Non-Supervision of Activities of Staff amounts to Non-Exercise of Due Diligence u/s 10(e) of CBLR: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the non-supervision of activities of staff amounts to non-exercise of due diligence under Section 10(e) of the Customs Broker Licensing Regulation, 2018 (CBLR).

As part of the investigation, consignment brought in the name of few passengers were examined and found that it contained goods such as toy car, soap, milk powder., etc. and the consignment includes the goods belonging to other NRIs. Thereafter alleging that the Appellant is actively involved in release of such goods, premises of the Appellant was searched on 13.02.2019 and several incriminating documents regarding clearance of non bonafide baggage were recovered.

The counsel for the appellant submitted that the alleged violation of section 10(e) of the Customs Broker Licensing Regulation, 2018 is also unsustainable, since the Appellant had exercised due diligence to ascertain the correctness of the information furnished by the importer. In support the Counsel for the Appellant also brought our attention to the Baggage Declaration made by the passengers who are allegedly involved in import of non-bonafide goods. The declaration made by the passenger furnishing details of goods and certificate to the effect that all goods belong to them.

Regarding violation of Regulation 10(e) of CBLR, 2018, the AR submitted that there is no evidence that the appellant had imparted any information to their clients with reference to documents which were submitted by the passengers.

A Two-Member Bench comprising P.A. Augustian, Member (Judicial) and Pullela Nageswara Rao, Member (Technical) observed that “Only presumption can be drawn that though the appellant was not knowing about the content of the mail/communication made on behalf of the appellant, there is an omission on the part of appellant in proper supervision of the activities of its staff, which amount to non exercise of due diligence as contemplated under section 10(e) of CBLR 2018.”

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