9911796707
TMI Blog2022 (3) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... be remanded to the original authority for reconsidering the issue of imposing penalty under Section 114 of the Act ibid. A Custom Broker is supposed to safeguard the interests of both exporters and the Customs. It is not possible to manage the huge volume of transactions in each port without some trust on the Customs Broker by the officers of Customs. Any act facilitating an attempt for export of prohibited goods would fall under Section 114 of the Act, ibid - appellants has relied upon the decision in the case of KAILASH BAHIRU JADHAV VERSUS COMMISSIONER OF CUSTOMS (EXPORT) [ 2019 (7) TMI 1061 - CESTAT MUMBAI ] to argue that the violation if any would fall only under CBLR, 2013 and not under Section 114 of Customs Act, 1962. The facts in the said case are that appellant therein had filed export documents and later revealed that there was overvaluation of goods which facilitated the exporter in claiming excess drawback. In para-6 of the said decision, the Tribunal held that for all contraventions in every case, the customs broker cannot be proceeded against under Section 114 of the Act, merely because he acted as an agent - The facts in the above case reveal that the allegati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .B Traders was found functioning in the given address and that no person by name Shri E.Stephen ever resided there. 4. As part of the investigation, statement was recorded from Smt.R.A. Vijayalakshmi, who is partner of M/s.R.S. Arunachalam, Customs Broker, Pammal, Chennai. In her voluntary statement given on 29.08.2017 under Section 108 of the Customs Act, 1962, inter alia, she stated that M/s.R.S. Arunachalam is a partnership firm and she is one of the partners. The other partner is her daughter Smt. Gomathi Sankari; Her husband, Late Shri R.S.Arunachalam was holding Customs Broker license. It was obtained by him in the year 1996. Her husband (R.S.Arunachalam) died in 2013 and thereafter R.A.Vijayalakshmi cleared exam and obtained the licence in 2015. She is holding F card with Broker Licence obtained on 11.02.2016, which is valid till 19.02.2025. It is stated by her that after obtaining the licence, she did not have clients on her own and Sri Indrajit of M/s.Bro Logistics contacted her and requested her to part with the digital key of M/s.R.S. Arunachalam for a consideration of ₹ 10,000/- per month; that since November 2015, M/s.Bro Logistics has been using digital key ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty has categorically held that there is no evidence to prove that the customs broker had actively abetted the exporter in the illegal export of red sanders. 7. The adjudicating authority after appreciating the evidence has found that Mr. E.Stephen, Proprietor of M/s.A.B. Traders was the mastermind in the smuggling operations. Ld. Counsel adverted to para-45 of the said order in which it is stated as under : 45. From the statements of Shri G.K.Ramesh, driver of the lorry which carried the export container, I find that the entire operation of smuggling of Red Sander was well planned and executed by Shri E.Stephen, Proprietor M/s.A.B.Traders, Shri Karthick and Shri K. Rajesh, Shri K.S.Jiavu Dharik, Proprietor, M/s.Global Transport. It was clear from the investigation findings and also the statement of Shri Shri G.K.Ramesh, that the perpetrator of this illegal operation sourced the container from M/s.Transvision Shipping P. Ltd., tampered the fasteners of handle of the container, and brought the same to CFS for stuffing of export cargo. After customs sealing of container and moving out of the CFS, enroute to Chennai diverted the lorry to an isolated location and substituted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia in terms of Sl.No.188 of Schedule 2 (Export Policy) of ITC (HS) Classification of Import and Export items issued under the provisions of Foreign Trade (Development Regulation) Act, 1992. Therefore, for the reason of attempted illegal export, the 277 Nos of Red sander logs totally weighing 8.420 MT valued at ₹ 3,36,80,000/- is liable for confiscation under Sec.113 (d), 113 (h) and 113 (k) of the Customs Act, 1962. I also find that DRI had also seized 21 LDPE bags of Door mats and 20 bags of Sri Chakra Supertech 50 Kg 53 Grade cement valued at ₹ 30,000/- and ₹ 7,000/- totally valued at ₹ 37,000/- used for concealing the red sanders are also liable for confiscation. Shri E Stephen, Proprietor of M/s.A B Traders, who is mastermind in the smuggling operation, is liable for penalty under Sec.114 of the Customs Act, 1962 for rendering the prohibited goods, viz., Red Sanders liable for confiscation . 