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TMI Blog2019 (12) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... ue in the present case can more appropriately be described as that of mis classification and not mis declaration as alleged in the proceedings initiated against the appellants. There is no denial of the fact that the goods were physically examined by the Customs Officer and samples too were drawn from the consignment, sent to appropriate lab for testing by the Custom Officers. It was only after satisfying themselves and discussions at all levels upto Commissioner the goods were held classifiable under Heading 9503. When the Custom Officers themselves have after physically examining the goods concluded that the goods were classifiable under Heading 9503, then can the Custom Broker be accused of mis-declaring the goods and their classification. When Custom Officers who are expert in the matter of classification themselves failed to determine the correct classification of goods after physically examining it and considering the issue for substantial time then can an Custom Broker be accused of failing to determine the correct classification on the basis of description given by the importer and in the import documents. Admittedly certificate as required in terms of ITC (HS) Import Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (7) of CBLR, 2013 (now Regulation 17(7) of CBLR, 2018), I hereby revoke the CB license of M/s Bruce Logistic P Ltd., CB License No 11/1680 under Regulation 18 of CBLR, 2013 (now Regulation 14 of CBLR, 2018) and order to forfeit the security deposit in full. 1.2 Another appeal has been filed by the Appellant against the suspension of his licence. 1.3 Since both appeals arise out of the same proceedings and are interlinked, they are taken up together. 2.1 Appellants are Custom Broker operating on the strength of regular Custom Broker License No 11/1680 issued by Commissioner Customs (general) Mumbai Zone I under Regulation 7(1) of CBLR, 2013 (now Regulation 7(2) of CBLR, 2018). 2.2 The Additional Commissioner Customs SIIB (I) ACC Mumbai forwarded a offence report dated 22.06.2017 to the Commissioner (General) stating that Appellant had processed the import clearance of the 200 pcs of Blank Firing Guns declared as Metal Toys by classifying them under CTH-9503 instead of CTH-9303 for their clients M/s Airsoft Gun India. Investigations undertaken revealed that Appellants had in past filed five B/E for the import clearance of same goods for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the proceedings initiated against them have been concluded by the impugned order, revoking their license, the appeal filed by them against the order of suspension of their license in the same proceedings have become infructuous; Importer namely Airsoft Gun India, deals in sale of Blank Guns/ Toy Guns and allied product. When they approached them for import clearance of the import consignment for the first time in 2015, they took all documents required for KYC which included their ISO Certification, Sales Tax and VAT Registration etc. Importer also provided them a write up on the Blank Guns along with Invoice, Airway Bill and test report from the Forensic Laboratory. Importer also informed them that these are Toy Guns and are used for amusement purpose as in movies etc., and also that these are classified under heading 9503 at various ports in India as per the information available of website zauba.com . After checking up the information and the classification as claimed from the website referred by the importer, they filed first Bill of Entry No 3214478 dated 10.11.2015 as per invoice declaring the goods as Metal Toy Guns . The goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03 on showing part of Explanatory Notes, do not prove that he had knowledge about correct classification under that heading even when all the officers in the department including the Commissioner had not even after seeing the goods suggested such a classification. He cannot be faulted for having classified the goods under 9503. They had declared the goods as per the information provided by the importer and the goods were assessed and the classification determined by the proper officer of Customs after due examination and verification of goods. For the failure of the proper officer to determine the correct classification, Custom Broker could not have been held responsible. Proceedings conducted are also marred by delay at every stage. As per the Custom Broker Licensing Regulation the entire proceedings initiated against them for revocation of license should have been concluded within a period of 270 days from the date of receipt of offence report. However for the reason of delay at every stage, the proceedings took 625 days to conclude thus there is delay of nearly 355 days. In view of submissions as above the order revoking the license cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds have be undertaken in respect of the B/E Number 9616942 dated 09.05.2017. In the said Bill of Entry, Appellant had declared the goods imported as follows as per the invoice of supplier and claimed the classification of goods under CTH 9503:- S No Description (as per B/E) Description as per Invoice Number 1 ARAL 622 Metal Toy Gun Black ARAL 622 Metal Toy Gun Black 20 2 ARAL 1071 Metal Toy Gun Satin with golden parts ARAL 1071 Metal Toy Gun Satin with golden parts 20 3 ARAL 1071 Metal Toy Gun Chromewith golden parts ARAL 1071 Metal Toy Gun Chromewith golden parts 20 4 ARAL 61 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the high explosion sound, a proper ear gear is recommended to avoid hearing loss. Please be considerate of others as to not disturb when choosing a place of practice target. (xi) The cartridge discharge explosive material and fumes are harmful to your health. Area must be well ventilated when in use. (xii) All empty Ammunition cases should be Picked up and disposed properly to ensure a clean environment. (xiii) If you have any problems cause of making changes on blank pistol or not, it is not under responsibility of manufacturer, cause of using out of produced proposal. (xiv) Manufacturer does not oblige to give an information about making changes on blank pistols. 