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TMI Blog2025 (1) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... d other three importers, namely, M/s. R.M. International, M/s. T.G. Enterprise & M/s. M.M. Enterprise of Ahmedabad. They had misdeclared, allegedly in connivance, the Areca Nuts and Black Pepper of Indonesian and Vietnam origin, respectively as of Sri Lankan origin thereby misusing Indo Sri Lanka Free Trade Agreement (ISFTA) & South Asian Free Trade Area (SAFTA) agreement. Shri Vinod Kumar Sharma, Custom House Broker of M/s V. S. Bhagwati Shipping, who got cleared the goods from Customs at Nhava Sheva port is also alleged to have connived with the said three importers and Mr. Sarfaraz Khan in wrong availment of the benefit of ISFTA & SAFTA agreements with a view to circumvent payment of duty at appropriate rate. The live consignments of Areca Nuts and Black peppers were lying at Nhava Sheva being got cleared by M/s V S Bhagwati, the appellant as Custom Broker/ Custom House Agent and were seized on 13.11.2017. Those were 7 in number as per the details provided by Mr. Sarfaraz Khan on 06/07.10.2017 1.2 The matter was further investigated and it was revealed that Indian importers, other than above three, have also adopted similar modus operandi, which resulted in loss of Customs duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought cross examination of persons whose statements are relied upon in the SCN. The Inquiry Officer after hearing the appellants, submitted inquiry report. The Inquiry Report confirmed the alleged violation of the CBLR 2013/2018 as alleged in the SCN. Thereafter appellant CB participated in the adjudication proceedings under CBLR 2013/2018 as conducted by the Commissioner (Airport & General) and reiterated request for documents and cross examination. However, Learned Commissioner vide order number 08/2019 dated 08-02-2019 while agreeing with the recommendations/findings of the of the Inquiry Officer and while denying the opportunity of cross-examination revoked the License of the appellant CB, imposed penalty of Rs.50,000/ and forfeited security amount. Being aggrieved with the said order dated 08.02.2019, appellant filed the appeal before the Tribunal. Tribunal vide final order dated 29-06-2020 set aside the order of learned Commissioner of Customs and remanded the matter for de novo adjudication. Ld. Commissioner of Customs (Airport & General) vide impugned order No. 12/2021 dated. 03.02.2021 again ordered for revocation of appellant's/customs broker's license, forfeiture of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned, are absolutely unjustified and are contrary to the documents. There are catena of judgements that CB can obtain documents from the importers through third persons. Thus this finding of the ld. Commissioner is not sustainable. Regarding allegation of non compliance to Regulation 10 (d) of CBLR 2018 ( and corresponding Regulation of CBLR 2013 ) in respect of advising the clients correctly is concerned, same cannot be upheld against the appellant CB till any of the COOs are proved false or forged. All actions of the CB have to be judged in this regard not on the basis of inadmissible evidence but on the veracity of the COOs determined as per prescribed procedure. Regarding allegation of non compliance to Regulation 10 (n) of CBLR 2018 ( and corresponding Regulation of CBLR 2013 ) in respect of verification of IEC of the importers and their functioning the same are alleged to be misplaced. Learned Commissioner has upheld the same incorrectly as all the concerned importers whose consignments have been cleared by the appellant CB have joined investigations. None of their documents have been found to be forged, false or incorrect or deficient. Not a single importer has denied the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CBLR, 2013). 3. Failure to Advise and Report Non-Compliance: The CB knowingly allowed misdeclaration regarding the Country of Origin (COO) of goods to proceed without advising the importers to comply with customs regulations. Evidence shows that the CB facilitated the importers' attempts to incorrectly claim benefits under ISFTA/SAFTA schemes, thus violating Regulations 10(d) and 10(e) of CBLR, 2018. 4. Lack of Verification: Shri Vinod Kumar Sharma, the Proprietor and F-card holder of the CB firm M/s V.S. Bhagwati Shipping, in his statement, interalia stated that the documents such as Customer Information Sheet, undertaking regarding truthfulness and authenticity of SAFTA certificate & authority letter to Customs relating to consignments of Black Peppers imported in the name of M/s. T.G. Enterprise were not signed by the Proprietor, M/s. T.G. Enterprise, Ahmedabad and the signature on the said documents was different from the signature on the PAN card submitted by the Proprietor, M/s. T. G. Enterprises. Hence, it is clear that he failed to verify the KYC, antecedent, correctness of Importer Exporter Code (IEC) number, identity and functioning of his clients viz. M/s R. M. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submit genuine documents and should have brought the discrepancy noticed to the knowledge of the customs authority. The impugned show cause notice thus has alleged and the impugned order has confirmed the violation of several provisions of Regulation 10 of CBLR, 2018. 