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TMI Blog2019 (2) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... le duty credit scrips for debiting the customs duty, which were not issued by the DGFT and were fake and also the hard copy of the said duty scrips were not produced to the Customs Officer for debiting, before the clearance of consignment for which these scrips had been used. It was also gathered by the DRI that the some people had created credit amount in the EDI system at ICD, Tuglakabad on the basis of these exhausted licences issued by the DGFT in a fraudulent manner. These duty scrips/licence/ advance authorisation at the strength of which various consignments of imports were cleared, where initially registered at different ports like Cochin Port, Tuticorin Port and elsewhere and were already utilised, in full and thus living no balance. The intelligence also indicated that these very duty scrips were got re-registered in EDI system at ICD, Tuglakabad under the same scheme with same ICE code particulars for the same value or even for the inflated value by a fraudulent method. 4. During the investigation it was revealed that the licences were used by the appellant, as a customs broker, who got debited the Customs duties by utilising the alleged forged, 12 duty scrips/ licences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of inquiry statements of the various persons were recorded alleged to be involved in these fraudulent utilisation of various duty paying scrips. It was further revealed that the forged Focus Market Scheme licence No. 51 0339374 dated 23/11/2012, was utilised by M/s S K Enterprises, New Delhi against the duty liability in respect of import made by them. The statements of Shri Manav Malik, partner of M/s S K Enterprises, was recorded on 29/03/2016, under Section 108 Customs Act, 1962 (for short ' Customs Act'), wherein among the other things he stated that the firm was established in year 2012, along with his wife Mrs. Neha Malik as its partner, however, she had no active role in the business of M/s S K Enterprises; that they have imported various type of fabrics from China though ICD, Tuglakabad, and ICD, Patpardganj; that they usually paid their duty online through the banking portal and by utilising licences like MSFPS and VKGUI. On being asked about the above license dated 27/12/2017, he deposed that they have purchased the same through CHA M/s Him Logistic Pvt. Ltd. and for which they have raised debit note on them for the equivalent amount and which was paid to them thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r month and for which he agreed and open bank account in the Indusind Bank, Ashok Vihar, and that he never transferred any money from the said bank in India as well as in abroad. On being asked about the opening of firm by his nephew Shri Puneet Mahndru, he agreed to same and said that he was acting as per the advice given to him by one Shri Prakash Sharma (CHA). In the statement Shri Chhabra categorically stated that the entire activity of import of the items and payment duty was being handled by Shri Prakash Sharma for his firm i.e. M/s Him Logistics Pvt. Ltd. Further in statement dated 30/06/2016, Shri Rajesh Chhabra stated that the M/s Jackson Trading Company and Elide Internationals were also incorporated by him and the documents for import were being handled by Shri Prakash Sharma of M/s Him Logistics, including the management of various documents IEC number for the consideration of Rs. 5,000/- per container. He further stated that he never dealt directly with Shri Lalit Jain for procurement of licences/ duty scrips and he never heard about him and the dealing was only made by Shri Prakash Sharma. He also deposed that all the money deposited in the bank account in Punjab Nati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l date; that in both CHA firms, M/s Him Logistics Pvt. Ltd. and M/s HLPL Global Logistic Ltd. he is the Director along with Shri Tarun Sharma, who is the other Director of HLPL Logistic i.e. the appellant; "that on being asked about the debiting of the duty under the various duty paying scrips issued by DGFT, he stated that as the same was transferable he used to utilised them towards discharging of import duty by importers; that on being asked as to who had been giving such licences for duty payment he categorically stated that it was the importer who used to provide them the details of the duty credit scrips towards the discharge of customs duty liability that sometimes some of the importers requested him to arrange licences and the same was being done by him through one licence brokers, namely, Mr. Lalit Jain; that on being asked to explained as to whether he used to give the payment for such scrips directly through Lalit Jain or the importer used to give the same he stated that it was depending upon the request of importer and sometimes he also used to pay the amount to the licence broker and subsequently the payment was have made to them by the respective importers through deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conducted afresh on 08/03/2018 and after considering the various statements made by the appellant the inquiry officer held that " in view of above, I find that M/s HLPL Global Logistics, 2151/3D, new Patel Nagar, New Delhi-10008, has not complied with the provisions of SECTION 11(d) and Section 11(e) of CBLR, 2013, and utilized forged credit scrips in clearance of imported goods. They have not done due diligence while utilization such forged scrips. Therefore, the CB M/s HLPL Global Logistic Pvt. Ltd, is liable for action under CBLR, 2013. 11. The said inquiry report was also furnished to the appellant with a direction to appear before the Ld. Adjudicating Authority before the final order was to be passed under CBLR, 2013. In response to inquiry report, the appellant also submitted additional submissions to commissioner on the various grounds. 12. In reply it was contended the statement recorded under Section 108 of Customs Act of witnesses could not be relied upon as evident under Section 20(3) and 20(4) of the Regulation and reliance was placed on the judgment by Hon'ble Cestat in case of Thakkar Shiping Agency vs. Collector of Customs, Bombay, [1994(69) ELT (90) (TRI),] where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & Sons and Shri Rajesh Chabhra son of late Shri Jagdish partner of M/s PEE ARR Enterprises was denied. Therefore, the entire proceeding got vitiated relying on the decision of Hon'ble High Court in case of M/s Him Logistic Pvt. Ltd vs. Principal Commissioner of Customs [2016 (336) ELT 15. It is also contended the order was passed after 35 days and fixing the three dates for personal hearing in single letter in violation of Principle of Natural Justice relying on the following judgments; (i) Power Link System Pvt. Ltd. vs. Commissioner of Central Excise reported in [2017 (50) STR 150(Tri-Chand.)] (ii) IPC Packing Company Pvt. Ltd. vs. Chief Commissioner of ICD Bang [2017(6) GSTL 256(Kar.)] (iii) Regent Overseas Pvt. Ltd. vs. Union of India [2017(6) GSTL (15) (GUJ) (iv) Reliance Industries Ltd. vs. Commissioner of Customs, Chennai,-IV [2017 (357) ELT 865 (Tri-Chennai)] 15. It was submitted that fixing three dates for personal hearing in single letter is against the provisions of Section 122(A) of the Customs Act and the Principle of Natural Justice was thus violated in this case. 16. On the basis of above the appellant submitted they were engaged in trading of duty credit s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned in the shipping bills, this itself reflects that before the grant of said IE Code, the background check of the said importer/exporter had been undertaken by the customs authorities, therefore, there was no doubt about the identity of the said exporter. It would be far too onerous to expect the CHA to inquire into and verify the genuineness of the IE Code given to it by a client for each import/export transaction. When such code is mentioned, there is a presumption that an appropriate background check in this regard i.e. KYC etc. would have been done by the customs authorities. There is nothing on record to show that the appellant had knowledge that the goods mentioned in the shipping bills did not reflect the truth of the consignment sought to be exported. In the absence of such knowledge, there cannot be any mens rea attributed to the appellant or its proprietor. Whatever may be the value of the goods, in the present case, simply because upon inspection of the goods they did not corroborate with what was declared in the shipping bills, cannot be deemed as misdeclaration by the CHA because the said document was filed on the basis of information provided to it by M/s. H.M. Im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the consignment imported by their client. It was held in the inquiry report the appellant was responsible for utilisation of forged duty scrips for the payment of customs duty, and therefore, not observed due diligence in conducting their business as per the provisions of CBLR. In this regard, we find that free duty licences/ duty credit scrips have been registered at the various customs port other than ICD and available on EDI system. As per the procedure prescribed under EDI system, it is not possible for the appellant to temper with the data/ information contained in the EDI system which is fool proof and secured system is prescribed not by one or two but by five officers of the customs including the Joint and Additional Commissioner. In this regard, we place our reliance on the decision of Hon'ble High Court in Writ Petition No. CRL 1338/2018 which is reproduced as under; "31. In the order dated 9th June 2016 of the Commissioner of Customs (General), the modus operandi of the EDI System is noted as under: "55.2In this regard, I observe that ICD TKD Export Commissionerate, New Delhi, the concerned Customs formation, is working under EDI system. As per procedure of regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant cannot be held to be liable for penal action under CBLR. It is also alleged that the appellant has not followed the KYC norms and failed to verify the details about the duty scrips, which were utilised for the purpose of payment of customs duty from the DGFT site. In this regard, we find that the appellant as CHA is only required to verify the KYC norms as per the documents made available to him. And there is no requirement of physically verifying business or residential premises of the importers which also included the fraudulent obtaining of Licence/ duty credit scrips. We place our reliance on the decision of Hon'ble this Tribunal in case of M/s Him Logistics Pvt. Ltd. vs. Commissioner of Customs, New Delhi [2016(3318) ELT (725)(Tri-Del)]. We also find that the Ld. Commissioner has not addressed to the various contentions made by the appellant regarding the non-observance of procedures required for conducting the inquiry as per the CBLR and also the Principle of Natural Justice. The inquiry officer has denied the right to cross examination to the appellant which is not negotiable under the Regulation and also various decisions of the higher judicial fora including the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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