The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) imposed a penalty of Rs. 5,000 on the Customs Broker (CB) for failing to personally verify client documents and credentials which violated Regulation 10(e) of the Customs Brokers Licensing Regulations (CBLR), 2018.
Akbarali Mohemedali Mukadam, the appellant held Customs Broker License issued under Customs Brokers Licensing Regulations (CBLR), 2018. Specific intelligence indicated customs duty evasion in a consignment declared under Bill of Entry (B/E) No. 2640242 dated 05.02.2021 by Empara Multiventures Private Limited.
The consignment contained 280,000 pieces of “tempered glass screen” instead of 232,500 “back covers” (mobile accessories) as declared. Another B/E (No. 2697872) was filed by an unauthorized person using the broker’s license pinpointing a lack of due diligence.
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The Principal Commissioner alleged violations of CBLR Regulations 1(4), 10(d), 10(e), 10(n), and 13(12) and suspended the broker’s license. The allegations included sub-letting of license to a third party (denied by the appellants), Lack of due diligence in handling client information failure to verify importer/exporter details, and improper supervision over document handling.
The appellant’s counsel argued their inability to personally verify clients during COVID-19 and claimed KYC was conducted through intermediaries using authentic documents.
The two-member bench comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban, (Technical Member) observed that Regulation 10(e) was violated due to handing over the Customs Broker’s access for filing documents to unauthorized persons for filing B/Es.
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The tribunal observed delays in completing the inquiry and criticized the process for taking over two years and the tribunal imposed a reduced penalty of Rs. 5,000 for failure to exercise due diligence under Regulation 10(e) and set aside license revocation and forfeiture of the security deposit.
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