2021 (6) TMI 710 - AT - Customs

Levy of penalty u/s 112(a) and 114A of CA - Evasion of Customs Duty - Forging of signature - high seas sale - allegation is that appellant had prior knowledge about the importer firms begin dummy - HELD THAT - The charge raised by appellant that he fabricated documents and forged the signature thereby allowing import of machines by fictitious non existing importers leading to loss of custom duty. This evidence is essentially in the shape of the statement of co accused. It is noticed that Shri Manoj Gadhiya has admitted in his statement dated 13.02.2014 that he was looking after over all custom clearance work of this RIPL till he resigned on 1st October 2013. The appellant was fully aware about the fictitious nature of the importers as the documents were being fabricated with his knowledge. He also admitted that he had never met the importer but solely relied on the documents submitted by High Sea Seller. His defense seems to be that once document is self certified he does not have any responsibility. This is just an excuse. The entire responsibility of KYC has been placed on the Customs Brokers. If just self attestation was enough than there was no need to put of responsibility of KYC on Customs Broker. He also admitted to forging of signatures. His only defense seems to be that he was merely an employee following direction of superior and that the Superior Shri Amit Khatu was let off. The appellant has failed in his duty as H- Cardholder and actively involved himself in facilitating evasion of customs duty. The appellant was given specific responsibility by revenue by making him an H- Card Holder. He cannot simply pass the blame to his superior G- Card Holder - the charges under section 112(a) of the customs act as well as 114A of the customs act are upheld. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Imposition of penalty under Section 112(a) of the Customs Act, 1962.
2. Allegation of document fabrication and forgery under Section 114AA of the Customs Act, 1962.
3. Compliance with the Customs Broker Licensing Regulations (CBLR), 2013.
4. Verification of importer details and KYC compliance.
5. Role and responsibility of the appellant as an "H" Card holder.

Issue-wise Detailed Analysis:

1. Imposition of Penalty under Section 112(a) of the Customs Act, 1962:
The appellant, Shri Manoj Gadhiya, was penalized under Section 112(a) of the Customs Act for facilitating the import of embroidery machines using EPCG Licenses in the names of fictitious entities. The impugned order stated that the appellant failed to verify the documents and conduct KYC of these fictitious importers. The appellant's actions were deemed to have abetted in filing false documents and dealing with goods liable for confiscation, thus justifying the penalty.

2. Allegation of Document Fabrication and Forgery under Section 114AA of the Customs Act, 1962:
The appellant was accused of forging signatures of Mr. N.B. Agarwal and Mr. Amit Khatu on import documents. The impugned order detailed that the appellant used Mr. Khatu's "G" Card details and signed import documents posthumously for Mr. Agarwal. The appellant's defense argued that Mr. Khatu had authorized the use of his "G" Card and denied any forgery. However, the tribunal found the appellant's involvement in document manipulation and forgery, thus upholding the penalty under Section 114AA.

3. Compliance with the Customs Broker Licensing Regulations (CBLR), 2013:
The appellant was charged with violating Rule 11(n) of the CBLR, 2013, which mandates the verification of the antecedents, IEC number, and identity of clients. The appellant contended that self-attested documents were sufficient for verification. However, the tribunal emphasized that the responsibility of KYC lies with the Customs Broker, and self-attestation alone does not absolve this duty. The appellant's failure to verify the authenticity of the documents was a breach of CBLR, 2013.

4. Verification of Importer Details and KYC Compliance:
The appellant admitted to not maintaining KYC records and solely relying on documents provided by high sea sellers, specifically M/s Rudrani Impex Pvt. Ltd. The appellant's defense was that he verified documents online and found no discrepancies. However, the tribunal highlighted instances where the appellant failed to detect manipulated documents, indicating negligence in fulfilling KYC obligations. This failure contributed to the imposition of penalties.

5. Role and Responsibility of the Appellant as an "H" Card Holder:
The tribunal scrutinized the appellant's role as an "H" Card holder, emphasizing the trust and responsibility placed on Customs Brokers. The appellant's argument that he acted under the instructions of superiors and followed prevalent trade practices was dismissed. The tribunal held that the appellant's active involvement in document fabrication and failure to verify importer details demonstrated a breach of duty, justifying the penalties under Sections 112(a) and 114AA.

Conclusion:
The tribunal found the appellant guilty of facilitating the import of goods using fictitious entities, failing to verify importer details, and forging signatures on import documents. The penalties under Sections 112(a) and 114AA of the Customs Act were upheld, and the appeal was dismissed. The tribunal emphasized the critical role of Customs Brokers in ensuring compliance with KYC norms and the authenticity of import documents.