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TMI Blog2023 (9) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... .3 The appellant in C/40223/2021 viz. Mr. V.A. Mary Das is a partner of the licence holder. 1.4 The appellant in C/40224/2021 is the administrative officer at Cochin. 2. Brief facts are that on 10.06.2019 acting on specific intelligence that fake/ substandard "Air Inlet Automobile spare parts were being attempted to be exported by classifying the same under CTH 84212300 (as declared in shipping bill) and over invoicing the value as Rs. 3,46,95,519/- (declared value as FOB) by M/s Swiss Global, vikaspuri Delhi, (hereafter referred as Exporter), the officers attached to Air Cargo Complex (ACC) and Air Intelligence unit, Airport Trichy, visited the premises at Airport and noted that the said exporter had filed five shipping bills dated 09.06.2019 as free shipping bills claiming MEIS benefits through the Customs Broker (1st appellant herein). Examination was carried out in the presence of the representatives of the appellant and it revealed that the cargo proposed to be exported under the shipping bills were substandard materials. It appeared that the exporter had intentionally inflated the actual value in order to claim ineligible MEIS benefits and undue benefit by way of IGST refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on M/s Cochin Air Cargo Clearing House, Cochin (present Licence holder) under section 114(iii) & 114AA holding that they acted as agents of the exporter and therefore be deemed to be the exporter of the goods, (attempted export) under Section 147(3) of the Customs Act, 1962. A penalty of Rs. 3,00,00,000 (Three crore only) was imposed on Cochin Air Cargo Clearing House, Trichy (Branch unit) under Section 114(iii) & 114AA of the Act, holding that they acted as agents of the exporter and therefore are to be deemed as the exporter of goods, (attended export), under Section 147(3) of Customs Act 1962. 7. Aggrieved, by such order, imposing the penalties the appellants are now before the Tribunal. 8. The Ld. Counsel Sri Hari Radhakrishnan appeared and argued for the appellants. It is submitted that the appellant firm is the authorized Customs Broker having the parent licence issued from Trivandrum Customs Commissionerate. As the work load at Cochin was more, the appellant shifted their administrative office to Cochin. They were also operating in Customs stations in Cochin, Mumbai Trichy, Tuticorin & Chennai. For smooth functioning of each branch, branch managers are appointed. The act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h observation, the appellant filed appeal (Customs Appeal No. 05/2021) before the Hon'ble High Court of Kerala and vide Judgment dated 08.07.2021 the Hon'ble High Court modified the order passed by Tribunal by setting aside the above observation of the Tribunal. The Ld. Counsel urged that these facts would establish that the appellant had no knowledge about the over valuation of goods and had no role to play in the alleged attempt to export the goods. 8.3. Moreover the penalty is imposed under Section 114(iii) & 114 AA alleging that the appellant acted as agent of exporter of goods and therefore is deemed to be exporter in terms of Section 147(3) of the Act. The Ld. Counsel adverted to Section 147 and submitted that there is nothing in the provision which binds the CHA/CB who acts on behalf of the importer/exporter with the goods. The original authority has misconceived the provision. To support this argument the Ld. Counsel relied upon the decision in the case of Gajanan B. Sudrik vs. CC(EP)Mumbai 2014(304)ELT159(Tri-Mub). 8.4. It is submitted by the Ld, Counsel that other than the allegation that the appellant did not verify the antecedents of exporter there is no allegation ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exporter to export the cargo in such manner with an intent to make wrongful gain. The Ld. Authorized Representative prayed that the appeals may be dismissed. 10. Heard both sides. 11. The penalties have been imposed on the appellants under section 114(iii) and 114AA of the Customs Act, 1962. Section 147(3) also has been invoked to hold that appellants have acted as agent of exporter and is therefore deemed to be the exporter of the goods. 12. The allegation is overvaluation of the goods. The department has obtained details as to the price at which the exporter purchased the goods from the supplier viz., M/s. Moonlight Industries. This invoice and other KYC documents were submitted by the appellant before the officers. The appellant being a Customs Broker is duty bound to exercise diligence while performing the duties. In the present case, the appellant has obtained authorization from exporter and all KYC documents. The IEC, PAN details, GST registration etc. have been obtained. In such circumstances, it cannot be said that the appellant has not acted diligently. Moreover, a Show Cause Notice was issued to the appellant under section 17 of CBLR, 2018 alleging violation of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order is not sustainable in law and therefore we set aside the same. Since the appellant's CHA licence has already expired on 13/04/2020, we direct the appellant to apply afresh for their CHA licence and thereafter the learned Commissioner will decide afresh the renewal of the licence of the appellant in accordance with law. With these directions, we dispose of the present appeal." 13. In the present case, the main argument put forward by the AR is that the letter dated 14.06.2019 issued to the exporter was replied by the Trichy office of the appellant. This is too flimsy evidence to allege that appellant had connived in the overvaluation of the goods. Merely because a letter by exporter at Delhi is seen dispatched from Trichy postal circle, it cannot be presumed that the appellant has sent it or that appellant has connived with exporter. The allegation against a Customs Broker in involvement of import/export fraud is serious as it affects their livelihood. We do not find any material sufficient to establish guilt on the part of the appellants. In the case of Brijesh International vs. Commissioner of Customs (I&G), New Delhi 2017 (352) ELT 229 (Tri. Del.), the Tribunal held as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts on behalf of the importer / exporter under the provisions of Customs Act, Rules and Regulations. The Tribunal in the case of Gajanan B. Sutrik (supra) had occasion to consider similar issue and held as under:- "5. We have carefully considered the submissions made by both sides. We have also perused the statements recorded from the appellants by the investigating agency. From the statement, no conclusion can be reached as to their involvement in the fraudulent transactions. All the appellants in their statements have deposed that they undertook/participated in transaction for export of goods in good faith. The CHA has also submitted the identification document such as bank opening account establishing the identity of the exporter. In these circumstances, invoking the provisions of Section 147 and deeming the CHA and his employee as agent of the exporter is clearly unsustainable in law. This Tribunal decision in case of Aspinwall & Co. (supra) affirmed by Hon'ble Apex Court also makes the position very clear. Therefore, in the absence of any evidence, linking the CHA firm or its employee to the fraudulent transaction undertaken by the exporter, and consequent imposition of pen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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