8. Besides this, the adjudicating authority has found that the goods were substituted after tampering the empty container during transit. Shri K. Rajesh is the person who actually undertook the tampering of empty container and substituted the export cargo wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sanders was carried out by Shri P.Suresh of M/s.Bro Logistics ; that they obtained Customs Card for persons who are not their employees that she signed the blank annexures and handed over to M/s.Bro Logistics. In their reply to the show cause notice and during the personal hearing, the Customs broker had contended that the KYC documents of M/s.AB Traders are genuine and there is no reason to suspect as they had been issued by the Government agencies and that there is no mechanism to verify the availability of exporter and their premises; that the container was tampered with and substitution of export cargo with red sanders took place enroute to Port on which they have no control as a CHA. They have cited various case laws in support of their contention regarding non-leviability of penalty on the Customs Broker. I have considered all the arguments put forth on behalf of the Customs Broker and I find that as admitted by them, they had rent the user id and password to M/s.Bro Logistis for a monetary consideration and allowed Shri P Suresh to mis-use the same to facilitate the red sander export in this case. Customs Broker Licensing Regulations 2013 does not permit transfer Customs Bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be allowed. 12. Ld. A.R Shri R. Rajaraman appeared and argued for the department. He adverted to the discussions made in para-7 of the order passed by the Commissioner (Appeals). It is submitted by him, that the appellant, Smt. R.A. Vijayalakshmi has admitted that she has lent digital ID and password of their customs broker firm to M/s. Bro Logistics for filing shipping bill for monthly monetary consideration of ₹ 10,000/-. M/s.Bro Logistics were using the digital key of the appellants herein for handling customs clearance of various clients. It is also brought out from evidence that one Shri P. Suresh who was employee of Bro Logistics was doing customs clearance work without having a Customs card. The appellant Smt. R.A. Vijayalakshmi has signed blank annexures and handed over to Bro Logistics for filing before Customs. All these would indicate that the appellants have played a major role in the smuggling activity. By merely pleading ignorance, appellants cannot escape their liability under the Customs Act, 1962. He argued that the order passed by the adjudicating authority is factually and legally incorrect. It is established from the statement recorded under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals) to arrive at the conclusion that the matter has to be remanded to the original authority for reconsidering the issue of imposing penalty under Section 114 of the Act ibid. The Section 114 reads as under : SECTION 114. Penalty for attempt to export goods improperly, etc. - Any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 113, or abets the doing or omission of such an act, shall be liable, - (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty [not exceeding three times the value of the goods as declared by the exporter or the value as determined under this Act], whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten per cent. of the duty sought to be evaded or five thousand rupees, whichever is higher : Provided that where such duty as determined under sub-section (8) of section 28 and the interest payable thereon under section 28AA is paid within thirty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some trust on the Customs Broker by the officers of Customs. Any act facilitating an attempt for export of prohibited goods would fall under Section 114 of the Act, ibid. The Ld. Counsel for appellants has relied upon the decision in the case of Kailash Bahiru Jadhav Vs CC (Export) (supra) to argue that the violation if any would fall only under CBLR, 2013 and not under Section 114 of Customs Act, 1962. The facts in the said case are that appellant therein had filed export documents and later revealed that there was overvaluation of goods which facilitated the exporter in claiming excess drawback. In para-6 of the said decision, the Tribunal held that for all contraventions in every case, the customs broker cannot be proceeded against under Section 114 of the Act, merely because he acted as an agent. The said para reads as under : 6 . The Customs House Agents Licensing Regulations, 2004 which is a comprehensive self-contained scheme for licensing, operations, monitoring and regulation, is a standalone provision. Indeed it is a special provision in the Customs Act, 1962 by which, a whole range of activities in connection with which proceedings may be initiated for breach thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Hon ble High Court held that mere admission itself is sufficient to hold that the Customs Broker was reckless and negligent in using his license. The substantial question of law framed and considered by the Hon ble Court in C.M.As (MD) No. 917 of 2014 which is seen filed by the Customs broker is reproduced as under : 3. Whether the first respondent Tribunal was correct in upholding/enhance the penalty imposed on the appellant under Section 114 (i) of the Customs Act, 1962 for the alleged contravention of Customs House Agents Licensing Regulations,2004 when the said Regulations is a code by itself and therefore, for the violations and contraventions of the Regulations, the appellant can be proceeded only under the said Regulations and not under the Customs Act, 1962 . In para-16 of the said judgment, it is noted that the CHA in the said case was not a bonafide person and was just collecting rental income by leasing the license; there is positive finding and there is no illegality or perversity in the penalty imposed. In para-15 of the judgment, it was observed that in a scheme of conspiracy, the Customs House Agent cannot escape from liability pleading ignorance of the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
