9911796707
TMI Blog2025 (1) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... as noticed by the department that the appellant, acting as an importer, had imported a consignment, vide Bill of Entry No.5008577 dt.11.03.2023, where the goods were declared as 'Dried Dates Grade-3', whereas on examination, it was revealed that 'Areca Nut' was also concealed among the bags of 'dried dates'. Therefore, in view of the said mis-declaration and follow up investigation, department felt that there was an attempt to smuggle which attracted various penal provisions including confiscation of the contravening goods for which a SCN was issued to the appellant, acting as an importer for the said consignment. However, since in this case while the importer was the appellant, acting as importer, the Custom Broker for the said import was also the appellant, acting as customs broker and therefore, separate proceeding was contemplated under CBLR, 2018 against them. After due process, a SCN dt.13.03.2024 was issued to the appellant proposing, inter alia, revocation of license in terms of regulation 14. The SCN was adjudicated by the Commissioner vide Order dt.16.08.2024. The appellants are in appeal against the said impugned order. 3. Learned Advocate for the appellant has, inter a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her formalities on the same day. The export containers were loaded on 20.02.2023 and all the reports and the Bill of Lading copy was forwarded to the Phytosanitary department on 21.02.2023 and they issued the certificate on 22.02.2023. The supplier vide letter dt.21.08.2023, therefore, clarified that even though the samples were tested prior to shipment of containers, due to continuous holidays the report was issued subsequently. 4. He also clarified that the content of the letter dt.21.08.2023 has never been disputed by the department as mentioned at Para 31 of SCN dt.06.03.2023 and the department has also accepted the submission of the supplier as well as the submission of the importer that no payment was made in respect of Bill of Entry No.5008577 dt.11.03.2023. He further submits that department was at liberty to crosscheck and conduct overseas investigation if they had any doubt about the genuineness of the averment made by the overseas supplier or about the authenticity of the documents itself. He has further submitted that the alleged discrepancy in the dates of invoice and purchase order as well as phytosanitary certificate, which were also duly explained, has otherwise no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04.2010. Therefore, on this count itself, the order is required to be set aside. He has relied on various judgments as under in support of this contention:- a) Leo Cargo Service Vs CC (Airport & Gen.), New Delhi [2022 (382) ELT 30 (Del)] b) Pragati Overseas Agency Vs CC (Airport & Admn), Kolkata [2018 (363) ELT 169 (Tri-Kolkata)] c) HSN Shipping Vs CC, Chennai [2020 (372) ELT 689 (Madras)] d) CC (Gen.) Vs Atharva Global Logistics [2016 (338) ELT 682 (Del)] e) Rishad Shipping & Clearing Agency Ltd Vs CCE & CGS, Indore [2022 (1) ELT 315 - Tribunal Delhi] f) KTR Logistics Pvt Ltd Vs CC, Chennai [2020 (371) ELT 685 (Mad)] 8. He further clarifies that even going by the department, the mandatory nature of time line stipulated under CBLR, 2018 has already been accepted by the Principal Commissioner of Customs during the proceedings and therefore, there should not be any doubt regarding its mandatory compliance and since in this case this time line has not been adhered to, the impugned order is required to be set aside. He further states that even though in his statement Mr. K.V. Sampath Kumar, Managing Director of the appellant company, in his capacity as customs broker, has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Thameem Ansari Vs State of Madhya Pradesh [2020 (3) TMI 900 - Madhya Pradesh HC], wherein, it was held that when there are two distinct offences made up of different ingredients, embargo under Article 20(2) or Section 26 of General Clauses Act, 1897 has no application, though the offences may have overlapping features. 12. Heard both sides and perused the records. 13. In the present appeal, the action under CBLR has been proposed against the appellant in their capacity as custom broker, who was engaged in clearing Bills of Entry for M/s Rich Mark Shipping & Logistics Pvt Ltd, in the capacity as importer. It is an admitted fact that on examination of the container there was gross mis-declaration vis-à-vis in the Bills of Entry filed by the appellant on behalf of the importer. It is also an admitted position that based on investigations conducted by the department, one SCN was issued to the appellant in their capacity as importer for the alleged violations under the Customs Act proposing, inter alia, confiscation of goods and imposition of penalty, etc. Additionally, a separate action was initiated for suspension and subsequent revocation of license granted to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of illegal import of 'Areca Nuts' in the guise of 'Dried Dates' by the appellant for further necessary action as deemed fit and the Principal Commissioner of Customs on being satisfied immediately suspended the customs broker license vide Order dt.24.03.2023. Subsequently, in accordance with the procedure in terms of regulation 16(2) of CBLR an opportunity was extended to the appellant for personal hearing. However, the appellant neither appeared nor sent any submissions and instead sought certain postponement. However, keeping in view the prescribed time schedule, which is required to be followed with respect to suspension of license as per regulation 16(2), an exparte continuation of suspension order was issued on 11.04.2023. Being aggrieved, the appellant went to the Hon'ble High Court of Andhra Pradesh and in terms of the order, another date of personal hearing was fixed on 10.08.2023 and after hearing the case, continuation of suspension order was issued on 06.10.2023. 16. Thereafter, following detailed procedure and also considering the Enquiry report of the Enquiry officer, the Adjudicating Authority has come to the conclusion that there has not been any default in the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of license or imposition of penalty under Section 14 of CBLR wherein the Principal Commissioner or Commissioner of Customs may, subject to the provisions of regulation 17, revoke the license of a customs broker and order for forfeiture of part or whole of security, on any of the following grounds:- a) failure to comply with any of the conditions of the bond executed by him under regulation 8; b) failure to comply with any of the provisions of these regulations, within his jurisdiction or anywhere else; c) commits any misconduct, whether within his jurisdiction or anywhere else which in the opinion of the Principal Commissioner or Commissioner of Customs renders him unfit to transact any business in the Customs Station; d) adjudicated as an insolvent; e) of unsound mind; and f) convicted by a competent court for an offence involving moral turpitude or otherwise. 20. Similarly, a license can be suspended in terms of provisions under Section 16 of the regulations. Under Section 16(1) of CBLR, there could be an immediate action for suspension on, prima facie, belief of violation, whereas, in terms of Section 16(2), the same suspension order can either be continued or it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that there has not been any delay in issuing the notice dt.13.03.2024. 24. In this regard, we have perused the suspension order dt.11.04.2023 vide which Commissioner, in exercise of his power under Section 16(2), has continued the suspension averring that he was fully satisfied that customs broker has, prima facie, not fulfilled their obligation as laid down in regulations 10(d) & 10(e) of CBLR. However, as cited supra, in Para 7 of the impugned order, it is clearly indicated that suspension order dt.24.03.2023 was issued after being fully satisfied that the customs broker has, prima facie, not fulfilled their obligation as laid down in regulations 10(d) & 10(e). Therefore, the question is while the Adjudicating Authority feels that there is nothing in the offence report to consider it as "offence report" for the purpose of regulation 17(1), it is not forthcoming as to how within two days of the said note, the suspension order was issued alleging violation of only 10(d) & 10(e) when there are 17 obligations, which the customs broker is obliged to follow. In fact, even for the continuation of the suspension under regulation 16(2), the same breach of regulations 10(d) & 10(e) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department that it would not constitute an "offence report" is not correct. Incidentally, this "investigation report" is not a relied upon document to the SCN for calculating time limit. It is also felt that there is no provision for "provisional suspension" in CBLR, 2018 and only a suspension issued under regulation 16(1) can be further extended under regulation 16(2) of CBLR. It is also to be noted that in terms of provisio to regulation 16(2), further procedure is to be regulated by regulation 17, which, ultimately, would culminate in either suspension order getting revoked or license getting revoked. 26. We have also perused the case laws relied upon by the appellant. In the case of HSN Shipping Vs CC, Chennai (supra), Hon'ble High Court relied upon the decision of Division Bench of High Court in the case of Santon Shipping Services Vs CC, found that the SCN issued beyond 90 days was not maintainable and therefore quashed. In the case of CC (Gen.) Vs Atharva Global Logistics (supra), Hon'ble High Court held that SCN has to be issued within 90 days. The Coordinate Bench at Delhi in the case of Rishad Shipping & Clearing Agency Ltd Vs CCE & CGS, Indore (supra), also held time li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of any one of the High Courts, but has the judicial freedom, to consider the conflicting views, reflected by different High Courts, and adopt the one considered more appropriate to the facts of a given case before the Tribunal. The Tribunal also indicated that this should be so, irrespective of the fact whether one particular assessee was within the jurisdiction of a specified High Court or the original adjudicating authority was located there. The judgment of the Apex Court in the case of M/s. East India Commercial Co. Ltd. v. Collector of Customs, Calcutta reported in 1983 (13) E.L.T. 1342 (S.C.) was brought to the notice of the Larger Bench, but, was not adverted to sufficiently in the course of discussion. In the East India Commercial Co. case, one of the questions for consideration was whether the interpretation given by the Calcutta High Court to Section 167 of the Sea Customs Act, 1878 would be binding on authorities functioning within the jurisdiction of the High Court and the Supreme Court held that "it is implicit in the power of supervision conferred on a superior Tribunal that all the Tribunals subject to its supervision should conform to the law laid down by it& & We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subject matter and there is conflict of views among other High Courts, then the Tribunal will be free to formulate its own view in the light of Atma Steels (P.) Ltd. case; however, there is a decision of only one High Court in regard to disputed interpretation or proposition of law, the Tribunal is bound to follow that order since it is not at liberty to disregard the solitary High Court decision." 27. Therefore, relying on the ratio of Rishad Shipping & Clearing Agency Ltd Vs CCE & CGS, Indore (supra), we note that since no decision on this issue from the jurisdictional High Court has been brought to our notice and that there are conflicting decisions of Hon'ble High Courts of Delhi, Madras, Calcutta & Bombay, this Tribunal will be free to formulate its own decision. Since in this case we have already found that department itself was describing the time line provided in CBLR as sacrosanct, hence we rely on the judgments of Hon'ble High Court of Delhi and Madras, wherein, it was held that time line prescribed in the CBLR is mandatory and since in the present appeal the SCN has been admittedly issued beyond 90 days, thus, on this count itself, the SCN is not tenable and subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and such inconsistencies, even though explained later by the supplier, would not have been a cause for treating wrong advice to the client in relation to any of the provisions of the Act. We also observe that there is no allegation that the customs broker had submitted false or forged documents for clearance of the goods imported under Bill of Entry and that documents submitted by him were tampered with or suppressed by the customs broker before presentation to the customs authorities and there is nothing on record to show that the appellant, in their capacity as customs broker, were privy to the activity of alleged mis-declaration by the appellant, in the capacity of importer, except for a statement dt.17.08.2023 of Shri K.V. Sampath Kumar, Managing Director of appellant company, wherein, he has, inter alia, accepted his failure to comply with the provisions of Regulations 10(d) & 10(e). We find that while there are some questions addressed to Shri K.V. Sampath Kumar, Managing Director, relating to compliance with regulations of CBLR, he has given statement that he has failed to comply with the same but the said statement, to the extent it is applicable to the appellant, needs to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercised due diligence but were also trying to ascertain the reasons for the discrepancy in relation to import made by the appellant/importer, where they were acting as customs broker also. Therefore, at the first opportunity itself the customs broker has in fact, tried to ascertain the correctness of information and had filed the Bill of Entry based on all the documents which were otherwise found to be genuine. This, in itself, would suffice that they had exercised reasonable due diligence. It is also to be noted that out of 17 obligations, the department would charge only on two counts i.e., 10(d) & 10(e) and therefore, in respect of other obligations, they were not found to be noncompliant. Thus, to invoke 10(e) in this case without substantial evidence directly implicating them in positive manner in smuggling of goods, is not tenable. 30. Revenue is also relying on certain case laws in support that there is ground for invoking regulation 10(d) as well as 10(e) of CBLR. In the case of Sriaanshu Logistics through Proprietor Vs CC (Gen.) (supra), the facts are that the appellant themselves have admitted permitting use of their license to the third party for monthly remuneration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealt with in accordance with the provisions under the Customs Act in the proceedings relating to the improper import. It is also to be noted that while department has tried to highlight the role of customs broker in which department places trust and hence any breach has to be viewed seriously, we find that in terms of regulation 14, various grounds are there for revoking license including commission of misconduct i.e., regulation 14(c), but in the present case, it is obvious that department has relied only on regulation 14(b) by invoking regulations 10(d) & 10(e). Thus, when the grounds in SCN do not charge them with any misconduct or mistrust, etc., the same cannot be taken into account for the purpose of revocation of license, etc. 31. Therefore, we find that in view of detailed discussions relating to the factual matrix and relevant case laws relied by both sides, the impugned order dt.16.08.2024 is not sustainable on account of delay in issuing SCN as well as on account of non-substantiating the grounds for invoking regulations 10(d) & 10(e). Therefore, the impugned order revoking the license of the appellant as well as forfeiture of security deposit and imposition of penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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