The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), ruled that no penalty on Customs Broker for abatement if Due Diligence was taken while verifying KYC of Importer based on records submitted.
The appellants in the present appeal are Ms. J. Lakshmi and M/s. Southern Clearing & Forwarding Agencies Pvt. Ltd.
Derrick Sam appeared and argued for the appellants and submitted that the appellant is a Customs Broker and had filed Bill of Entry on behalf of the importer. The only allegation against the appellant is that the appellant did not obtain the KYC documents directly from the importer. In fact, the appellant had obtained documents from importer through M/s. We Can Shipping and Logistics.
The Counsel urged that there is nothing under the Customs Broker Licensing Regulations 2013 which states that the Customs Broker has to obtain document from the importer directly. There is no allegation that the KYC documents submitted are not proper.
The simple allegation is that the documents were not obtained directly from the importer M/s. A.K. Imports and Exports. The entire case has been set up on the basis that the goods have been misdeclared.
The Counsel further contended that the appellant who is a Customs Broker does not have any knowledge as to the nature of the goods inside the container. The documents are filed on the basis of the information / document given by the importer. When the KYC documents are proper, the penalty imposed on the appellant under sec. 112(a) alleging that appellant has abetted misdeclaration of goods cannot sustain.
The appellant who is a Customs Broker cannot be expected to have knowledge about the goods in the container. On such circumstance, when there is no dispute with regard to the KYC documents submitted on behalf of the importer, the penalty imposed under sec. 112(a) alleging that the appellant has abetted smuggling of misdeclared / undeclared goods iswithout any factual basis.
The Tribunal of Sulekha Beevi CS, Judicial Member observed that “After appreciating the facts, evidence and following the principle laid down in the above two decisions, I am of the view that the penalty imposed on the appellants alleging abetment, that they have rendered the goods liable for confiscation, is totally unwarranted. The penalty imposed on the appellants require to be set aside.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