5.2 To check the correctness of the findings arrived at in the order under challenge (dated 03.02.2021). We observe that following two question need adjudication: (i) Whether the appellant as Customs Broker have violated Regulations 10(a), 10(d) 10(e), and 10(n) of Customs Broker License Regulations, 2018 (CBLR)? (ii) Whether the appellant/Customs Broker has connived with the importer and abetted the alleged act of misdeclaring the goods to be of Sri Lankan Origin? 6. Question No. 1 For this purpose, we proceed regulation wise as follows : 6.1 Regulation 10(a) of CBLR, 2018 reads as follows : "10.(a) 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." The adjudicating authority conclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; Regulation 10(e) A Customs Broker shall - Exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage; According to the department, Inquiry officer found that the CB neither advised the importers to comply with the provisions of the act nor did he brought to the notice of Deputy/ Assistant Commissioner of Customs the fact that importers have fake Certificates of Origin (COOs) Further, the CB himself had not ascertained the correctness of information in respect of origin of goods. Thus, CB has violated the provision of regulation 10(d) and 10(e) of CBLR, 2018 [erstwhile Regulation 11(d) and 11(e) of CBLR, 2013]. 6.3 We observe that these allegations have been leveled based on appellan's (Mr. Vinod Sharma) statements. The Ld. Counsel for the Appellant strongly submitted that the statement of the proprietor of the CB dated 22-11-2017 and the one dated 28-09-2017 was obtained under duress. We find that the said stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C.)], the Hon'ble Supreme Court has held that confession of a co-accused person cannot be treated as substantive evidence. Para 16 of the said judgment reads as under :- "We may, however, notice that recently in Francis Stanly @ Stalin v. Intelligence Officer, Narcotic Control Bureau, Thiruvananthapuram [2006 (13) SCALE 386], this Court has emphasized that confession only if found to be voluntary and free from pressure, can be accepted. A confession purported to have been made before an authority would require a closure scrutiny. It is furthermore now well-settled that the court must seek corroboration of the purported confession from independent sources." 6.5 Further, the said statement is not admissible for purpose of CBLR proceedings being recorded under Section 108 of the Customs Act 1962. While we are on Section 108 of the Customs Act, we may also advert to Section 24 of the Evidence Act, 1882 which deals with admissibility of a confession. Section 24 of the Evidence Act reads as under: "24. Confession caused by inducement, threat or promise, whenirrelevant in criminal proceeding. - A confession made by an accused person is irrelevant in a criminal proceeding, if the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.8 Appellant as CB is bound by the documents given to him by the importers. Further, till date department has not been able to produce any evidence that any of the documents submitted at the time of clearance of the imported Areca Nuts are forged or false. No report from the Country of Origin i.e Sri Lanka or from the alleged countries i.e. Indonesia and Veitnam have been obtained. The inquiry officers in their cross examination have admitted that they didn't call for any report verifying the genuineness of COOs from any of these countries. It has been acknowleged that the statement of appellant solely has been relied upon. As already held above the burden was still on department as the statements were alleged to be recorded under duress and were later retracted. Once documents on record point out imports being from Sri Lanka and there is nothing on record to show/prove otherwise, there was no necessity under CBLR 2013/2018 to give any advice to the contrary. Hence, we hold that the findings in this regard are not sustainable. 6.9 As far as allegation regarding not ascertaining the correctness of information in respect of Country of Origin of the goods is concerned, we find tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f / herself, in the case of an individual and those of the authorized signatory in respect of other forms of organization such as company/trusts, etc. and any two of the listed documents in the annexure to the said Circular. Thus, it is evident that even as per the Circular, obtaining a photograph and any two of the documents listed in the Annexure to the circular is sufficient compliance of Regulation 10(n) of CBLR, 2018. The most important documents in these cases are the IEC and the GSTIN - one issued by the same department and the other by the DGFT. The IEC issued by the DGFT has not been disputed at all without which the goods could not have been exported. The Appellant has obtained these documents as prescribed in the said Circular." 6.10 The task of verification of documents is of the departmental officers. Law also does not empower the CB to undertake any investigations. Hence this part of the allegation is without any basis and wrongful presumption that CB should have investigated the documents provided by the importers. Further, when law of the land states that COO certificates can not be challenged even by the Customs Authorities except by following a prescribed proced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the documents which are issued by the Government departments. The IEC number is issued by the Director General of Foreign Trade and the GSTIN is issued by the GST officers under the Central Board of Indirect Taxes and Customs of the Government of India or under the Governments of State or Union territory. The question which arises is has the Customs Broker to satisfy himself that these documents or their copies given by the client were indeed issued by the concerned Government officers or does it mean that the Customs Broker has to ensure that the officers have correctly issued these documents. In our considered view, Regulation 10(n) does not place an obligation on the Customs Broker to oversee and ensure the correctness of the actions by the Government officers. Therefore, the verification of documents part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were, indeed issued by the concerned officers. This can be done through online verification, comparing with the original documents, etc. and does not require an investigation into the documents by the Customs Broker. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this regard i.e., KYC, etc. would have been done by the customs authorities......." (Emphasis Supplied). 6.16 The responsibility of the Customs Broker under Regulation 10(n) does not extend to ensuring that all the documents issued by various officers of various departments are issued correctly. The Customs Broker is not an overseeing authority to ensure that all these documents were correctly issued by various authorities. 6.17 The third obligation under Regulation 10(n) requires the Customs Broker to verify the identity of the client using reliable, independent, authentic documents, data or information. In other words, he should know who the client is and the client cannot be some fictitious person. This identity can be established by independent, reliable, authentic i.e. documents, data, or information. Any of the three methods can be employed by the Customs Broker to establish the identity of his client. It is not necessary that it has to only collect information or launch an investigation. So long as it can find some documents which are independent, reliable and authentic to establish the identity of his client, this obligation stands fulfilled. Documents such as GSTIN, IEC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concluding that the Customs Broker has violated Regulation 10(n). 6.20 In view of above discussion, we hold that none of the provisions of CBLR, 2018 have been violated by the appellants. The findings to that extent are liable to be set aside. 7. Question No. 2 7.1 Foremost we need to know the meaning of abetment. It is a criminal offence hence is defined under Section 107 of Indian Penal Code, 1862 and now under Section 45 of Bhartiya Nyay Sanhita, 2023 to mean as follows: A person abets the doing of a thing, who: 1. instigates any person to do that thing; or 2. engages with one or more other person or persons in any conspiracy for the doing of that thing, if an act or illegal omission takes place in pursuance of that conspiracy, and in order to the doing of that thing; or 3. intentionally aids, by any act or illegal omission, the doing of that thing. Explanation 1: A person who, by wilful misrepresentation, or by wilful concealment of a material fact which he is bound to disclose, voluntarily causes or procures, or attempts to cause or procure, a thing to be done, is said to instigate the doing of that thing. Explanation 2: Whoever, either prior to or at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Surjeet Singh Chhabra Vs. UOI, reported in 1997, [(89) ELT 646 (SC)] wherein the Apex Court had held that "Customs Official are not police officers and admission made before them, though retracted, binds the deponent". 7.3 From the discussion under Question No. 1, it has already been held that the statement of appellant cannot be considered for want of any cogent corroboration for it as got retracted at the initial stage of seeking bail. There is no such evidence on record which may prove that COO from Sri Lanka, is a fake document that it was not issued by Sri Lankan Government. Thus the very basis of the allegations vanishes. In absence thereof, allegation of abetting the alleged imports by appellant being mastermind cannot at all sustain. The findings about retracted statement are wrong in light of the discussed case law while adjudicating Question No.1. Hence, we hold that appellant is wrongly alleged to be abetter/mastermind for such act/omission which department has failed to prove. There is also no evidence on record to prove that Arica nuts were being imported from Indonesia and black pepeers were being imported from Vietnam. In absence of any such documentary ev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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