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TMI Blog2023 (2) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued within the time limit of 90 days as prescribed under Regulation 20(1) and hence there is no delay and the show cause notice is not barred by limitation. Whether the present case is hit by the principle of double jeopardy on issuance of second suspension order? - HELD THAT:- The plea of issuing two SCNs or that the license cannot be suspended or revoked twice on same issues does not survive as the action under Regulation 19 has to be taken immediately to restrain the CB from functioning. On receipt of the information on 27.09.2017, the order of suspension was passed immediately on 05.10.2017. Following the provisions of Regulation 19(2), CBLR, 2013 after granting an opportunity of hearing to the CB, further order with regard to revocation of suspension was passed, however specific liberty was granted to initiate action under CBLR, 2013 if new facts are established. On receipt of the offence report on 09.02.2018, immediate action was required to restrain the CB from indulging in any further activity which could be detrimental to the interest of the Revenue and therefore an order of suspension of license was passed on 15.02.2018 which was then confirmed on 12.03.2018 und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem before the Customs Authorities. Neither the partners nor the G-Card holder of CB met the exporters. It has to be concluded that CB had put himself into the shoes of fraudsters who were using forged documents of fictitious persons who were actually not involved with the said fraudulent exports to claim duty drawbacks - Thus, the CB has violated the obligations cast on him under the Regulations as discussed above and hence the revocation of the license and the forfeiture of security deposit is justified. Appeal dismissed. - Customs Appeal No. 52221 of 2019 - FINAL ORDER NO. 50133/2023 - Dated:- 16-2-2023 - SH. P. V. SUBBA RAO, MEMBER (TECHNICAL) AND MS. BINU TAMTA, MEMBER (JUDICIAL) Sh. Akhil Krishan Maggu and Sh. Vikas Sareen, Advocates for the appellant Sh. Rakesh Kumar, Authorised Representative for the respondent ORDER The present appeal has been filed by M/s Swastik Cargo Agency against the Order-in-original No. 57/MK/RevocationPolicy2018 dated 18.10.2018 whereby the Commissioner of Customs (Airport General), New Customs House, New Delhi revoked the Customs Broker License of the appellant for violating the various provisions of Customs Broker Lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 66/KB/Revocation of suspension/Policy/2017 dated 27.10.2017, specifically stating that if new facts emerged or established at a later stage, action in terms of provisions of CBLR, 2013 may be taken against the said CB. 5. The summons dated 28.09.2017, 22.11.2017, 12.12.2017 and 18.12.2017 were also issued to Ms. Nidhi Rastogi, F-Card holder, however, she failed to appear in terms of the summons. Summons were also issued to Smt. Madhulika Rastogi on 22.11.2017, 12.12.2017 and 18.12.2017, however, she appeared on 26.12.2017 and gave her statement, inter-alia stating that:- i. Ms. Nidhi Rastogi, F-Card holder of M/s Swastik Cargo Agency, who was her daughter, was living in Atlanta, United States of America for the past 10 years; ii. She comes to India for about 15 days every year; iii. She last visited India at the time of filing of application for renewal; iv. Authorisation letter issued by Ms. Nidhi Rastogi, as produced by Sh. Jai Kumar Sharma, G-Card holder of M/s Swastik Cargo Agency was given on pre-signed letter head of the firm. v. Ms. Nidhi Rastogi, F-Card holder her daughter, was OCT (Overseas Citizen of India) card holder; vi. She concurred with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and all other work as required by exporters and importers related to Customs Department; that before processing any paper such as filing of shipping bill, bill of entry etc. of the exporters/ importers in the Customs department they obtained the KYC documents of the exporter/ importer; that these documents include the copies of PAN card, IEC Code, AD Code duly issued by the bank, GST registration copy, etc.; that he was aware that they have filed shipping bills in respect of M/s Shagun Overseas, M/s S. K. Exports, M/s Fine Art Traders, all of Moradabad and M/s R. K. International, Hathras; that business of all the four exporters was received by them from forwarding agency M/s Sahibji Freight Movers, Building No. 201, IInd floor, Nagar Complex, Hasanpur Village, Patparganj, New Delhi whose proprietor was Sh. Abhishek Saxena; that the KYC documents were also provided by Sh. Abhishek Saxena to them; that the shipping bills of all the four exporters were filed on the basis of the copy of invoice, packing list and other documents provided by Sh. Abhishek Saexna; that the goods were never inspected/ examined by the CHA when the goods were sent by the exporter nor the goods were inspec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el and they simply filed the paper relying upon the forwarder M/s Sahib Ji Freight Movers. 