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TMI Blog2024 (2) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Customs in the impugned order that the appellants has aided and abetted the exporter in availing ineligible export incentives, is difficult to be proved for fastening such liability on the appellants CB for holding them responsible for violation of Regulation 10(a) ibid. The ineligible claim for export incentives was found by the department only on the basis of specific investigation conducted by the NSPU/R I customs authorities, and hence the appellants CB cannot be found fault for the reason that they did not advise their client importer to comply with the provisions of the Act. Further, the voluntary statement given by Shri Sachin Sitaram Shinde, Proprietor of the appellants CB firm was on 03.03.2022 i.e., almost 3 years subsequent to before Customs investigation authorities clearly show that such mis-declaration was not known to the appellants CB. Thus, there is no possibility for the appellants CB to bring to the notice of the Deputy Commissioner of Customs (DC) or Assistant Commissioner of Customs (AC) about the mis-declaration of imported goods. Thus, we are of the considered view that the violation of Regulation 10(d) ibid, as concluded in the impugned order is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants herein is a Customs Broker (CB) holding a regular CB license issued by the Mumbai Customs under Regulation 7(2) of Customs Brokers Licensing Regulations (CBLR), 2018. On the basis of specific intelligence developed by Customs officers of NSPU/R I unit, that one exporter M/s G.R. Creation located at Shop No.1, Plot No. B/1,2,3, Sector-19/20, CBD Belapur, Maharashtra is attempting to avail ineligible export benefits through IGST refunds by using bogus GST registration, bogus GST invoices etc., the Shipping Bills, which were filed for such fraudulent exports attempted to be exported out of India, were kept on hold and further investigation was conducted. From the investigation, it appeared that the declared premises of the exporter is a fake address and untraceable at the place of business provided in the GSTIN. It also appeared that actually no IGST/tax had been paid to the Government exchequer in respect of inputs involved in procuring these export goods from the suppliers by the IEC holder/exporter. As in all the above cases, the shipping bills had been filed by the appellants CB, it appeared that they have aided and abetted with the exporter to avail ineligible export i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s done by the exporter, the appellants CB cannot be held liable. Thus he claimed that the appellants did not contravene these Regulations ibid. 3.2. In support of their stand, the learned Advocate had relied upon the following decisions of the Tribunal and the judgement of the Hon ble High Court of Delhi, in the respective cases mentioned below: (i) Parvath Shipping Agency Vs. Commissioner of Customs (Gen.), Mumbai - 2017 (357) E.L.T. 296 (Tri.-Mumbai) (ii) Bright Clearing Carriere Pvt. Limited Vs. Commissioner of Customs (Airport and General), Delhi - Final Order No.51083- 51084/2022 (iii) Exim Cargo Services Vs. Commissioner of Customs (General) - 2019 (368) E.L.T. 1024 (Del.) (iv) Thawerdas Wadhoomal Vs. Commissioner of Customs (General), Mumbai - 2008 (221) E.L.T. 252 (Tri.-Mumbai) 4. Learned Authorised Representative (AR) reiterated the findings made by the Principal Commissioner of Customs (General) in the impugned order and submitted that all the violations under sub-regulations (a), (d) and (n) of Regulation 10 ibid, has been examined in detail by the Principal Commissioner. The appellants CB got all the documents for export from Shri Bhaskar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of the export goods that was exported out of the country; and they also did not properly verify the KYC documents, as the IEC holder/exporter did not exist in the declared address as brought out in the investigation, which prove that they were not careful and not diligent in undertaking the KYC verification. Thus, the adjudicating authority had passed the impugned order confirming all the allegations of violation of above Regulations of CBLR, 2018. 