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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 ..... ndertake 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 procedure, how can a CB challenge those documents and in particular when the certificates were supported by Bill of lading,Commercial invoice etc. None of these documents have been objected nor have been denied by the importers to have been provided to the appellant. Law does not require a custom broker to physically deal with the goods before the same are received in custom area. The Custom Broker operates on the basis of document supplied to him and in that context it can hardly be held that the documents/ details filed by the Custom Broker on the strength of documents supplied by the importers are wrong - there are no merit in confirmation of charge under Regulation 10(d) and 10(e)of the CBLR 2018. The same is therefore liable to be dropped. Violation of provisions of Regulation 11(n) of CBLR, 2018 - HELD THAT:- Regulation 10(n) does not place an obligat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has wrongly been used against him while penalizing him. The adjudicating authority, while doing so, has acted in gross violation of Article 21 of the Constitution of India.
Conclusion - The appellant did not violate any provisions of the CBLR, 2018, and there was no evidence of connivance or abetment in the alleged misdeclaration of goods' origin.
The impugned order is set aside - appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... form of whatsapp messages /emails as well as oral evidences in the form of statements of Shri Sarfaraz Khan Pathan, Shri Raju Kothari, financier, Shri Mohammad Ershad Ahmed, Partner, M/s. Hamza Enterprise, Bangalore, Shri Lalit Agrawal and Ghanshyam Agrawal, Partners, M/s. Om Shiva Shakti Products Inc., Bangalore. 1.4 Based on these observations, department alleged that apart from the contraventions of the Customs Act, 1962, the CB had also violated various regulations under Customs Brokers Licensing Regulation, 2018 (read with erstwhile Customs Brokers Licensing Regulation, 2013). Accordingly, a Show Cause Notice No. 28/2018 dated. 16.08.2018 was issued to Appellant wherein it was alleged that the CB/ appellant had failed in complying with Regulations 10(a), (d), (e) & (n) of CBLR, 2018 (read with erstwhile CBLR, 2013) and is, therefore, liable for action under Regulation 14 read with Regulation 17 & 18 of CBLR, 2018 (read with erstwhile CBLR, 2013), including revocation of license, forefeiture of part or whole of security amount and imposition of penalty. 1.5 Based on these allegations and in compliance to CBLR 2018, an Inquiry Officer was appointed. The appellant CB attended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quiry Officer, Inquiry Report as well as the statement of the Inquiry Officer during Cross examination. Not a single document mentioned in the body of the SCN has been identified by the Inquiry Officer during Cross Examination. Further it has been proven by the statements during cross examination of the concerned investigating officers of DRI that there is no conformation from Sri Lankan Authorities regarding Certificates of Country of Origin ( COO) being false or forged. In the absence of the same, the COOs as per CBIC instructions as well as judicial pronouncements cannot be rejected by the Customs authorities. It is also submitted that statements under Section 108 Customs Act 1962 are not admissible in CBLR proceedings. Further, if the allegations of false or forged COOs is not proved, the entire allegation does not survive. In the absence of COOs being proved to be false or forged by Sri Lankan Authorities, the same shall prevail over any statement recorded by DRI officers on the principle that documentary evidence shall prevail over oral evidence. 3.2 It is further submitted that allegations upheld in the impugned order regarding non compliance to Regulation 10(a) of CBLR 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficient evidence on record as a proof for the alleged illegal act on the part of the appellant. Hence, there is no infirmity in the Order under challenge as apparent from following submission: 1. Failure to Obtain Authorizations: The CB did not secure necessary authorizations from the proprietors of the importing firms M/s R.M. International, M/s T.G. Enterprise, and M/s M.M. Enterprise. All interactions were conducted through a third party, Mr. Sarfaraz Khan Pathan, as evident from the confessional statement dated 28.09.2017 &22.11.2017 of Sh. VK Sharma (the proprietor and 'F' card holder of CB firm M/s V.S.Bhagwati Shipping), indicating a lack of direct engagement with the actual importers. This constitutes a violation of Regulation 10(a) of CBLR, 2018(read with Regulation 11(a) of erstwhile CBLR, 2013), which mandates direct authorization from clients. 