8. The officers of Noida Customs Commissionerate visited the declared address of the three exporters, namely M/s Shagun Overseas, M/s Fine Art Traders, M/s S. K. Exports. However, the abovesaid exporters were found non-existent at their declared address. 9. It was also revealed that the office building at B-2/173, Safdarjung Enclave, New Delhi was being used only as a P.O. Box address as the Caretaker Sh. Ajai Kumar Saket informed that he used to receive the dak meant for Smt. Madhulika Rastogi and Ms. Nidhi Rastogi and the same was collected through someone on behalf of Smt. Madhulika Rastogi. That neither Smt. Madhulika Rastogi nor Ms. Nidhi Rastogi were residing at the said address nor any office of CB was operating from the said building. 10. The matter was investigated and the investigation report incorporating additional facts was sent by the Commissioner of Customs, Noida vide their letter dt. 25.01.2018 and the same was received in the office of the Commissioner of Customs (Airport General), New Customs House, New Delhi on 09.02.2018. As per the said report, three cases wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircular. On merits, he pleaded that there is no evidence to show that he was aware about the ill intention of the exporters and there is no mens rea on their part to be benefited. Rather he acted bonafide as all the KYC documents were obtained from the exporters, which was duly submitted. He also denied that the exporters were fictitious firms as the same was verified from the ROC and DGFT. There is no requirement on physical verification of the premises or the documents made available to him. Accordingly to him, there is no evidence that he ill advised his clients. The learned Counsel for the appellant relied on various judgements to say that no knowledge of irregularity in export consignments can be attributed on him as he had no mens-rea. Also that he is not required to physically verify the premises or the documents whether they are genuine or not. The cases referred to (i) Kunal Travels (Cargo) vs. Commissioner of Customs (I G), IGI Airport, New Delhi -2017 (354) ELT 0447 (Del.), (ii) Krishna Shipping Agency vs. Commissioner of Customs (Airport Administration) Kolkata 2017 (348) ELT 0502 (Tri. Cal.), (iii) APS Freight Travels Pvt. Ltd., vs. Commissioner of Customs (General ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs vide OIO dated 18.10.2018 agreed with the Enquiry Officer that as the SCN was issued on the basis of the statements of the partner of CB and his employee and the same have not been retracted, there is no justification in providing the opportunity of cross examination. The WP(C) No. 6571 of 2018 filed by CB before the High Court of Delhi challenging the show cause notice was disposed of vide order dated 05.12.2018 granting liberty to avail the appellate remedy and seek appropriate order for cross-examination of the witness. In terms of the said order, the appellant made an application before this Tribunal to remand the matter on the issue of cross examination, however subsequently, the said application was withdrawn by the appellant. So nothing survives on the plea of cross examination. 17. In view of the controversy in the present case, the following questions of law arises: (i). Whether show cause notice is beyond the period of limitation under CBLR, 2013? (ii). Whether the present case is hit by the principle of double jeopardy on issuance of second suspension order? (iii) Whether the Custom Broker has violated the provisions of Regulation 11 (a), (d), (m) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position of penalty or any action taken under these regulations shall be without prejudice to the action that may be taken against the Customs Broker or his employee under the provisions of the Customs Act, 1962 (52 of 1962) or any other law for the time being in force. 19. Suspension of licence . (1) Notwithstanding anything contained in regulation 18, the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs Broker where an enquiry against such agent is pending or contemplated. (2) Where a licence is suspended under sub-regulation (1), the Commissioner of Customs shall, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs Broker whose licence is suspended and may pass such order as he deems fit either revoking the suspension or continuing it, as the case may be, within fifteen days from the date of hearing granted to the Customs Broker : Provided that in case the Commissioner of Customs passes an order for continuing the suspension, the further procedure thereafter shall be as provided in regulation 20. 20. Procedure for revoking licence or imposing penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ker to submit, within the specified period not being less than thirty days, any representation that he may wish to make against the said report. (7) The Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the Customs Broker, pass such orders as he deems fit either revoking the suspension of the license or revoking the licence of the Customs Broker or imposing penalty not exceeding the amount mentioned in regulation 22 within ninety days from the date of submission of the report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, under sub-regulation (5) : Provided that no order for revoking the license shall be passed unless an opportunity is given to the Customs Broker to be heard in person by the Commissioner of Customs. 20. That same provisions as provided in Regulation, 14, 16 and 17 of CBLR, 2018 have been considered in a recent decision in the case of ICS Cargo Vs Commissioner of Customs (General), New Delhi, Customs Appeal No. 52789/2019 vide Final Order No. 50016/2023 dated 06.01.2023 where this Tribunal has taken the view that the Regulations having statutory force are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oida vide letter dated 27.09.2017 intimated the Assistant Commissioner, Policy, New Delhi, that a case of fraudulent export against M/s Shagun Overseas, M/s Fine Arts Traders, and M/s S. K. Exports is being investigated under the provisions of the Customs Act, 1962. The shipping bills in all these cases were filed through the appellant and on search at his office address, no office of the customs broker was found there. The partner of the CB Smt. Madhulika Rastogi was contacted, but she refused to divulge her residence address and sent the search party to her CA‟s office. In view of serious irregularities detected in the export consignment of all the three exporters, request was made for taking appropriate action under CBLR, 2013. 22. The Commissioner of Customs, (General) considered the case under Regulation 19 (1) of CBLR, 2013. In the OIO No. 63 dated 05.10.2017 he observed that further enquiries against the CB are pending, however, as immediate action is warranted to prevent misuse of custom broker license which was valid up to 27.01.2027, suspended the said license. The said order was passed without prejudice to any other action that may be taken against the CB or any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner decides to continue with the suspension order, then in that case he would have to thereafter follow the procedure as contemplated under regulation 17. 11. The second submission advanced by the learned Counsel for the Appellant cannot also be accepted. The power exercised by the Commissioner under regulation 16 (2) is summary in nature. An order under regulation 16(2) to either revoke the suspension or continue with it is passed after giving an opportunity of hearing to the Customs Broker. On the other hand, the procedure under regulation 17 contemplates a full fledged inquiry. A notice has to be issued to a Customs Brokers stating the grounds on which it is proposed to revoke the license or impose penalty and a Customs Broker has to submit a reply to the Deputy Commissioner of Customs nominated by the Commissioner to submit statement of defense and also to specify whether the Customs Broker desires to be heard in person. After the submission of the written statement, the Deputy Commissioner has to inquire into the grounds which are not admitted by the Customs Broker and for this purpose, the Deputy Commissioner has to consider such documentary evidence and take such o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per Regulation 14 followed by Regulation 17. Hence, action under Regulations 14 and 17 is independent of order passed under Regulation 16 and vice versa. Both can be invoked independently. Thus, it is clear that action under regulation 16 can be taken during the pendency of proceedings initiated under regulation 14 to revoke the license of the Customs Broker. It becomes abundantly clear that any order whether of continuation of suspension of CB‟s Lincese or of revocation thereof is not a bar for the inquiry as has already been initiated under Regulation 14 following the procedure prescribed under Regulation 17 of CBLR, 2018. Hence, the contention of appellant is not sustainable and we hold that irrespective of the order of revocation of suspension of appellants license the proceedings for revocation under Regulation 17 of CBLR, 2018 thereof have rightly been continued against him. With these observations the Issue No. 2 is decided in negative holding that the findings recorded under Regulation 16(2) of CBLR, 2018 cannot in any manner have any bearing on the findings recorded under Regulation 17. We draw our support from the decision of the Principal Bench of this Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty was granted to proceed once additional facts emerge. So, it is not a case of double jeopardy. The final order revoking the license was passed only after following due process of law in terms of Regulation 20 of CBLR, 2013. 27. That Regulation 2(c) defines Customs Broker as a person licensed under these regulations to act as agent for the transaction of any business relating to the entry or departure of conveyances or the import or export of goods at any Customs Station. Regulation 3 places an embargo stating that no person shall carry on business as a Customs Broker relating to the entry or departure of a conveyance or the import or export of goods at any Customs Station unless such person holds a license granted under these regulations. Regulation 11 provides for various obligations of the CB. 28. Before adverting to the specific violations of CBLR, 2013, it is necessary to appreciate the role or the position of the CHA / CB. The Apex Court in the case of Commissioner of customs Vs K. M. Ganatra Co. reported in 2016 (332) ELT 15 (SC), placed reliance on the decision in Noble Agency Vs. Commissioner of Customs, Mumbai -2002 (142) ELT 84 (Tri. Mum.) wherein a Division B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedures such as scrutinising the various documents to be presented in the course of transaction of business for entry and exit of conveyance or the import or export of the goods. In such circumstances, great confidence is reposed in a Custom House Agent. Any misuse of such position by the Custom House Agent will have far reaching consequences in the transaction of business by the Custom House officials. 30. The recent decision of this Tribunal in the case of M/s Falcon India (Customs Broker) Vs. Commissioner of Customs, (Airport and General) New Delhi in Customs Appeal No. 50934 of 2021 dated 21.03.2022, it has been observed: 33. The above decisions lay down that the Customs Broker (or Custom House Agent) is a very important person in the transactions in the Custom House and it is appointed as an accredited broker as per the Regulations and is expected to discharge all its responsibilities under them. Violations even without intent are sufficient to take action against the appellant. While it is true, as has been decided in a number of cases, that the Customs Broker is not expected to do the impossible and is not expected to physically verify the premises of the importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms Broker shall- (i) Regulation 11 (a) reads as : (a) obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as a Customs Broker and produce such authorisation whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; We have gone through the inquiry report as also the findings of the Adjudicating Authority and it is crystal clear that the F-Card holder of the CB, namely Ms. Nidhi Rastogi lives in Atlanta (USA) for the past ten years and comes to India only for fifteen days every year. The authorization letter issued by her, as produced by Sh. Jai Kumar Sharma, G-Card holder of the appellant was given on pre-signed letter head of the firm. The Digital Signature Device issued to Ms. Nidhi Rastogi by the Customs remained with Sh. Jai Kumar Sharma who carried out all the custom related work of the firm. That all the three exporters, M/s Shagun Overseas, M/s Fine Art Traders and M/s S. K. Exports have been found to be bogus and non-existent firms, fraudulently created so as to claim undue drawback benefits. As a result, neither the Partners of the CB n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Customs Broker had not discharged his duties and responsibilities in accordance with the regulations as they were not at all active in export of the said consignments and the active role was played by Sh. Abhishek Saxena, Prop. of M/s Sahib Ji Freight Movers. As is seen from the order of the Adjudicating Authority the F-Card holder had not responded to the various summons sent to her nor did she join the investigation. Thus the CB had not discharged his duties responsibilities and thereby violated the provisions of Regulation 11(m) of CBLR, 2013. (iv) Regulation 11(n) reads as: (n) 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; and It is an admitted position that neither the Partners nor their employees ever met any of the exporters, who were found to be non-existent at their given addresses. None of them verified the correctness of KYC documents, the entire export assignment were controlled by the freight forwarders M/s Sahib Ji Freight Movers through its Proprietor as they had actually p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 17(9) of CBLR, 2013. 33. This being a case of facilitating the fraudulent exports carried out and it being duly proved during the inquiry proceedings that the exporters were non-existent, CB has failed to verify the correctness of the documents, violated the obligation as a custom broker under CBLR, 2013. Therefore, the Adjudicating Authority had rightly directed for forfeiture of the security deposit of Rs. 5 lakhs submitted by CB. 34. We agree with the submission of the learned AR that forgery nullifies everything. The facts of the present case clearly show the fraudulent manner in which the exports have been made where 90% of the goods were short and nearly 70 lakhs of rupees were taken as duty drawback thereby defrauding the revenue. The entire transaction was fraudulently conducted. The exporters were found to be fictitious, non-existent who were actually farmers and had no knowledge about their being exporters and therefore the CB could not bring them before the Customs Authorities. Neither the partners nor the G-Card holder of CB met the exporters. It has to be concluded that CB had put himself into the shoes of fraudsters who were using forged documents of fictit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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