Customs brokers must exercise due diligence, but are not responsible for verifying the genuineness of client documents beyond established obligations.

Per: M.M. Parthiban

This is an appeal filed by M/s M. K. Enterprises, Navi Mumbai (herein after, referred to as ‘the appellants’ for short) assailing the Order-in-Original CAO No. 72/CAC/PCC(G)/PS/CBS Adj. dated 15.02.2021 (referred to as ‘the impugned order’) passed by the learned Principal Commissioner of Customs (General), Mumbai Zone-I, Mumbai.

2. In the impugned order the learned Principal Commissioner of Customs (General), Mumbai in exercise of powers conferred upon him under Regulation 17 (7) of the Customs Brokers Licensing Regulations, 2018 ( CBLR ) had revoked the CB license issued to the appellants for acting as a Customs Broker under the above regulations ibid, besides imposition of penalty and forfeiture of entire security deposit furnished by the appellants. Being aggrieved against the impugned order, the appellant filed this appeal before the Tribunal.

3.1 The brief facts of the case are that appellants had been issued with a Customs Broker (CB) license No. 11/893 granted by jurisdictional Principal Commissioner of Customs (General), Mumbai, under Regulation 7(2) ibid. An offence report dated 23.06.2019 was received from Central Intelligence Unit (CIU) of Jawaharlal Nehru Custom House, Nhava Sheva (JNCH) stating that they were investigating a case of import of toys by two importers for whom the Bills of Entry have been filed by the appellants CB. Customs authorities have found that there was mis-declaration of imported goods and the importers are found to be fake. The appellants, on behalf of the importer M/s Pemex Enterprises, had filed the Bill of Entry (B/E) No.8090120 dated 17.09.2018, in which the customs authorities have conducted 100% examination and found undeclared cosmetics were concealed and there was mis-declaration in terms of quantity, description etc. Further, in one another import consignment for which the appellants CB had filed the B/E No.8090119 dated 17.09.2018, for the importer M/s Nagresh Overseas, the imported goods on examination were found to be mostly electronic toys contrary to the declared description of ‘non-electronic toys’, which attract higher duty (IGST) and were non-compliant with the provisions of DGFT Notification No.44(RE-2000)/1997-2002 dated 24.11.2000. Based on the above, the jurisdictional Principal Commissioner of Customs (General), Mumbai had immediately suspended the appellants’ CB license vide Order No. 22/2019-20 dated 02.07.2019. After giving post decisional hearing the suspension of the CB license of the appellants was continued vide Order No.33/2019-20 dated 17.07.2019. Subsequently show cause notice No.19/2019-20 dated 14.08.2019 was issued for the act of omission and commission of CB, leading to contravention of Regulations 10(d), 10(e) and 10(n) of the Customs Brokers Licensing Regulations, 2018 ( CBLR ). The enquiry report was submitted on 30.10.2019, concluding that the customs broker firm had contravened all the aforesaid Regulations of , 2018. Accordingly, the Commissioner of Customs (General) had revoked the CB license No. 11/893, which had been issued to the appellants for acting as a Customs Broker under , besides imposition of penalty and forfeiture of entire security deposit furnished by the appellants vide the impugned order dated 15.02.2021.

3.2 Learned Advocate appearing for the appellants submitted that the appellants had not violated any of the Regulations under CBLR . In respect of Regulation 10(d) and 10(e), he stated that the appellants had exercised due diligence regarding the information to be declared in respect of imported goods. The subject bills of entry were filed on the basis of documents received from the importers and there was no mis-declaration with respect to description of goods. However, the appellants were not aware of the cargo concealed in the declared goods. Thus he clai