4.3 On the basis of the above pamphlets recovered from the boxes, during the examination it was alleged that the imported goods were not Metal Toy Guns classifiable under CTH 9503, but were actually Blank Guns/ Pistols classifiable under CTH 9303, thus were restricted item and required a license in terms of Arms Rules, 2016 as amended read with Arms Act. Accordingly the goods were put under seizure after drawing the samples from the consignment. 4.4 Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eone from their office will also cause physical verification at the premises of client or their premises. In the case of present importer they had undertaken the same process of KYC. He was aware of the requirements of the ITC (HS) Import Policy, Condition 2, as per which the import of toys under CTH 9503 was permitted freely only when accompanied by the certificate from accredited agency certificate of confirmatory. However the certificates were not produced for the clearance of the said consignments. For determining the classification of the goods while filing the Bill of Entry, he had checked the classification of similar consignments on https://www.zauba.com and other databases. The importers had described the goods to them as replica/ Toy Gun where there was no projectile but looks like a real gun and sounds like one too but was clearly not a gun used for firing. They also checked the classification with various Group officers. General understanding was that without physical examination it will not be possible to determine the correct classification. According to their understanding they filed the Bill of Entry classifying the goods under 9503. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the said statement was recorded under duress giving false promise and false information. 3. I say that I am retracting the said statement as the same is not true voluntary. 4. I say that the statement in the same shown not be used against me as the same are not true. 5. I say that I am retracting my said statement and say that I will file a detailed retraction at a later stage. 4.6 On 29.06.2017 the License of the respondents was suspended and on 27.09.2017, Charge sheet issued to them, appointing the Enquiry as well as the presenting officer, with directions to complete the enquiry proceedings within 90 days. The charge sheet was received by them on 3.10.2017. After hearing the appellants in inquiry proceedings on 17.01.2018 and 16.02.2018, enquiry officer concluded the enquiry proceedings and submitted the enquiry report dated 12.10.2018 stating as follows: After going through the documents mentioned in the foregoing para, I find that: 1. The documents sought by the notice were neither on records which were made available to me nor they are made relied upon documents hence those documents cannot be provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BLR, 2013 (now Regulation 10(d) and 10(e) of the CBLR, 2018). The violation is admitted by CB in his statement. Indeed, it is necessary to place the legal position as far as the provisions of the section 108 of the Customs Act, 1962 are concerned. In the case of Jasjeet Singh Marwah vs. UOI by the Hon ble High Court of Delhi reported in 2009 (239) ELT 407 (Del.), it was held that a statement made before the Customs officials under section 108 of the Customs Act, 1962 is not a statement recorded under section 161 of the Criminal Procedure Code, 1973. Further a statement recorded under section 108 of the Customs Act, 1962 of the CB by the Custom authorities is admissible as evidence and can form the sole basis for suspending the CB s license, however, subject to the usual safeguards that it is voluntary and truthful. Therefore, it is a material piece of evidence collected by Customs under Section 108 of Customs Act, 1962 can be used as evidence against the CB to the extent of establishing non-compliance of the mandatory provisions of CBLR, 2018. Any contravention of such obligations even without intent would be sufficient to invite upon the CB, the punishment listed in the regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bearing on national security. The CB was aware that the importer also operating a website www.airsoftgunindia.com wherein he had declared the impugned goods as Blank Firing Guns . It means that CB was well aware that the goods were not Metal Toy Guns but the Blank Firing Guns . The CB didn t advise their importer about the proper and true declaration of description of the goods and CTH accordingly, more so when it was connected with Arms Act, 1959. The CB could have advised his client to comply with the provisions of the Act and KYC procedure and also could have informed such non-compliance to