7.1 Before we examine the allegations of violation of various Regulations under CBLR against the appellants, firstly we would like to examine the specific order passed by the learned Principal Commissioner of Customs (General) to see whether it is in compliance with the legal provisions. This is for the reason that when the CB license of the appellants CB was already revoked and the entire security deposit has also been already forfeited earlier vide Order-in-Original No.14/CAC/PCC(G)/PS/CBS (Adj.) dated 31.05.2021, for which an appeal has also been filed by the appellants and the same is pending disposal before this Tribunal. In this regard, we find that Regulations 17 ibid provide for the detailed procedure in conduct of regular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncipal Commissioner or Commissioner of Customs shall furnish to the Customs Broker a copy of the report of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, and shall require the Customs Broker 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 Principal Commissioner or 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 license of the Customs Broker 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 Principal Commissioner of Customs or Commissioner of Customs, as the case maybe. (8) Where in the proceedings under these regulations, the Principal Commissioner of Customs or Commissioner of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by him and those which have not been admitted by the CB, and appoint an Inquiry Officer to inquire into such grounds which are not admitted (iii) Inquiry officer to take into account all necessary evidence, oral or documentary for ascertaining the correct position (iv) opportunity for cross-examination of the persons examined in support of the evidence against the CB (v) Preparation of the inquiry report containing the findings of the inquiry officer (vi) Obtaining written representation from the CB, if he wish to submit any grounds against the inquiry report (vii) Principal Commissioner of Customs to consider the inquiry report, CB s representation and provide an opportunity of personal hearing before passing an adjudication order on the inquiry proceedings (viii) Specific penalties against F card holder, if case the Principal Commissioner comes to a conclusion for such imposition, duly following the procedure as above. The specific sub-regulation (7) of Regulation 17 ibid, provides the legal authority for the Principal Commissioner/Commissioner of Customs to pass such orders as he deems fit, either revoking the suspension of the license or revoking the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.06.2022 to the Inquiry officer had requested for permitting to cross examine the witnesses i.e., Shri Rajesh Dilip Gihar, proprietor of the export firm M/s G.R. Creation and Shri Mohammad Yusuf, Manager of M/s Manjunatha Cargo Pvt. Ltd. However, we find that no such opportunity appears to have been given to the appellants CB. Further, the appellants had also reiterated such a request made before the Principal Commissioner of Customs by submitting their written reply letter dated 12.12.2022. On this, the learned Principal Commissioner of Customs had only mentioned that he had provided sufficient opportunities for personal hearing on four occasions, and thus he is denying the request for personal hearing to the appellants CB on the 5th time, and had proceeded to pass the order in this case as ex-parte. From the above, it could be seen that the appellants, at the outset, had mainly challenged the impugned order on the ground that Regulation 17(4) ibid had been violated by the department inasmuch as cross-examination of two witnesses, whose statements were relied upon for adjudication of the dispute was denied. Thus, the appellant has contended that there is gross violation of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Regulation 20(4) is carefully worded. The entitlement of the Customs Broker to cross-examine, is confined only to persons examined in support of the grounds forming a basis of the proceedings . The Inquiry Officer viz., the Deputy Commissioner or Assistant Commissioner is entitled under Regulation 20(4) to decline to examine any person on the ground that his evidence is not relevant or material. But he shall record his reasons in writing for so doing. Keeping this in mind, we shall now see the enquiry report to find out whether there was violation of Regulation 20(4). 21. It is seen from paragraph 22 of the enquiry report dated 10-1- 2018 that three things formed the basis for the allegations made against the petitioner. They were - (i) Bills of Entry, (ii) the imported goods and (iii) the statements recorded by DRI under Section 108 of the Customs Act, 1962 from Shri Arjun Pilane and Shri Pramod Bhor. In fact, an objection was raised by the petitioner before the Enquiry Officer that the statements recorded from the witnesses are not admissible as they were extracted under coercion. This contention was rejected and the Enquiry Officer asserted in paragraph 22 of his report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cross-examination with at least one week notice; but since the inquiry report has to be submitted within a period of 90 days from the date of issue of Notice as per Regulation 20(5) of the CBLR, 2013, the