Document Fragment View
Fragment Information
Showing contexts for: import export code in Transpeed Logistics Pvt Ltd vs New Delhi on 23 February, 2021Matching Fragments
(emphasis supplied)
31. Learned Counsel for the appellant submitted that due diligence does not mean actual physical verification. In fact, the practice always has been to verify the correctness of the information provided by examining the KYC documents prescribed in the Circular dated April 08, 2010.
32. Paragraph 6 of the Circular provides for certain obligations on the Customs Broker to verify the correctness of Import/Export Code Number, identity and functioning of the client at the declared address by using reliable, independent, authentic documents, data or information. For this purpose, detailed guidelines on the features to be verified and obtained from the clients have been provided in the Annexure to the Circular. It has also been mentioned in the Circular that it would be obligatory for the client/customer to furnish a photograph in the case of an individual and those of the authorised signatory in respect of other forms of organisations, such as company/trusts and any two of the listed documents mentioned in the Annexure.
(emphasis supplied)
35. It is clear from the aforesaid decision of the Delhi High Court that there is no obligation on the Customs House Agent to look into the information made available by the exporter/exporter. The Customs House Agent is merely a processing agent of documents with respect to clearance of goods through Customs House and he is not an inspector to weigh the genuineness of the transaction. When the Importer/Exporter Code Number was provided and before this code was issued a background check of the said importer/exporter is undertaken by the Customs Authority, there should be no doubt about the identity of the said exporter. It would be too onerous to expect a Customs House Agent to inquire into what is stated in the documents when there is a presumption that an appropriate background check is done by the Customs Authorities. In fact, the grant of Importer/Exporter Code Number is a proof regarding verification of facts and if the grant of such a code number to an entity at the address C/51729/2019 mentioned is in doubt, then for such erroneous grant of the Importer/Exporter Code Number, the appellant cannot be faulted.
46. Regulation 10(n) requires the Customs Broker to verify the correctness of Importer/Exporter Code Number, Service Tax Identification Number, identity card of the client and functioning of the client at the declared address by using reliable, independent, authentic documents, data or information.
47. The Commissioner, made the following observations in regard to this regulation:
41.3 ************ "From the preceding paras, I find that the CB indulged themselves in the clearance of impugned export consignment without verifying the antecedents of exporter and without verifying the KYC of exporter because the exporter M/s ETPL was a factitious C/51729/2019 firm which existed only on paper and its ownership was doubtful too. Sh. Lal Chand Sharma, F-card holder of M/s Transpeed Logistics Private Limited vide his voluntary statement dated 04.09.2018 recorded under Section 108 of the Customs Act, 1962, inter alia stated that they did not verify the address and other antecedents of the said exporting company. Thus, I find that the CB did not verify identity as well as functioning at the given address of his client and violated provisions of Regulation 10(n) of CBLR, 2018 [erstwhile Regulation 11(n) of CBLR, 2013]."
(emphasis supplied)
48. The Delhi High Court in Shiva Khurana had an occasion to examine the provisions of Regulation 13(o) of the 2004 Regulations, which Regulation is similar to Regulation 10(n) of the Licensing Regulations, and the relevant observations are as follows :
"7. This court is of the opinion that the impugned order is justified in the facts and circumstances of the case. The reference to the verification of "antecedents and correctness of Importer Exporter Code (IEC) Number" and the identity of the concerned exporter/importer, in the opinion of this Court is to be read in the context of the CHA's duty as a mere agent rather than as a Revenue official who is empowered to investigate and enquire into the veracity of the statement made orally or in a document. If one interprets Regulation 13(o) reasonably in the light of what the CHA is expected to do, in the normal course, the duty cast is merely to satisfy itself as to whether the importer or exporter in fact is reflected in the list of the authorized exporters or importers and possesses the Importer Exporter Code (IEC) Number. As to whether in reality, such exporters in the given case exist or have shifted or are irregular in their dealings in any manner (in relation to the particular transaction of export), can hardly be the subject matter of "due diligence" expected of such agent unless there are any factors which ought to have alerted it to make further inquiry. There is nothing in the Regulations nor in the Customs Act which can cast such a higher responsibility as are sought to be urged by the Revenue. In other words, in the absence of any indication that the CHA concerned was complicit in the facts of a particular case, it cannot ordinarily be held liable."