M/s Global Links vs Commissioner Of Customs

Hemambika R. Priya, Member (T)

M/s Global Links (hereinafter referred to as the appellant) has filed this appeal against the order-in-original No. 28/ZR/Suspension-Confirmation/Policy/2023 dated 09.05.2023 passed by the Commissioner wherein the revocation of Customs Broker License and forfeiture of security deposit has been confirmed.

The brief facts of the case are that on the basis of the offence report dated 20.02.2023 forwarded from Additional Commissioner of Customs, CIU, NCH, Mumbai, Zone-I, inquiry of violation under CBLR, 2018 was initiated against the appellant. Accordingly, CB licence of the appellant was suspended vide Order No. 26/ZR/Suspension-Confirmation/Policy/2023 dated 13.04.2023 for the violation of provisions of Regulation 10(d), (e), (m) and 13(12) of the CBLR. Thereafter, the suspension of the CB licence was confirmed vide order No. 28/ZR/Suspension-Confirmation/Policy/2023 dated 09.05.2023, against which the present appeal has been filed.

The learned counsel submitted that the impugned order is illegal and improper as the appellant had always conducted the business by adhering to the provisions of the Customs Act and the rules and regulations framed thereunder. All the requirements under CBLR were fulfilled. The learned counsel contended that all the charges were denied as they have always conducted their CHA business by following the provisions of Customs Act and the regulations and rules framed thereunder. The learned counsel further contended that no offence had been committed by them in Delhi and they were facing action in Mumbai jurisdiction, where the show cause notice had been issued. As there was no offence report from Delhi jurisdiction, hence no action was warranted in Delhi jurisdiction. The counsel stated that Bills of Entry were filed on the basis of the documents provided by the importers. The Commissioner had failed to appreciate that the appellant had filed the respective Bills of Entry on the basis of import documents provided by the importers, and he was unaware of any alleged manipulation of import invoices. The appellant had no personal interest in the imports, except for clearance of the same which is his profession. Hence, CB licence is not liable to be revoked. The ld counsel placed reliance on the following case laws:

(i) Bharat Overseas Communicators Vs. Commissioner of Customs (General), Mumbai – 2007 (209) ELT 142 (Tri.-Mumbai);

(ii) Kunal Travels (Cargo) Vs. CC (I & G), IGI Airport, New Delhi – 2017 (354) ELT 447 (Del.)

Learned Authorised Representative submitted that it is evident that there were apparent mis-declaration with reference to description, quantity and value of the goods. The declared goods were also in contravention of other allied Acts such as non-compliance of Legal Metrology Act, non-compliance of BIS provisions, WPC provisions, IPR violations and non-payment of appropriate Anti-Dumping Duty. It was also accepted by the importer in his statement that Customs Broker did not inform him anything about the compliance of other allied Acts such as IPR, ADD etc. Therefore, the mis-declaration, non-compliance of various allied Act and as per the statement of importer, it is apparent that M/s Global Links had violated Regulations 10(d), 10(e) and 10(m) of the CBLR. Hence the appellant was liable for action under Regulation 16 of CBLR 2018 as it was his duty to properly guide his client to comply with the law and if the importer was not able to comply with law, the CB has to bring it to the notice of Assistant/Deputy Commissioner of Customs but the CB failed to do so. Therefore, they have violated Rule 10(d)/(e) of CBLR, 2018.

The learned Authorised Representative further submitted that the appellant was responsible for the conduct of his employee Shri Jitesh P Mav, G card holder employee of M/s Global Links, as per CBLR, 2018, as during the examination of the consignments, he neither brought out the discrepancies in the goods regarding quantity, undeclared goods, non-compliance of RB-44 provisions, statutory compliance of BIS norms and mandatory ETA certification for wireless items covered under subject Bills of Entry before the dock officer nor did he inform the importer and DC/Docks. Thus, the employee of appellant had failed to comply with the provisions of Regulation 10(m). The learned Authorised Representative further submitted that the appellant is bound by the act of his G-card/H-card holder. In the case of Skytrain Services Vs. Commissioner of Customs (Airport & General), New Delhi – 2019 (369) ELT 1739 (Tri.-Delhi), this Tribunal has held that:

“21. Admittedly, Shri Chaman Kumar Verma is the G-Card holder of the appellant who was physically and actually involved in the entire series of acts. Apparently and admittedly his activities had never been objected by the appellant nor ever had been questioned nor even been informed to the competent authorities. The appellant is otherwise bound by the act of his G-Card holder. Otherwise also, without the knowledge of the Customs Broker, the goods could not have been diverted. He is equally bound by the act of his authorised representative/agent. Keeping in view the same and the observation of Hon’ble Supreme Court in K.M. Ganatra & Co. (supra) case about the important duties of the CHA and the amount of due diligence as is required to be observed on their part, we are of the firm opinion that CHA has violated the obligations imposed upon him under CBLR, 2013/2018. The above observations are sufficient to hold that the violation of relevant Regulations is so grave that principle of proportionality is not opined to have been compromised as is impressed upon by the appellant. The failure thereof invites the penalty as that of revocation of licence.”

We have gone through the records and heard the arguments of the appellant and the department. The main issue to be decided is whether the gravity of the offence of the appellant is grave enough for revocation of license. To conclude the same it would be appropriate to understand the requirements of the CBLR vis a vis the offence of the appellant. To recount the facts, the importer M/s Dreeams Inc had imported goods from China and filed Bills of Entry as per the details given in the table below.

Sl no

B/E no.