same is not possible for consideration. Further it needs to be stated that neither of the witnesses has turned up for cross-examination on the scheduled date, despite even an oral communication about the same to Shri Pramod Bhor. Given that the request for cross-examination of persons (whose statements been recorded) was put forth to the Assistant Commissioner on 18-12-2017 only, efforts to enable the same within the time-constraints of inquiry proceedings as per the Regulation 20(5) of CBLR, 2013 were made. Moreover, the primary submission, dated 6-11-2017, was neither directed to the Inquiry Officer nor was the CB forthcoming to either attend the PH or submit supporting documents, until withdrawal of the notice by the Principal Commissioner of Customs. In the event of no such withdrawal and given the limitations of time, but keeping in view of the requirements of providing opportunity of being heard (which were not attended by the CB) and given the non-presentation of witn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibid. 8.2. From the facts of the case and the voluntary statements given by various persons during investigation of the case, it is seen that Shri Sachin Sitaram Shinde, F card holder and proprietor of the appellants CB had obtained the export documents for the impugned goods covered under the present exports from one Shri Yusuf Siddiqui, who had in turn known the exporter M/s G.R. Creation through Shri Bhaskar Jadhav, his known accomplice in the import export trade. 8.3 The impugned exports were exported through four Shipping Bills (S/B) all dated 28.11.2018 for which the NSPU/R I Customs investigation found that the FOB value has not been realized when they conducted address verification was done on 10.12.2018. Thereafter, voluntary statement from Shri Rajesh Dilip Gihar, proprietor of the export firm M/s G.R. Creation was recorded on 17.01.2019. However, subsequently Shri Sachin Sitaram Shinde, proprietor of the appellants CB was called for participating in the investigation only on 03.03.2022 for recording his statements under Section 108 of the Customs Act, 1962. Further, the allegation against the exporter is that they attempted to avail ineligible export incentives ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred. Therefore, in the light of the judgments cited above, the charge of violation of Regulation 12 is not established. As regards the violation of Regulation 13(a), the adjudicating authority himself has observed that the I have no doubt to say that the CHA might have obtained the authorisation but it is surely not from the importer. Therefore, the authorisation submitted is not a valid one . This finding is based on a presumption. Obtaining an authorisation from the importer does not mean that the same should be obtained directly; so long as the concerned import documents were signed by the importer, it amounts to authorisation by the importer and, therefore, it cannot be said that there has been a violation of Regulation 13(a). The question now is whether revocation of licence is warranted for such a violation. In our view, the punishment should be commensurate with the gravity of the offence. Revocation is an extreme step and a harsh punishment, which is not warranted for violation of Regulation 13(b). Accordingly, we are of the view that forfeiture of security tendered by the appellant CHA is sufficient punishment and revocation is not warranted. Accordingly, we set asid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count verification letter from ICICI Bank; GSTIN registration certificate. 10.3 In this regard, we find that CBIC had issued instructions in implementing the KYC norms for verification of identity, existence of the importer/exporter by Customs Broker in Circular No. 9/2010-Customs dated 08.04.2010, and verification of any two documents among specified documents is sufficient for fulfilling the obligation prescribed under Regulation 10(n) of CBLR, 2018. We find that in the present case, the appellants CB had obtained the KYC documents and submitted the same to the Customs Department. Thus, we do not find any legal basis for upholding of the alleged violation of Regulation 10(n) ibid by the appellants in the impugned order on the above issue. 10.4 We find that in the case of M/s Perfect Cargo Logistics Vs. Principal Commissioner of Customs (Airport General), New Delhi 2021 (376) E.L.T. 649 (Tri. - Del.), the Tribunal had decided the issue of KYC verification of the importer/exporter by the Customs broker and the requirements specified in the CBLR, 2018. 34. The basic requirement of Regulation 10(n) is that the Customs Broker should verify the identity of the client and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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