Customs House Agent cannot be held responsible once IEC particulars are given by the exporter and cannot be held liable after issuance of Let Export Orders only because exporters were not traceable – CBLR Regulations, 2018
The petitioner was granted licence as Custom Broker (CB). During analysis of data of export of ball bearings, it was found that total 35 consignments of similar / identical description were exported and 23 consignments of nine exporters were cleared by the petitioner.
The total input tax credit claimed by the exporters was Rs.3.3 crores, whereas, total drawback was of Rs.36.62 lakhs.
Out of nine exporters of the petitioner, five were found non-existent, two exporters did not appear to record statements and two exporters admitted their involvement but unintentionally.
Statements of two exporters and representative of the petitioner were recorded under Section 108 of the Customs Act, 1962.
By the order dated 29.6.2022, the licence of the petitioner was revoked, the security deposit was forfeited and penalty of Rs.50,000/- was imposed for violation of the Customs Broker Licensing Regulations, 2018, because the exporters were not traceable and due diligence was not made.
On various grounds, the said order was challenged.
Important ruling – Delhi High Court HELD that the impugned order relies on the statements of two exporters, Regulation 17(4) of CBLR Regulations, 2018, provides for right to cross-examination and the Inquiry Officer has to give reasons if such a right is denied.
Once the Importer-Exporter Code particulars are verified from the system, there is no statutory requirement on Custom House Agent to verify independently such details furnished by the exporter. The obligation of CHA under Section 13(e) of CHALR 2004 requires CHA to exercise due diligence to ascertain the correctness of any information and not to do a background check either of exporter / client or consignment. The CHA is not expected to do a background check of the exporter / client. The petitioner cannot be held liable because exporters were not traceable after the issuance of “Let Export Orders” and export of the goods out of the country.
Violation of Regulation 10(d), (m), (n) & (q) of the Judgment dated 30.1.2024 in W.P.(Civil) No.15808 of 2022
