsel also draw our attention to the inquiry report dated 06.09.2024 and the finding in the impugned order. As regards allegation of violation of Regulation 10(a) of the CBLR, 2018 as per the provision "the Customs Broker shall obtain an authorization from each of the companies, firms or individuals by whom he is for the time being employed a Customs Broker and produce such authorization whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of Cu....
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....r Sri. C. G. Prathapan, only. Thus, there is no reason to allege that appellant failed to verify the facts and report to the Deputy/Assistant Commissioner regarding violation of any Regulation to allege violation of Regulation 10(d) of the CBLR, 2018. 6.1. Learned Counsel further submits that as per Regulation 10(e) of the CBLR, 2018, appellant has to "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 baggage". It means "the care that a reasonable person takes to avoid harm to other persons or their property". Due diligence is a process or effort to collect and analyse information before making a decision or conducting a transaction so a party is not held legally liable for any loss or damage. In this regard, Learned Counsel submits that Appellant had taken extreme care while handling import/export activities on behalf of Appellant's customer and there is no allegation that Appellant had made any attempt to cover up any omission or commission of an offence committed by Appellant's clients. When goods are imported/exported, Customs Broker have no opportunity to verif....
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....e KYC norms. Hence, there is no reason or justification to allege that Appellant had failed to verify the identity of the client to allege violation of 10(n) of the CBLR, 2018. 9. As regarding Violation of Regulation 13(12) of the CBLR, as per said provision, "the Customs Broker shall exercise such supervision as may be necessary to ensure proper conduct of his employees in the transaction of business and he shall be held responsible for all acts or omissions of his employees during their employment". Learned Counsel submits that as a Customs Broker, while appointing the employees, Appellant had given clear instruction to them that they shall not engage in any unlawful activities. Further, Learned Counsel submits that Appellant used to conduct random checking of the clearance of the consignments. Even if it is assumed that 'G' card holder of the appellant Sri. C. G. Prathapan had abetted illegal clearance of Unaccompanied Baggage as alleged, it cannot be considered as a bonafide act of an employee of Customs Broker to proceed against the Customs Broker under the provisions of Customs Act, 1962 or CBLR 2018 as he has undertaken such activities for his personal benefit and....
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....ated cargo of multiple consignees and that he had canvassed and cleared the consolidated baggage. Sri. C.G Prathapan had admitted this fact in his statement obtained under Section 108 of the Customs Act, 1962. The adjudicating authority also very clearly brought out in this finding that the appellant has failed to discharge their duties as Customs Broker; not followed the procedure as prescribed and violated Regulations 10 (a), 10 (d), 10 (e), 10 (n) and 13 (12) of the CBLR, 2018. The referred case laws do not come to the rescue of the Customs Broker because the Hon'ble Supreme Court in the case of Commissioner of Customs Vs K.M. Ganatra and Co., the Hon'ble Delhi High Court in the case of Sriaanshu Logistics Vs. Commissioner of Customs (General), CUSAA 17/2021 & CM APPL. 11107/2021 and the Hon'ble Madras High Court in the case of Sri Kamakshi Agency Vs. Commissioner of Customs, Madras, 2001(129) ELT29 (MAD) in cases which are of similar gravity to the present case upheld the revocation of Customs Broker license. Learned AR further submits that the present proceedings being of civil nature run on the principle of preponderance of probability and the charges against the Customs Brok....
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....overed from the email of the appellant and from said document, it is evident that the consignment brought by the passenger as bona fide baggage consists of baggage belonging to some other passengers also. Once such an email communication recovered and when not rebutted it amounts to failure of the appellant to inform the same to concerned passenger not to proceed with such clearance. Thus, there is an admitted violation of the Regulation 10(d) of the CBLR, 2018. As regarding violation of Regulation 10(e) of the CBLR, 2018, appellant has to exercise due diligence while ascertaining the correction of the information. Though the illegality was committed by one of the employees of the appellant in connivance with the overseas cargo movers, the appellant being a Customs Broker having unblemished record over a period of time, cannot be held personally liable for the said violation to proceed against him under the Provisions of CBLR, 2018. Further, as held by this Tribunal in the matter of M/s. MNS Export Private Limited (supra), fraud committed by an agent which does not fall within the authority, does not affect the principle. Fraud committed by employee, which was not within the knowle....