Customs Broker ended up Facilitating Fake Importers: CESTAT upholds Forfeiture of Security Deposit [Read Order]

Customs Broker - Facilitating Fake Importers - CESTAT - Forfeiture - Security Deposit - Taxscan

The Mumbai Bench of Customs, Excise & Service Tax Appellate Tribunal has held that customs broker ended up facilitating fake importers and upholds the forfeiture of security deposit.

The appellant, M/s. Sky Sea Services is a Custom Broker, of M/s. Akash Corporation and M/s. Sugam Auto India. The Special Intelligence and Investigation Branch (SIIB) (import) Air Cargo Complex, have conducted an investigation into imports made by M/s. Akash Corporation and M/s. Sugam Auto India based on the opinion that the appellant did not follow the procedure for examination of Cargo for Clearance and they did not verify the credentials of the importers. Based on the investigation and enquiry the security deposit was forfeited and penalty was imposed on the appellant. Aggrieved appellant filed appeal before CESTAT.

Mr. Anil Balani, counsel for the appellant submitted license was suspended in 2016 and enquiry report was received after two and half years; the appellant had adequate and proportionate punishment; however, the Commissioner also forfeited the security deposit. The appellant further submitted that the enquiry report is barred and casual; the enquiry officer holds that the appellant-Custom Broker did not bother to identify the rules and that he did not bother to visit the premises of the importer.

Mr. Manoj Das, counsel for the revenue submitted that the appellant-Custom Broker is a habitual offender; the enquiry report substantiates all the charges; the proprietor of the appellant confessed that none of his staff who handled the import documents has customs pass; he has failed to verify the functioning of Ms. Aakash Corporation from the declared address and also the CB was not aware who the actual importer was.

The Coram of Mr. S.K. Mohanty, Member (Judicial) and Mr. P. Anjani Kumar, Member (Technical) has observed that it was incumbent on the appellant-Custom Broker that they conduct all possible enquiries through independent reliable sources/documents to verify the credentials of the clients. No such effort made by the appellant and no such document relied upon have been placed on record. They have failed to observe due diligence in this regard and thus ended up facilitating fake importers. The Tribunal further observed that the appellant-Custom Broker has violated the provision of Regulation 11(a), (b), (d) and (e) of CBLR 2013 as held by the Commissioner.

The Tribunal has held that “we find that even in the impugned case, appellant-Customs Broker did not prove his bona fides. We find that Commissioner while passing the impugned order has considered all the facts including the punishment suffer by the appellant and let them off with penalty and forfeiture of security deposit. We find that Commissioner was not harsh to revoke the license. We find that to that extent, the impugned order is reasoned, cogent and legally maintainable”.

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