Declaration of Goods Description and Classification based on CB's Belief and Importer Documents not Mis-Declaration: CESTAT [Read Order]

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the declaration of goods' description and classification made by a Customs Broker (CB) based on the belief and documents provided by the importer does not constitute misdeclaration in the absence of intent or collusion to defraud.

Akbarali Mohemedali Mukadam, the appellant is a licensed Customs Broker (CB) who filed Bills of Entry (B/E) for import consignments on behalf of the importer Empara Multiventures Private Limited.

Become PF & ESIC Pro: Basic to Advance Course - Enroll Today

The consignment under B/E No. 2640242 dated 05.02.2021 declared "back covers" (mobile accessories) as the goods with a declared value of Rs. 6,00,548. During the physical examination, the consignment was found to contain "tempered glass screens" valued at Rs. 8,23,608 leading to a discrepancy in description and quantity.

The appellant filed another B/E (No. 2697872 dated 09.02.2021) but this was reportedly submitted by an unauthorized individual using the broker's credentials. The Principal Commissioner of Customs alleged violations of Regulations 10(d), 10(e), and 10(n) of CBLR, 2018.

Become PF & ESIC Pro: Basic to Advance Course - Enroll Today

The appellant’s counsel argued that the declared goods were based on the importer’s belief and documents and that they were unaware of any misdeclaration as they did not have prior access to the contents of the container.

The two-member bench comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) observed that the appellant fulfilled their obligations by filing the declaration based on the provided documents and had no control over the actual contents of the shipment.

Become PF & ESIC Pro: Basic to Advance Course - Enroll Today

The tribunal referenced the Supreme Court ruling in the Northern Plastics Ltd. case which held that a declaration in the Bill of Entry/classification of goods based on the belief of the importer or broker and supported by documents provided at the time of filing cannot automatically be considered a "mis-declaration."

The tribunal explained that the Customs Broker is not an inspector of goods but a facilitator of document processing based on client-provided information and there was no evidence of deliberate misdeclaration by the CB or any intent to violate customs regulations.

Become PF & ESIC Pro: Basic to Advance Course - Enroll Today

The tribunal observed that the classification or description of goods based on belief or available documents does not constitute misdeclaration if there is no intent or collusion.

So, the tribunal set aside the charges of misdeclaration and found no violation of Regulation 10(d), ruling that the CB could not be held accountable for discrepancies discovered during customs inspections.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates