Prior Knowledge about Mis-declared Description before filing Bills of Entry Necessary to Establish Complacency of Customs Broker: CESTAT [Read Order]

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that the Prior knowledge about mis-declared description before filing bills of entry necessary to establish complacency of customs broker.

The appellant, M/s.Ayushi Logistic Company is a customs broker and it was alleged that the Customs Broker filed two bills of entry for the importer M/s. Puskar Tradecom PvtLtd declaring the goods as ‘White Calcined Pigment’ and ‘Industrial Washing Liquid’, whereas on examination, the goods were found to be ‘Chlorides of Paraquat’ and ‘Emamectin Benzoate’.

Accordingly, it was alleged that the Customs Broker has facilitated misdeclaration of the goods. Pursuant to issue of show cause notice by DRI under Section 124 of the Customs Act, 1962, an order was passed by the Commissioner of Customs (Airport & Administration), Kolkata suspending the license of the CB under the Regulation 16(1) of the Customs Brokers Licensing Regulations, 2018.

The advocate for the Appellant submitted that the order passed by the adjudicating authority based on the first inquiry report is void ab initio since the inquiry was conducted by the inquiry officer in violation of the principles of natural justice. The inquiry officer has not granted any opportunity of personal hearing to the appellant before finalizing the inquiry report.

The Bench of PK Choudhary, Judicial Member and K Anpazhakan, Technical Member observed that “If there is any misdeclaration in the documents submitted by the Importer, then they are solely responsible for the misdeclaration. To establish the complacency of the Customs Broker, it must be proved that the Customs Broker had prior knowledge about the mis-declared description, before filing the Bills of entry.”

“Thus, we hold that the allegation in the Notice that the Appellant failed to exercise proper control over his employees, is not proved and hence the allegation in the notice about the contravention by the Customs Broker is not sustainable” the Tribunal concluded.

To Read the full text of the Order CLICK HERE

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