the proper Customs Authorities which he failed to do so. 11.7 As far as the second charge is concerned, the CB had connived with the importer to import restricted goods and subsequently the CB admitted that the impugned goods should have been classified under CTH 9303 instead of 9503. The CB did not take proper care while filing BE about the correct description and classification and cleared the consignments without proper verification of correctness of the data provided by the importer when he very well knew it's real description. Therefore the infraction in respect of Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of not adhering to the time-limit prescribed. The consequence of non-adherence to the time-limit being not provided for in either of the two Regulations, it is open to an interpretation that, the time-limits prescribed are not mandatory. While interpreting a statute when it provides for a time-limit for doing a certain act, then, the entire statute is required to be considered, in the context of the object that the statute seeks to achieve. A statutory provision prescribing a time-limit without providing for the consequence of nonadherence can be interpreted to mean that, the time-limit provided is directory and not mandatory. Regulation 22 of the Regulations of 2004 and Regulation 20 of the Regulations of 2013 are provisions for the purpose of checking unwholesome practices at the instance of a Customs House Agent or a Customs Agent as the case may be. These are provisions which empower the authority to revoke the licence granted as a measure of punishment for a wrongdoing of the licensed person. Any licence granted unless coupled with a grant or interest, is revocable. These provisions provide for the procedure for the revocation of the licence granted. These provisions seek t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants. As have been stated in para 4.5, the said statement was relied upon by the Commissioner, has been retracted by Shri Rajesh Kumar Goswami before ACMM, stating that the statement was not voluntary and has been taken by the Customs Officer under duress and by giving false promise and false information. In the impugned order reliance has been has placed on the decision of Delhi High Court in case of Jasjeet Singh Marwah [2009 (239) ELT 407 (Del)], stating that statement made before the Customs officers under Section 108 is not a statement recorded under section 161 of Criminal Procedure Code, 1973, and can form sole basis for conviction. There can be no dispute about the same, however the statement has to examined for it being voluntary. It has been held by the Hon ble Apex Court in case of K I Pavunny [1997 (90) ELT 241 (SC)] that 25 . It would thus be seen that there is no prohibition under the Evidence Act to rely upon the retracted confession to prove the prosecution case or to make the same basis for conviction of the accused. The practice and prudence require that the Court could examine the evidence adduced by the prosecution to find out whether there a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining it and considering the issue for substantial time then can an Custom Broker be accused of failing to determine the correct classification on the basis of description given by the importer and in the import documents. 4.11 Admittedly certificate as required in terms of ITC (HS) Import Policy, Condition No 2, for the import of goods under CTH 9503 was not produced by the Importer/ Custom Broker, but what stopped/ prevented Custom Officers from insisting on the same before allowing the clearance. Can this failure of the Custom Officers be also the reason for accusing the Custom Broker of his failure to comply with the policy requirements? 4.12 Appellant as per the Article of Charges have been accused of failure in complying with Regulation 11(d) and 11(e) of the Custom Broker Regulations, 2013. The said Regulations are reproduced below: (d) advise his client to comply with the provisions of the Act and in case of noncompliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; (e) exercise due diligence to ascertain the correctness of any information which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scaped the analysis. 12 .Learned Senior Standing Counsel for the Customs has stressed that the infraction in this case is not a routine matter, but rather, illegal smuggling of narcotics by the G card users. However, given the factual finding that the CHA was not aware of the misuse of the G cards (and thus, also unaware of the contents being smuggled), no additional blame can be heaped upon the CHA on that count alone. Rather, the only proved infraction on record is of the issuance of G cards to nonemployees, as opposed to the active facilitation of any infraction, or any other violation of the CHA Regulations, whether gross or otherwise. Neither have any such allegations been raised as to the past conduct of the appellant, from the time the license was granted in January, 1996. Equally, it is important to note that the appellant has - as of today - been unable to work the license for 8 years, and thus been penalized in this manner. This is not to say that the trust operating between the Customs Authorities and the CHA is to be taken lightly, or that violations of the CHA Regulations should not be dealt with sternly. A penalty must be imposed. At the same time, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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