Saturday, August 29, 2020

An IEC holder lent IEC to other person. Customs Broker has proper KYC documents but not personally visited client place.The allegation against the exporter is overvaluation and Customs has revoked CB license and forfeited security deposit.There is no evidence brought in the impugned customs order that the CB had colluded with the exporter in overvaluing the goods. Whether customs Action is tenable ?

No.Customs action is not tenable and has to be set aside. 

Even though it looks strange but lending of Import Export Code ( IEC ) is not an offence as per Customs Act. 

In the given case, As per CBLR18, CB has collected all proper KYC documents but not visited client place. Visiting of Client place is not mandatory as per CBLR. 

CBLR18 Regulation 10 (n) - Obligations of Customs Broker says ;

“verify correctness of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN),identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information" 

I suggest that Customs Broker should collect some of the latest utility bill copies like Telephone, Electricity, water tax, property tax etc in the name of IEC holder apart from regular KYC docs when they deal with any new clients to comply obligation as per regulation 10(n) cited above and to safeguard his side when some mis declaration issue crops up. This latest utility bill copies, will help CB to prove that the client was present in the said address on the relevant date mentioned in the utility bills.

At last, possession proper KYC documents saved CB from Customs action. For each and every mis declaration of importers/exporters, CB can not be held responsible. Hence order of revocation of CB licence is to be set aside.


#Customs Law Quick Bites-7

1 comment:

Unknown said...

Good News to CB and great relief too. Tks.