Perfect Cargo and Logistics Vs Commissioner of Customs (CESTAT Delhi)
The contention of the appellant is that the G-Card holder acted strictly in accordance with the guidelines issued in the Circular dated April 8, 2010. According to the appellant, the G-Card holder exercised due diligence by procuring all independent and authentic documents.
39. As noticed above, if the documents that were submitted to the G-Card holder, prima-facie appeared to be authentic, there was no reason for the G-Card holder to verify the contents of the documents. The grant of an Importer Exporter Code number was held by the Delhi High Court in Kunal Travels to pre-suppose verification of facts. The decision rendered by the Tribunal in Millenium Express does not help the Department in view of the judgments of the Delhi High Court in Kunal Travels and Shiva Khurana. The decision of the Tribunal in HLPL Global Logistics would not be applicable in the present case since this decision relates to violation of the provisions section 114 of the Customs Act, 1962 and not the Licensing Regulations. The decision of the Patna High Court in Bhaskar Logistic also does not help the Department. The misuse of Importer and Exporter Code had been detected in the case. The decision of the Tribunal in Multi Wings does not also help the Department as it was found as a fact that the KYC documents were not available with the assessee at the time of visit of the Investigating Agency.
It also needs to be noted that the statement of the Customs Broker in the present case was not recorded and only the statement of C/50863/2020 his G-Card holder was recorded by the Investigating Agency. It was necessary to record the statement of the Customs Broker as allegations have been made against the Customs Broker. This fact has also been noticed by the Tribunal in G.M. Enterprises vs. Commissioner of Cus. (Export), Nhava Sheva14.
The inevitable conclusion, therefore, that follows is that the Commissioner was not justified in revoking the License of the appellant or forfeiting the security deposit or imposing penalty.
Thus, for all the reasons stated above, it is not possible to sustain the impugned order dated June 26, 2020 passed by the Commissioner. It is, accordingly, set aside and the appeal is allowed.
FULL TEXT OF THE CESTAT JUDGEMENT
1. M/s Perfect Cargo and Logistics1 has filed this appeal for setting aside the order dated June 26, 2020 passed by the Commissioner of Customs (Airport and General)2, by which the Customs Broker Licence3 of the Appellant which was valid up to November 07, 2027 has been revoked. The order also forfeits the security deposit of Rs. 5 lakhs and imposes penalty of Rs. 50,000/-.
2. The records indicate that the Deputy Director, DRI, DZU, New Delhi, by a letter dated September 03, 2019, informed the office of the Commissioner that the Appellant had undertaken customs clearance for export of goods of two firms, namely, M/s Impex Trading and M/s Global Trading, without verifying the existence of the exporters and without even meeting the partners of the said firms and investigation also revealed that the said firms and their partners did not exist at the addresses given in their Import Export Code/ Bank Accounts and that the Bank Realisation Certificates were not received against the exports made by them. The investigation report and copies of the statement of Virdender Kumar Saraswat, a G-Card holder of the Appellant, were forwarded to the office of the Commissioner for action under the provisions of the Customs Brokers Licensing Regulations, 20184.
3. It, therefore, appeared to the Department that the Appellant had failed to comply with the provisions of Regulations 10(a), 10(d), 10(e), 10(n) and 13(12) of the Licensing Regulations and so action could be taken under the Licensing Regulations, including revocation of license, forfeiture of part or whole of security and imposition of penalty. The Deputy Commissioner in the office of the Commissioner of Custom (Airport & General) was appointed as the Inquiry Officer. Thereafter, a show cause notice dated December 03, 2019 was issued to the Appellant requiring the Appellant to show cause as to why it should not be held responsible for contravention of the aforesaid C/50863/2020 provisions of the Licensing Regulations and why the Licence should not be revoked and part or whole of the security submitted at the time of issue of the License be not forfeited. The Appellant was also asked to show cause as to why penalty should not be imposed in terms of Regulation 18 read with Regulation 17 of the Licensing Regulations.
4. The Appellant, by a letter dated January 02, 2020, submitted a detailed reply stating, inter alia,:
(i) The Appellant and the G-Card holder had before filing the shipping bill, fulfilled the “know your customer”5 norms by asking for the documents mentioned in Regulation 10 (n). The partnership deeds, service tax registration, voter cards, PAN card and Importer Exporter Code were submitted and the addresses of the firms were available in the Importer Exporter Code Certificates.
(ii) Though the G-Card holder had not personally met all the partners of the exporting firms, but as per the practice he had met the representative of the exporting firms for taking the authorisation letters and also documents including export documents, as required by KYC norms, on the basis of which the shipping bills were filed. Copies of the authorisation letter and various emails and KYC documents were also enclosed with the reply.
(iii) It was not the duty of the Appellant to verify the addresses of the exporters by personally visiting the addresses given in the export documents or in the Importer Exporter Code or in the registration certificates.
(iv) Evidence of over valuation was not in the knowledge of the Appellant and hence there was no question of advising the client. As per the practice, the address and verification of the Importer Exporter Code number, GST number and identity of the client are done by taking all the KYC norm documents prescribed in Circular No. 9 of 2010 dated April 8, 2010. The bank verifies the correctness of the address of the exporters by following the KYC norms verification. Hence, it is not correct to allege that the Appellant had violated Regulation 10(e) of the Licensing Regulations. The Appellant had exercised proper supervision over the conduct of the G-Card holder and the G-Card holder had also discharged his duty as per the Licensing Regulations. There was no act or omission on the part of the G-Card holder.
(v) There was, therefore, no violation of Regulations 10(a), 10(d), 10(e), 10(n) and 13 (12) of the Licensing Regulations.
(vi) Case laws in support of the contentions raised in the reply were referred to.
5. The reply filed by the Appellant, however, did not find favour of the Commissioner, who by order dated June 26, 2020 revoked the Licence of the Appellant by exercising powers under Regulation 14 of the Licensing Regulations.
6. The Appellant has submitted a chart that contains the Regulation of which violation has been alleged, the ingredient of the Regulation, the finding of the Commissioner and the submissions of the Appellant. The same are contained in the following Table:
