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2023 (2) TMI 677 - AT - CustomsRevocation of Customs Broker License - Non-grant of opportunity of cross examination - retraction of statements - SCN is beyond the period of limitation under CBLR, 2013 or not? - applicability of principle of double jeopardy on issuance of second suspension order - violation of provisions of Regulation 11 (a), (d), (m), (n) (o) and 17 (9) of CBLR, 2013. Whether show cause notice is beyond the period of limitation under CBLR, 2013? - HELD THAT - In the present case, it is evident that after further investigation in accordance with the provisions of Regulation 20 of CBLR 2013, the Commissioner of Customs, Noida, vide letter dated 25.01.18 sent the Offence Report dated 19.01 .2018 which was received by the Commissioner of Customs, New Delhi on 09.02.2018. The subject of the said report, specifically stated, Role of Customs Broker, Swastik Cargo Agency in fraudulent exports and investigations against M/s Shagun overseas, M/s Fine Art Traders and M/s S. K. Exports. After the receipt of the Offence Report on 09.02.2018, the show cause notice issued on 07.05.2018, was issued within the time limit of 90 days as prescribed under Regulation 20(1) and hence there is no delay and the show cause notice is not barred by limitation. Whether the present case is hit by the principle of double jeopardy on issuance of second suspension order? - HELD THAT - The plea of issuing two SCNs or that the license cannot be suspended or revoked twice on same issues does not survive as the action under Regulation 19 has to be taken immediately to restrain the CB from functioning. On receipt of the information on 27.09.2017, the order of suspension was passed immediately on 05.10.2017. Following the provisions of Regulation 19(2), CBLR, 2013 after granting an opportunity of hearing to the CB, further order with regard to revocation of suspension was passed, however specific liberty was granted to initiate action under CBLR, 2013 if new facts are established. On receipt of the offence report on 09.02.2018, immediate action was required to restrain the CB from indulging in any further activity which could be detrimental to the interest of the Revenue and therefore an order of suspension of license was passed on 15.02.2018 which was then confirmed on 12.03.2018 under Regulation 19(2) CBLR, 2013. The order of suspension under Regulation 19 of CBLR, 2013 is required to be issued immediately to restrain him from functioning on the basis of that license and is in the nature of an interim measure. The dictionary meaning of the word suspension‟ as per the Cambridge Dictionary is the act of stopping something happening, operating etc. for a period of time, meaning thereby that it is a temporary stoppage. In the present case, the matter was pending under enquiry and liberty was granted to proceed once additional facts emerge. So, it is not a case of double jeopardy. The final order revoking the license was passed only after following due process of law in terms of Regulation 20 of CBLR, 2013. Whether the Custom Broker has violated the provisions of Regulation 11 (a), (d), (m), (n) (o) and 17 (9) of CBLR, 2013? - HELD THAT - It stands proved that the CB has not discharged the obligations cast on him under the Regulation as the CB fully connived with the freight forwarder and therefore never verified the existence of the exporters or the documents submitted in this regard. The facts of the present case reflects that it is virtually a case of subletting the license as practically the entire transaction of export was controlled managed by the Proprietor of the freight forwarder. Thus, any contravention of the obligations on the CB under the Regulations even without any intent would be sufficient to proceed for imposition of punishment as provided in the Regulations. This being a case of facilitating the fraudulent exports carried out and it being duly proved during the inquiry proceedings that the exporters were non-existent, CB has failed to verify the correctness of the documents, violated the obligation as a custom broker under CBLR, 2013. Therefore, the Adjudicating Authority had rightly directed for forfeiture of the security deposit of Rs. 5 lakhs submitted by CB. The facts of the present case clearly show the fraudulent manner in which the exports have been made where 90% of the goods were short and nearly 70 lakhs of rupees were taken as duty drawback thereby defrauding the revenue. The entire transaction was fraudulently conducted. The exporters were found to be fictitious, non-existent who were actually farmers and had no knowledge about their being exporters and therefore the CB could not bring them before the Customs Authorities. Neither the partners nor the G-Card holder of CB met the exporters. It has to be concluded that CB had put himself into the shoes of fraudsters who were using forged documents of fictitious persons who were actually not involved with the said fraudulent exports to claim duty drawbacks - Thus, the CB has violated the obligations cast on him under the Regulations as discussed above and hence the revocation of the license and the forfeiture of security deposit is justified. Appeal dismissed.
Issues Involved:
1. Whether the show cause notice is beyond the period of limitation under CBLR, 2013? 2. Whether the present case is hit by the principle of double jeopardy on issuance of the second suspension order? 3. Whether the Customs Broker has violated the provisions of Regulation 11(a), (d), (m), (n), (o), and 17(9) of CBLR, 2013? Issue-wise Detailed Analysis: 1. Limitation of Show Cause Notice: The appellant argued that the show cause notice dated 07.05.2018 was beyond the mandatory period of 90 days from the date of detection of the offence, as per Circular No. 09/2010 dated 08.04.2010. The Tribunal examined the provisions of Regulations 18, 19, and 20 of CBLR, 2013, which outline the procedures for revocation and suspension of licenses. The Tribunal noted that the offence report was received on 09.02.2018, and the show cause notice was issued within 90 days, thus complying with Regulation 20(1). Therefore, the show cause notice was not barred by limitation. 2. Principle of Double Jeopardy: The appellant contended that two show cause notices could not be issued on the same facts and that the license could not be suspended and revoked twice on the same issues. The Tribunal clarified that the suspension of the license under Regulation 19 is an interim measure and independent of the revocation proceedings under Regulation 20. The initial suspension was revoked due to a lack of concrete evidence, but with the emergence of new facts, a subsequent suspension was justified. The Tribunal concluded that the principle of double jeopardy did not apply, as the actions were based on new developments and were necessary to prevent misuse of the license. 3. Violations of CBLR, 2013 Regulations: The Tribunal examined the specific violations of Regulations 11(a), (d), (m), (n), (o), and 17(9) of CBLR, 2013: - Regulation 11(a): The CB failed to obtain proper authorization from the exporters, who were found to be fictitious and non-existent. The authorization was obtained from a freight forwarder, not directly from the exporters. - Regulation 11(d): The CB did not advise the clients to comply with the provisions of the Act, as the clients (exporters) were non-existent, and thus, no compliance advice could be given. - Regulation 11(m): The CB did not discharge duties with utmost speed and efficiency, as the entire export process was controlled by the freight forwarder, and the CB did not respond to summons or join the investigation. - Regulation 11(n): The CB failed to verify the antecedents, IEC number, identity, and functioning of the clients. The exporters were found to be non-existent, and the documents were not verified independently. - Regulation 11(o): The CB did not inform the Customs authorities about the change of office address, and the declared office was non-functional. - Regulation 17(9): The CB did not exercise proper supervision over employees, who were found to be acting under the control of the freight forwarder. The Tribunal concluded that the Customs Broker had violated the obligations under CBLR, 2013, justifying the revocation of the license and forfeiture of the security deposit. Conclusion: The Tribunal upheld the order of the Adjudicating Authority, dismissing the appeal and confirming the revocation of the Customs Broker license and forfeiture of the security deposit. The appeal was dismissed with no order as to cost.
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