Declared value (in Rs)

1

4324995

1631679.98

2

4325182

3099218.41

6.1 Thereafter, post clearance of the goods, the CIU wing examined the goods and noted that there were several violations including undeclared goods, requirements of BIS, misdeclaration of quantity, violation of import conditions under DGFT notification, and misdeclaration of value. Statements were recorded of the importer Sh Pankaj Bansal, G card holders of the appellant Sh Vinod P Nanda and Jitesh P Mav. The importer in his statement dated 06.02.2023 stated that the mistake was that of the supplier in China. He also stated that the appellant as his Customs Broker did not inform him the requirements of compliance of RE-44 and other statutory requirements. Consequently, he did not inform the other Government agencies regarding his business. Sh Vinod P Nanda, G card holder and holder of the Power of Attorney of the appellant in his statement stated that he was present during the re-examination of the goods imported vide the two Bills of Entry. He admitted that it was the duty of the appellant, i.e. CB to inform the compliance requirements to the importer, and also to the competent authority. In his statement dated 06.02.23, Sh Jitesh P Mav, also a G card holder admitted that he was present at the initial examination of goods by the Dock officers on 25.01.23, and the dock officers did not examine all the packages as required and also did not raise any query with regard to the discrepancies in quantity and other violations. He admitted that he also did not inform the AC/DC, Docks regarding the discrepancies. It is based on this admissions that the CB license has been revoked for having contravened the provisions of CBLR, 2018.It is within this factual matrix that one has to view the contraventions of the CBLR, 2018. We may examine the violations in respect of the provisions of the CBLR, 2018.

Regulation 10(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;

The facts as indicated above clearly establishes that the G card holder Sh Jitesh P Mav, who was present during the initial examination of the goods did not inform either the dock officers or the AC/DC regarding the non-compliance of BIS regulations and other clear violations of quantity, Anti dumping duty etc. It has also been stated by the importer that he was not informed by the CB regarding the other compliance requirements. This shows clear failure on the part of the appellant in his duties, as required under 10d of CBLR, 2018.

Regulation 10(e):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 or baggage;

As per the facts of the case, it is seen that the appellant had not informed the importer regarding the compliance requirements for import of digital smart watches, the RE-44 and mandatory WPC ETA certification etc. This points to a clear failure of the appellant’s G card holder, which is a violation of the aforesaid provision.

Regulation 10(m):discharge his duties as a Customs Broker with utmost speed and efficiency and without any delay;

The statement of the importer clearly evidences that the appellant did not discharge his duties in an efficient manner.

Regulation 13(12): 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.

6.2 This above regulation places the responsibility on the appellant, a CB for the omissions committed by his employees. The facts of the case establish the failure of the G card holder Jitesh P Mav in discharging his duties as the customs broker in the said importation. Therefore, the violations of the various provisions of the CBLR, 2018 stands proved.

6.3 The learned Counsel has submitted that the offence was committed in Bombay whereas the CB license has been revoked in New Delhi. This argument is specious as the appellant is registered as Customs Broker in New Delhi. Therefore, the jurisdiction for any action against the appellant lies with the jurisdictional authority only. The action against the CB was initiated based on an offence report which was received from the Customs office at the port.

6.4 It has also been argued before us that the appellant was not aware of any alleged manipulation of import invoices or valuation of goods. In the instant case, there is no allegation of any such violation. Infact the provisions of CBLR, 2018 as invoked in the show cause notice read with the facts of case clearly establishes the failure of the appellant in discharging his responsibilities as per the CBLR, 2018.

We now address the issue of whether the said violations attracted the punishment of revocation of the CB license. The role of the Customs broker is one of great responsibility in the customs operations and it is for this reason, a licence is issued only after conducting an examination and after necessary background verifications. It is true that the Customs broker is not an inspector to examine the goods and cannot exercise any powers available to the officers. All that is required of the Customs broker is to fulfill its obligations under the CBLR, 2018. Once it fulfils all its obligations, if an exporter or importer attempts to deal in contraband by bringing goods which are not declared in the documents, the customs broker cannot be held responsible for such violations unless there is evidence that the Customs broker had the knowledge of or was colluding in the offence. In the instant case, it is established that the G Card holder was present during the examination of the goods by the Dock officers, and did not inform the authorities as required under Regulation 10(d) and 10(m) of the CBLR, 2018. It is also an admitted fact that the importer in his statement has claimed that the appellant did not inform him of other regulatory compliance requirements for the goods imported by him. This is a clear failure of appellant’s duties as a Customs Broker. Infact, the G card holder has accepted that he failed to bring the discrepancies to the notice of the concerned Assistant/Deputy Commissioner as the dock officers did not raise any query. This is not acceptable, as it clearly indicates the abdication of the responsibility by the appellant/his employee, and highlights the mala fide intent of the appellant.

We hold that once a violation of CBLR Regulations is admitted, the Revenue has to follow the discipline governing the Customs House Agents and as such, the Commissioner of Customs is empowered to revoke the license of Customs House Agent and also to forfeit his security if such agent fails to comply with the provisions of Regulation or gets involved in the Act which would amount to mis-conduct/offence under the Act. The High Court of Andhra Pradesh in the case of Commissioner of Customs and Central Excise Vs. H.B. Cargo Services reported as [MANU/AP/0060/2011 = 2011 (268) E.L.T. 448 (A.P.)] held that in disciplinary matters, the Commissioner is responsible for happenings in Customs area, and for discipline to be maintained, if he takes a decision necessary for that purpose, CESTAT would, ordinarily, not interfere on the basis of its own notions of the difficulties likely to be faced by the CHA or their employees. Decision is best left to the disciplinary authority, save in exceptional cases where punishment imposed is shockingly disproportionate or is mala fide. Interference with punishment imposed would be justified only when it shocks conscience of CESTAT.

In view of the discussions above, we hold that there is no irregularity committed by the Adjudicating Authority while revoking the license of the appellant and imposing the consequential punishments under the Regulations. We do not find any infirmity in the impugned order. Consequently the appeal stands dismissed.