Legal principle

A Customs Broker cannot file Shipping Bills or Bills of Entry in the name of an exporter or importer without that person's explicit authorisation — acting at the behest of a third party renders the documents benami and justifies revocation of licence, forfeiture of security deposit and penalty.

Court decision

The Tribunal upheld the impugned order and dismissed the appeal: the order was within time (the Supreme Court's COVID extension of limitation from 1 March 2020 to 28 February 2022 applied); the appellant violated Regulations 10(a), 10(d) and 10(n) but did NOT violate Regulation 10(e); and the violations were serious enough to justify the maximum penalty of revocation of licence, forfeiture of security deposit and Rs. 50,000/- penalty. The decision went in favour of the Revenue.

Facts

M/s Planet World Cargo, a licensed Customs Broker, filed three shipping bills in the names of two exporters, M/s KKS Export & Import and M/s Snibe Worldwide, declaring the goods as 'Self Adhesive Vinyl Sheets'; on examination the goods were found to be of inferior quality and mis-declared in nature and value to avail undue export benefits, and the exporters turned out to be fictitious firms orchestrated by one Mr. Najib, through whom the broker had obtained KYC documents. Acting on two DRI show cause notices (dated 23.04.2019 and 23.08.2019) forwarded by ICD officers as offence reports, the Commissioner initiated CBLR proceedings, appointed an inquiry officer, and by order dated 26.06.2020 revoked the broker's licence, forfeited the entire security deposit and imposed a penalty of Rs. 50,000/- for violation of Regulations 10(a), 10(d) and 10(n) of CBLR 2018.

Key provisions

• Regulation 10(n), Customs Brokers Licensing Regulations, 2018 — Obligations of Customs Broker
• Regulation 17(7), Customs Brokers Licensing Regulations, 2018 — Procedure for revoking license or imposing penalty
• Section 7, The Foreign Trade (Development and Regulation) Act, 1992 — Importer-exporter Code Number.
• Regulation 1, Customs Brokers Licensing Regulations, 2018 — Short title, commencement and application