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TMI Blog2020 (2) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... to the amount shown to be paid by utilizing the DEPB License. Since Commissioner has instead of reducing the overlapping demand made by the two show cause notice, removed the entire demand made against those ex-bond Bill of Entries by Show Cause Notice dated 11.03.2010, which were covered by earlier Notice dated 13.03.2009 we are not in position to uphold the impugned order in this respect. In our view Commissioner should have recorded finding in respect of each Bill of Entry covered by Show Cause Notice dated 11.03.2010 and then confirmed our dropped the demand made. If there was any overlapping demand in the two show cause notices, then the demands should have been adjusted to the extent of overlap. Thus the matter needs to be remanded back to the adjudicating authority to re-determine the issues in respect of the Bill of Entries covered by 2nd Show Cause Notice, which have been removed by him for the reason of their being covered by 1st Show Cause Notice. Imposition of penalties u/s 112(a) of CA - HELD THAT:- From the findings recorded by the Commissioner, it is evident that he has imposed the penalty on Appellant, CHA, for his failure to discharge the obligations cast on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 111(o) and 111(d) of Customs Act, 1962 but are not available for confiscation and hence the same are ordered to be redeemed against a fine of ₹ 20,00,000/- (Rupees Twenty Lacs) under Section 125 of the Customs Act, 1962. (iii) Penalty of ₹ 1,00,00,000/- (Rupees One Crore) is imposed on M/s. Akshay Exports under Section 114A of Customs Act 1962. (iv) Interest at appropriate rate, on the duty evaded at (i) above, is also ordered to be recovered from M/s. Akshay Exports under Section 28(AB) of the Customs Act, 1962. Shri Haque Malik Shaikh and Shri Arvind R. Shah being the Partner of M/s. Akshay Exports penalty cannot be imposed upon them individually and separately as penalty is imposed on their Partnership firm M/s. AE. (v) Penalty of ₹ 10,00,000/- (Rupees Ten Lacs) is imposed on Shri Sanjay Sharma authorised signatory of M/s. Akshay Exports under Section 112(a) of the Customs Act, 1962. (vi) Penalty of ₹ 10,00,000/- (Rupees Ten Lacs) is imposed on M/s. P. Cawasji Co. (CHA of M/s. Akshay Exports) under Section 112(a) of the Customs Act, 1962. 59.2 In relation to the consignments covered by the 2nd SCN and with refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1 Against the impugned order, three appeals have been filed by the revenue and one appeal by the M/s P Caswasji Co, Custom House Agent. 2.2 We have heard Ms Trupti Chavan, Assistant Commissioner, Authorized Representative for the revenue and Shri Arun H Mehta, Advocate for M/s P Caswasji Co. None appeared for the respondents in the revenue appeals despite notice. Hearing in all the appeals was fixed on 26.02.2019, 01.04.2019, 09.05.2019, 07.06.2019, 15.07.2019, 29.08.2019 and 30.09.2019. Records show that they had also not participated in the investigation and adjudication proceedings. Since the respondents in the revenue appeal were not appearing in the revenue appeals were taken up for consideration after hearing the Authorized Representative for the revenue. 3.1 The issue raised in the appeals filed by the revenue is in relation to quantification of demand. By the impugned order, Commissioner had adjudicated two show cause notices. The details of the show cause notice and the issues involved in each of them is as indicated below: a. Show Cause Notice F No V/PI/Bel/12-63/Gr-C/06 dated 13.03.2009 3.0 It appeared from the above that Noticees to the impugned SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and one DFRC licence, Liable for confiscation under the section III(J) of Customs Act, 1962. (ii) Themselves liable to pay the customs duty of ₹ 51,13,537 (as detailed in Annexure B pages 1 to 4 to the impugned SCN) in terms of proviso to Section 28 (1) of Customs Act 1962. (iii) Themselves liable to pay penalty under Section 114A and/or Section 112 of Customs Act 1962. (iv) Themselves liable to pay interest, at appropriate rate, on the duty evaded, as mentioned at (ii) above, under Section 28 AB of the Customs Act, 1962. 