A Customs Broker sublet his
licence to another person, for monthly payment .The other person misused
license and crated fake documents including ARE1 ( before GST case ) and
declared cargo as accessories of sanitary ware but loaded container with red
sanders. DRI intercepted container and based on subsequent investigation
Customs Broker licence revoked. Customs Broker has appealed before CESTAT and
let us see its important observations ;
In the present case, the
Directorate of Revenue Intelligence (DRI) received information that in a
container in respect of which the shipping bill was filed by the CB, declaring
the goods as accessories of sanitary
ware, was indeed containing Red Sanders - an endangered species of wood - whose
export is prohibited. On examination, it was found to be true.
In Customs operations, the
Customs Broker plays a very vital role. He acts as an interface between the
Customs Officers responsible for implementing and enforcing the Act and the
importer or exporter. Therefore, Customs Brokers licence is not given to everyone.
The applicant must pass the examination conducted by the department for the
purpose which tests his knowledge of the Customs law and procedures. The
licensed Customs Broker is required to guide and undertake activities on behalf
of, the importer or the exporter only after checking his background, etc.
Just as a person, who is
licensed to drive or run a pharmaceutical shop or practice medicine cannot
transfer or sub-let his licence to another person, the Customs Broker is also
prohibited from transferring or selling his licence.
Revenue submits that the
facts of the case speak for themselves. At the time of investigation and even
when the statement of the partner of the CB firm was recorded by the DRI, they
had no documents whatsoever pertaining to the export consignment. In fact, he
gave a statement that they will be available with another person to whom they
have sub-let their licence.
The Customs Broker had
nothing on record to show that the ARE-1 was genuine. The Customs Broker did
not have any knowledge of the export of the exporter in whose name the export
was attempted.In this case the Customs Broker has done nothing except the claim
that the IEC was verified online as per their own claim and they have not
conducted any enquiry. Therefore, they have violated the conditions of his
licence.
The Customs Brokers
Licensing Regulations, 2013, do not permit the CB to sub-let their licence.
They have to conduct their business directly through their own employees. In
fact, in the statement given by Customs Broker, he said that he allowed another
person to handle export and import work using their licence and therefore all
original documents are lying with them.
Evidently, the Customs
Broker has transferred his licence or sublet it to allow unlicensed person to
clear exports and imports. Not only with respect to this consignment, but the
CB also had no records of the previous consignments exported in the name of the
same exporter where the shipping bills were filed indicating the appellant as
the Customs Broker.
The Customs Broker was
required to verify not only the correctness of the IEC, but also his
antecedents, identity, declared address etc. using reliable, independent,
authentic document data or information. The CB’s claim now, is that they have
verified the IEC from the DGFT website. The IEC number can be verified by
anybody on the DGFT website. It is not a substantive compliance of the
requirement under Regulation 11(n) of CBLR, 2013.
Considering the totality of
the circumstances we find that the violations in the present case are very
serious. It would have been a different case if the exports documents were
filed properly by the CB and the exporter had either mis declared the contents
of the sealed container or at some stage replaced the declared contents with
the contraband. In fact, in this case the exporter is not in picture.
Thus, the CB has, by
subletting their licence to another person in complete violation of CBLR, 2013
has created an open channel through which any contraband can be smuggled out of
India with impunity. Since export consignments, especially if the documents
show that the container was sealed by the Central Excise Officer, are not
checked by the Customs officers, by creating fake ARE-1s shown to have been
signed by the Central Excise Officers, an open channel for smuggling has been
created by the CB by sub-letting their licence.
We do appreciate that the
Customs Broker was not directly involved in the attempted smuggling but has
only allowed another person to open such a channel of smuggling using their
licence. This is serious enough to warrant revocation of the licence of the
Customs Broker and for forfeiture of the Security Deposit.
CUSTOMS BROKER VERSUS
COMMISSIONER OF CUSTOMS (AIRPORT & ADMINISTRATION) , KOLKATA, CESTAT
KOLKATA, Order pronounced on 28.07.2020
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