2015 (6) TMI 1003 - AT - Customs

Revocation of Customs Broker (CB) licence - Mis-declaration of goods - Import of chemicals/ Laboratory reagents - Whether to be classified as Pharmaceutical Reference Stands under CTH 38220090 and claim benefit of exemption Notification No.21/2002-Cus. dt. 01/03/2002 and exemption Notification No.12/2012-Cus. dt. 17/03/2012 - Appellant produced a set of Bills of Entry but department contended non-availability of documents in the dockets - Held that - description of the goods had the chemical names and it appears that CRM reference is taken out from HSN code. There is no specific term PRS used in the tariff heading. Whether a chemical is PRS has to be based on documentary evidence. Further some PRS materials are classifiable under CTH 28 also. While we have a certificate from the supplier that the chemicals supplied are PRS only, observations of the learned Commissioner in support of his conclusion that there is a mis-declaration because of difference in the description in the invoice and the Bill of Entry are not supported by any technical opinion. If the invoice does not have the description CRM but merely gives the chemical names and the HSN code number, then the case for the Department becomes weak. This is because the PRS can fall under 2852 or 3822 as mentioned in the notification itself. Moreover it was also submitted that even prior to addition of CRM in CTH 3822, the appellants were importing PRS and it is the submission on behalf of the appellants that PRS can fall under CTH 3822 or 2852 as the case may be. When so many conclusions are possible and when we find that goods have been examined, documents have been examined, even though there is no mention, if the examiner of the packages has called for the other documents, he would have definitely seen the invoice also. Moreover the Commissioner himself agrees that commercial invoices were available in the dockets. If the appellant s intention was to deliberately evade duty and ensure that mis-declaration does not get detected, the commercial invoices would not have been placed in the dockets (assuming that the dockets were not seen by the Customs officers but prepared and placed in the Customs Office by the Customs Broker). Because there is a difference of description between commercial invoice and the Bill of Entry, the whole case has been made out. Therefore, the Customs Broker has not aided or abetted the importer in evasion of duty by mis-declaring the description. Also the penalty is reduced and revokation of licence of Custom Broker is set aside. - Appeal disposed of

Summary

Issues Involved:
1. Classification and eligibility for exemption under Customs Act, 1962.
2. Initiation of parallel proceedings under Customs Broker License Regulations, 2013 (CBLR).
3. Violation of principles of natural justice.
4. Allegation of double jeopardy.
5. Allegation of mis-declaration.
6. Availability of documents in dockets.
7. Role of Customs Broker in aiding and abetting mis-declaration.
8. Quantum of punishment imposed on the Customs Broker.

Issue-wise Detailed Analysis:

1. Classification and Eligibility for Exemption:
The appellant, a Customs Broker (CB), filed several Bills of Entry for importing chemicals/laboratory reagents classified under CTH 38220090, claiming them as Pharmaceutical Reference Standards (PRS) and availing exemption under Notification No.21/2002-Cus. and Notification No.12/2012-Cus. The Commissioner alleged mis-classification to avail exemption benefits, leading to proceedings under the Customs Act, 1962, and CBLR.

2. Initiation of Parallel Proceedings:
The appellant argued that initiating parallel proceedings under CBLR without concluding the classification and exemption eligibility under the Customs Act was improper. The Tribunal noted that the Commissioner's decision was based on the Order-in-Original (OIO) dated 28/08/2014, which concluded that the appellant abetted in evading customs duty.

3. Violation of Principles of Natural Justice:
The appellant contended that they were not notified about the conclusions in the OIO dated 28/08/2014, violating the principles of natural justice. The Tribunal emphasized the necessity of adhering to these principles in administrative proceedings.

4. Allegation of Double Jeopardy:
The appellant claimed that the imposition of penalty and action under CBLR resulted in double jeopardy. The Tribunal examined whether the actions under different regulations constituted double punishment for the same offense.

5. Allegation of Mis-declaration:
The Commissioner alleged that the CB mis-declared the goods as PRS instead of Certified Reference Materials (CRM) as mentioned in the invoices. The Tribunal scrutinized the examination orders and reports, noting that the examining officers were directed to verify documents and eligibility for exemption, which suggested that the documents were indeed examined at the time of importation.

6. Availability of Documents in Dockets:
The Commissioner's conclusion was based on the non-availability of documents in the dockets. The Tribunal found that the non-availability of documents in the dockets did not necessarily imply that they were not produced at the time of importation. The examining officers' reports indicated that documents were checked, supporting the CB's claim.

7. Role of Customs Broker in Aiding and Abetting Mis-declaration:
The Commissioner concluded that the CB aided and abetted in mis-declaration. The Tribunal, however, found that the CB acted based on the importer's instructions and the labels on the goods. The Tribunal noted that the CB should have ensured clarification from the supplier and relevant materials to support the classification as PRS. However, the Tribunal did not find sufficient evidence of deliberate intent to evade duty.

8. Quantum of Punishment:
The Tribunal considered whether the revocation of the license, forfeiture of security, and imposition of a Rs. 50,000 penalty were justified. The Tribunal concluded that while the CB did not fulfill their obligations to the expected extent, the quantum of punishment was excessive. The Tribunal reduced the penalty to Rs. 25,000 and set aside the revocation of the license and forfeiture of security.

Conclusion:
The Tribunal set aside the revocation of the Customs Broker's license and forfeiture of security, reducing the penalty from Rs. 50,000 to Rs. 25,000. The appeal was disposed of in these terms.