4.1 M/s. AE knowingly and wilfully produced the DEPB/DFRC licenses which were already used for debiting duty and no balance credit was available. They did not ask for/obtain TRA/RA as required for using of the licenses. This was admitted by Shri Rajesh Bhanushali in his statement dated 15.5.2007. They did not produce the same before the assessing officer with an intention to suppress the fact that there was no credit balance in the licenses with an intention to evade payment of duty. They did not appear before the investigating officer and thereby did not cooperate in the investigation and observance of the due process of law. They ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause to the Commissioner of Central Excise Customs having his office on the 1st Floor, CGO Complex, CBD, Belapur, Navi Mumbai as to why:- (i) The good totally valued at ₹ 125.72 Lakhs (as detailed in Annexure B to the impugned SCN) which were cleared using the 13 DEPB licenses and one DFRC license) should not be confiscated under the section 111(J) of Customs Act, 1962. (ii) Customs duty of ₹ 51, 13,537 (as detailed in Annexure B to the impugned SCN) should not be recovered under proviso to Section 28 (1) of Customs Act 1962. (iii) Penalty should not be imposed on them under Section 114A and / or Section 112 of Customs Act 1962. (iv) Interest, at appropriate rate, on the duty evaded at (ii) above, should not recovered from them under Section 28(AB) of the Customs Act, 1962. II. The impugned SCN further called upon (i) Shri. Haque Malik Shaikh, Arvind Partner of M/s. Akshay Exports. (ii) Shri Arvind R.Shah, Partner of M/s. Akshay Exports. (iii) Shri Sanjay Sharma authroised signatory of M/s. Akshay Exports. (iv) M/s. P. Cawasji Co (CHA of M/s. Akshay Exports). To show cause to the Commissioner of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AE were eligible for clearances under DFRC Scheme as per the description of the goods given in the DFRC licenses along with technical characteristics, quality and specifications but they cleared goods even though technical characteristics, quality and specifications were not matching. (3) They appeared to had also violate Rule 14(2) of the Foreign Trade (Regulation) Rules, 1993 which provides that no person shall employ any corrupt or fraudulent practice for the purpose of importing any goods. It was also found that in certain cases clearances were allowed against DFRC Licenses which had already expired. (4) AE also got goods cleared on payment of duty in the banks which were not authorised to collect Customs duty. In view of the above, it appeared that all the clearances made by AE (as detailed in Annexure A ) were either without TRA/RA and/ or cleared in violation of provisions/conditions of DFRC, DEPB and DEEC licenses or cleared on payment of duty in banks not authorised to collect Customs duty. Thus from the acts of omissions and commissions buy AE , it appears that (i). Goods totally valued at ₹ 7,31,15,745/- (Rupees seven crores thirty one lakhs fift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20.0 Shri. Sanjay Sharma, being the Authorized Signatory of the Company was involved in all the clearances made by AE . He was also instrumental in clearance of goods without TR/RA, without following the provisions of DFRC, DEPB and DEEC Schemes and in depositing Customs duty in banks not authorized to collect the same. Accordingly, he appears to have abetted in the offence committed by AE which rendered all such goods liable for confiscation under Section 111 of the Customs Act, 1962. Shri Sanjay Sharma appears to have rendered himself liable to pay penalty under Section 112 (a) of Customs Act, 1962. 21.0 M/S. P. Cawasji Co. Ltd, the Customs House Agent of AE and their then employee Shri Rajesh Bhanushali, appeared to be instrumental in the offences committed by AE . Being a C.H.A. they were expected to be aware of all the provisions of law and procedures. In spite of that, they did not procure the TRA/RA from the port of Registration. Further, they were instrumental in clearances of goods against the provisions of DFRC/DEEC Schemes and in depositing Customs duty in banks not authorised to collect the same. Accordingly, they appear to have abetted in the offence co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above discussion and findings the value of goods that are found to be liable to confiscation under Section 111(o) r/w 111(d) of the Customs Act, 1962 and the duty of Customs liable to be confirmed and recovered in the impugned two SCNs, based on the work sheet as brought out in para 50.0 above, is as under:- SCN Value Duty 1st dt 13.03.2009 125.72 lacs 51,13,537/- 2nd dt 11.03.2010 5,88,17,964/- 8,28,60,998/- Accordingly, the entire duty liability raised vide the 1st SCN is liable to be confirmed with the confiscation as proposed therein. The duty amount and value in the 2nd SCN is arrived at after removing all the Ex-Bond B/Es already covered in the 1st SCN. 3.3 From the facts as brought out above it is quite evident that the Show Cause Notice dated 13.03.2009 demanded only part of duty that has been debited by the respondents, from the DEPB License in respect of the Ex-Bond Bill of Entry. The demand made in the Show Cause Notice dated 11.03.2010 was in respect of the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oticee No.6 to