TaxTMI 
TaxTMI 
2026 (9) TMI 1767
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.... the form of Order-in-Original No. 300/2021-22/JC/NS-II/JNCH/CAC dated 06.01.2022 passed by the Joint Commissioner of Customs, Jawaharlal Nehru Custom House (JNCH) was received in Customs Brokers (CB) Section, New Custom House (NCH), Mumbai. In the said order dated 06.01.2022, the appellant CB was imposed with a penalty of Rs. 24,50,000/- under Section 114(i) of the Customs Act, 1962 for commission of wrongful committed by them, thereby aided and abetted an attempt to fraudulently export prohibited Red Sanders for export out of the country. This relates to the investigation conducted by Special Intelligence & Investigation Branch-Exports (SIIB-X), JNCH in respect of Shipping Bill (S/B) No. 5111423 dated 11.09.2020, which was filed by an exporter M/s Orchid International, Andheri (West) through the appellant CB. On detailed examination of the said export consignment, SIIB-X found that 6155.08 Kgs. of prohibited Red Sanders wooden logs were attempted to be exported in the aforesaid S/B by concealing in a plastic sheet pallets having cavity created for such concealment. The offending goods were seized under Panchnama proceedings dated 15.09.2020. Upon completion of the investigation s....
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....the appellant CB firm along with its proprietor have been exonerated from those primary charges, by setting aside the imposition of penalty of Rs. 24,50,000/- against each of them under Section 114(i) ibid in the said order dated 06.01.2022 of the original authority. Hence, learned Advocate pleaded that the consequential action taken under CBLR proceedings on the basis of the said order dated 06.01.2022, in treating the same as offence report informing such primary charges does not stand legal scrutiny. 3.2 Further, learned Advocate also stated that the appellant CB did not have any prior knowledge about the fact that the exporter is going to mis-declare the export goods by fraudulently concealing prohibited red sander wooden logs; they had received the documents for export through Shri Samir Shah on behalf of exporter viz., M/s Orchid International posing as an employee, and they had duly verified the existence of the exporter through the statutory documents in the manner prescribed under CBLR. He further stated that for the acts of misdeeds done by the exporter, the appellant CB cannot be held liable. Thus, he claimed that the appellant did not contravene these Regulations ibi....
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....0(a), 10(d) and 10(n) ibid, and hence there are three distinct charges framed against the appellant. We find that the Regulation 10 of CBLR, 2018, provides for the obligations that a Customs Broker is expected to be fulfilled during their transaction with Customs in connection with import and export of goods. These are as follows: "Regulation 10. 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; ... (n) verify correctness of Importer Exporter Code (IEC) number, Good and Services Tax Identification Number (GSTIN), identity of his client and functioning of his client at the declared address by using reliable,....
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....in such documentation. 8.2 The fraud committed in illegal export of 'Red Sanders' - prohibited goods came to the fore, when physical examination of the export goods was conducted and the concealment was detected by SIIB-X. The role of the appellant CB in the above irregular export has been examined in separate proceedings under the Customs Act, 1962 and the Commissioner (Appeals) in the Order-in-Appeal dated 28.04.2025 has given his findings and ordered as follows: "4.11 On perusal of the impugned order, I find that from none of the statement recorded under section 108 of the Customs Act, 1962, it emerges that the CB M/s Yes Clearing Solutions and his proprietor Shri Dattatray V. Gawade, were knowingly involved in the attempted smuggling of the red sanders wood logs. Further, I do not find any evidence on record in this case which shows that the CB M/s Yes Clearing Solutions and his proprietor Shri Dattatray V. Gawade, were knowingly involved in any manner in the attempted smuggling of the red sanders wood logs. Investigation/Department has also not brought out any evidence on record to show that the appellants were knowingly or intentionally involved in the smuggling o....
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....fact. The question is, merely because the appellant procured the business through an intermediary who is not his employee, can it be said that he has sub-let or transferred the business to intermediary. The Tribunal in the case of Principal Commissioner of Customs v. Chhaganlal Mohanlal & Co. Ltd. [2006 (203) E.L.T. 435 (Tri. - Mum.)], held that if the Customs clearance has been done through intermediary and business was got through intermediary, the same is not barred by the provisions of CHALR, 2004 and it cannot be stated that the appellant has sub-let or transferred his licence. In the case of Krishan Kumar Sharma v. Principal Commissioner of Customs, New Delhi reported in 2000 (122) E.L.T. 581 (Tri.), this Tribunal held that the mere fact of bills raised on the intermediary cannot be held against the CHA firm to prove that the CHA licence was sub-let or transferred. Therefore, in the light of the judgments cited above, the charge of violation of Regulation 12 is not established. As regards the violation of Regulation 13(a), the adjudicating authority himself has observed that the "I have no doubt to say that the CHA might have obtained the authorisation but it is surely not fr....
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....o possibility for the appellant 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) about the mis-declaration of exported goods. Thus, we are of the considered view that the violation of Regulation 10(d) ibid, as concluded in the impugned order is not sustainable. 10.1 Learned Principal Commissioner of Customs (General) had come to the conclusion that the CB had violated the provision of Regulation 10(n) ibid, on the ground that the appellant had never met the proprietor of export firm/IEC holder, and they were not careful and diligent in undertaking the KYC verification process about the background of exporter. 10.2 We find from the records, that the appellant CB had obtained the KYC documents from the exporter M/s Orchid International along with KYC form and enclosures; and verified the existence of the exporter through the Certificate of Registration dated 09.07.2019 obtained from GST authorities indicating the name along with address, name of the proprietor; PAN Card of the proprietor/exporter; Aadhaar card of proprietor; signature and account verification letter from IndusInd Bank,....