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2023 (11) TMI 270 - AT - CustomsRevocation of Customs Broker License - forfeiture of security deposit - levy of penalty - mastermind of the impugned offence of availing undue draw-back by means of fraudulent export - HELD THAT - With the apparent and corroboratively admitted facts alongwith the absence of the proprietor of the present appellant Shri Ram Pratap, there are no reason to differ from the said findings of the original adjudicating authority that the appellant has transferred his license to Shri Souvik Guha Sarkar to transact the business in appellant s name. The said act is highly impermissible in terms of Regulation 1(4) of CBLR, 2018. In the light of absence of appellant to bring evidence to falsify the evidence brought against him or to cross-examine the witnesses who had deposed about using his license and authority to facilitate a fraudulent export transaction, the findings arrived at by the adjudicating authority cannot be faulted. Violation of Regulation 10 (a) of CBLR - HELD THAT - Apparently no authorization letter in favour of the appellant from M/s. Linwood Sales could be produced on record. Hence, there are no infirmity when violation of Regulation 10 (a) of CBLR has been confirmed against the appellant. Violation of Regulation 10 (b) of CBLR - HELD THAT - The G card holder of the custom broker has admitted that he was signing the blank papers required to transact the business in customhouse and was handing over the same to M/s. Guha Sarkar. These observations since have not been refuted by the appellant who rather opted to remain absent are sufficient to confirm the violation of Regulation 10 (b) of CBLR of 2018 by the appellant. Violation of Regulation 10 (d) of CBLR of 2018 - HELD THAT - Since the custom broker is responsible for all acts and means of his employees during their employment as per Regulation 13 (12) of CBLR of 2018, it was mandatory for the appellant to advice the exporter to comply with the provisions of the Customs Act, else to have brought to the notice of the Dy. Commissioner Customs about the non-compliance. But neither the appellant nor his G card holder has ever brought the impugned fraud to the notice of the competent authorities - there are no reason to differ from the findings arrived at against the appellant. Violation of Regulation 10 (k) and 10 (n) of CBLR of 2018 - HELD THAT - The address as was declared as the address of Directors of M/s. Linwood Sales pvt Ltd in the IEC details was found to be the residential address of Directors/Proprietors of other Companies/ Firms. Though it was noticed that an account was opened in the name of M/s. Linwood Sales Pvt. Ltd in February, 2015 but the Directors shown were Shri Krishan Chandra Dey and Shri Dayal Singh. However, the later got substituted by Shri Pradeep Singh alias Anil Singh in August, 2017. The Articles of association of the said company were also found to be forged. No evidence could be brought on record to falsify these findings. In the circumstances, there are no reason to differ from the findings that the appellant has failed to make the appropriate enquiries of their clients prior transacting the business in customhouse station. Hence, the findings confirming the violation of Regulation 10 (k) and 10 (n) are held sustainable. There are no reason to differ with the decision under challenge revoking the licence of the appellant which was otherwise valid up to 05.09.2023 alongwith forfeitures of the security deposit - appeal dismissed.
Issues Involved:
1. Contravention of various provisions under Custom Broker Licensing Regulation (CBLR), 2018. 2. Revocation of Custom Broker (CB) license and forfeiture of security deposit. 3. Allegations of fraudulent export and availing undue drawback. 4. Procedural lapses and evidentiary issues raised by the appellant. 5. Timeliness and validity of the order under challenge. Summary: 1. Contravention of Provisions under CBLR, 2018: The appellant was accused of violating several regulations under CBLR, 2018, including Regulations 1(4), 10(a), 10(b), 10(d), 10(k), 10(n), and 13(12). The Customs Broker (CB) was alleged to have facilitated fraudulent exports by allowing their license to be used by others, failing to verify the authenticity of the exporter, and not maintaining proper records. 2. Revocation of CB License and Forfeiture of Security Deposit: The order in original confirmed the proposal to revoke the CB license of the appellant and forfeit the security deposit. The Tribunal upheld this decision, citing the appellant's failure to refute the evidence against them or to cross-examine the witnesses who deposed about the fraudulent use of their license. 3. Allegations of Fraudulent Export and Availing Undue Drawback: The Directorate of Revenue Intelligence (DRI) intercepted consignments of inferior quality garments being exported at highly inflated values to avail undue drawback. The mastermind behind the scheme, Sumit Agarwal, used fake documents to obtain an Importer Exporter Code (IEC) for a non-existent firm, M/s. Linwood Sales Pvt. Ltd. The appellant's G Card holder admitted to signing blank annexures of the shipping bills and handing them over to Souvik Guha Sarkar, who was involved in the fraudulent transactions. 4. Procedural Lapses and Evidentiary Issues Raised by the Appellant: The appellant argued that the statement of Chander Sekhar Hore was not made a relied upon document (RUD) to the Show Cause Notice (SCN) and that they were not provided a copy of the same. They also contended that they were not aware of the fraudulent activities and did not receive any consideration for the alleged overvaluation. However, the Tribunal found these arguments unconvincing, noting the appellant's failure to produce evidence or authorization letters and their absence during the inquiry. 5. Timeliness and Validity of the Order Under Challenge: The appellant challenged the order on the grounds of being barred by time. However, the Tribunal emphasized that fraud vitiates everything and upheld the order, drawing support from previous decisions that highlighted the significant responsibility of a Custom Broker in ensuring compliance with customs regulations. Conclusion: The Tribunal dismissed the appeal, confirming the revocation of the CB license and forfeiture of the security deposit. The decision was based on the appellant's failure to adhere to the regulations, involvement in facilitating fraudulent exports, and inability to refute the evidence against them. The Tribunal underscored the importance of the Custom Broker's role in safeguarding the interests of both the importers/exporters and the customs department.
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