the second SCN conducted the required activities in respect to the imports as employee of the said CHA, towards the imports M/s. AE. M/s. P. Cawasji Co. Through their proprietors M/s. Khambatta have in their defence (as brought out at para 7.1 34.1) stated following. That Mr. Rajesh Bhanushali, their employee had introduced M/s. AE to them. They have denied any knowledge of any alleged mis-declaration and they had not abetted in commission of any offence which have rendered the goods liable to confiscation. That they were never concerned with the goods in any manner to have reason to believe that the goods were liable to confiscation. They had accordingly submitted that there is no evidence of their having aided and abetted and thus they were not liable to penalty. Shri R. Bhanushali (Noticee No.6 to second SCN), never submitted a reply to the second SCN nor did he appear in person. 52.1 The said noticee no.5 were bound by obligation under Regulation 13 of Custom House Agent Licensing Regulation 2004 (CHALR 04). Thus all acts and activities of the employee of the CHA are direct responsibility of the CHA. As submitted by them, the importer M/s. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of low GSM Textile fabric. This investigation was conducted in relation to imports by M/s. Sunline Impex and M/s. Suraj Traders (SCN issued vide F.No. DRI/MZU/G/INV- 10/06-07 dt 31.03.2009). This fact cannot be denied by Mr. Rajesh Bhanushali. It is not by sheer chance that he was common factor in both cases of similar type. The intention and mens-rea on part of Mr. Rajesh Bhanushali in respect to the consignments in impugned two SCNs is evident, as he did not disclose this fact at any given time during his investigation in impugned cases, investigated at the same time. Thus inspection on part of Mr. Rajesh Bhanushali existed by collaborating with the partners of M/s. AE in the present issue on similar grounds is clearly established. M/s. P. Cawasji cannot be said to be oblivious of the acts and actions of Mr. Bhanushali and they have deliberately not brought on record their knowledge about the same. This fact therefore also substantiates the presumption and assertion at para 46.2 above. 4.3 From the findings recorded by the Commissioner, it is evident that he has imposed the penalty on Appellant, CHA, for his failure to discharge the obligations cast on him in terms of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... handle the goods for export as CHA and they work merely on the basis of the documents provided to them by the concerned party. They have also argued that in the present case the goods referred for examination were examined by the customs officers and cleared for export and that they had no expertise on in valuation of the goods nor they could physically count them prior to export and therefore they did not wilfully cooperated with the exporters for the fraudulent exports. All these are alibis to cover up their failures once the offence being perpetuated by them was detected and their game plan exposed, they have resorted to such explanations in self defence. 67. The investigations into the matter have conclusively established and proved beyond any measure of doubt that the noticee export firms were found to be non-existing at the addresses declared in the shipping bills or in the IEC. Further Regulation 13 of the CHALR, [2004] stipulates that a CHA shall verify antecedent, correctness of Importer Exporter Code (IEC) Number, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importer or exporter in fact is reflected in the list of the authorized exporters or importers and possesses the Importer Exporter Code (IEC) Number. As to whether in reality, such exporters in the given case exist or have shifted or are irregular in their dealings in any manner (in relation to the particular transaction of export), can hardly be the subject matter of due diligence expected of such agent unless there are any factors which ought to have alerted it to make further inquiry. There is nothing in the Regulations nor in the Customs Act which can cast such a higher responsibility as are sought to be urged by the Revenue. In other words, in the absence of any indication that the CHA concerned was complicit in the facts of a particular case, it cannot ordinarily be held liable. 4.5 In our view the decision of the Hon ble Delhi High Court squarely covers the issue under consideration and following the decision the penalty imposed upon Custom House Agent needs to be set aside. The decision of tribunal in case of Al Cargo Global Logistics Ltd [2011 (269) ELT 389 (T-Ahd)] relied upon by the Commissioner is distinguishable on facts. 4.6 In view of the discussions as a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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