2. Negligence in KYC Compliance: The CB failed to perform due diligence by not obtaining KYC documents directly from the importers. KYC details were submitted through an intermediary, which is contrary to the regulatory requirement that mandates direct verification. The Inquiry Officer observed that the CB's actions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h these observations, the order under challenge is hereby upheld. Consequent thereto, the appeal is dismissed." (iii) Baraskar Brothers Vs. Commissioner of Customs (General), Mumbai reported as 2009 (244) ELT 562, wherein it is held that "there is no second opinion to the fact that the CHA is a very important component in the whole system of Customs administration, which has a major bearing on Customs revenue collection and national security. The CHAs cannot shy away from the responsibilities and obligations casted upon them by law". In light of these submissions, the appeal is accordingly prayed to be dismissed. 5. Having heard the rival contentions and perusing the entire records, we observe and hold as follows: 5.1 The present case is arising out of the allegation that the appellant, being the customs broker was aware of the fact that the origin of impugned imported goods, Areca Nuts and Black Pepper was Indonesia and Vietnam respectively and that the same was misdeclared as of Sri lanka origin in connivance with importers and one Mr. Sarfaraz Khan Pathan. It has been held by the adjudicating authority below that the appellant was required to have authorization from the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is for the time being employed/ authorised as a Customs Broker. No provision under the Customs Act 1962 or under CBLR 2013/2018 requires CB to interact in person with the importer or exporter. Further, it is observed that none of the importers in their statement denied appellant to be their authorized CB. There is no statement recorded from any of the importers that they did not authorize the appellant to conduct customs clearance work with respect to the impugned imports. There is also no denial of any of the three importers that Mr. Sarfaraz Khan was dealing with CB on their (importer's) behalf. There is even no allegation that authorisation was asked by any officer and that it was not produced. We find that the authorization of importer M/s. R M International is on record. Thus the finding of learned Commissioner with respect to Regulation 10(a), as observed above, is against the facts and contrary to the documents and statements on record. Therefore, we find that the impugned order was not correct in its finding holding that the appellant violated Regulation 10(a) of CBLR 2018. 6.2 Regulation 10(d) and 10 (e) reads as follows. Regulation 10(d) A Customs Broker shall - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egically withheld from the Revenue Officers, so that they become complacent and do not carry out a fuller investigation. It appears that the Revenue Officers in the present case have fallen victim to this type of strategic confessional statements which have been retracted soon after they were made in the affidavits which were withheld by the deponents till the proceedings came up before the Commissioner, by which time the damage of not making a fuller investigation, thinking that the confessional statements are made and not retracted, was already done." 6.4 We further observe that the extract of WhatsApp Chats from appellant's mobile is also relied upon. From the perusal we find that even the said whatsApp chats do not show that appellant violated any of these two regulations. Otherwise also, someone else's or of the co-noticee conversation, though with appellant cannot be considered as confession of appellant. We observe that the chats rather are reflecting that appellant had advised the importer that to take the benefit of COO certificate, it must be printed on PP bags itself. Hence, it is wrongly held that the appellant has failed to advice his clients. We draw our support fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est Bengal, AIR 1970 SC 940 = 1999 (110) E.L.T. 324 (S.C.) = [1968] 1968 taxmann.com 3 (S.C.) held that customs officers are entrusted with the powers specifically relating to collection of customs duty and prevention of smuggling. For that purpose, they are invested with the power to search any person on reasonable suspicion, to summon a person to give evidence, to arrest such a person if there is a reasonable suspicion that such a person is guilty of an offence under the Customs Act etc. 6.7 We also observe that the findings by the learned Inquiry officer and Ld. Commissioner has no discussion and elaboration as to how Appellant came to know that imported Areca Nuts and Peppers were not of Sri Lankan origin. The statement of appellant is held to be the clear admission of appellant about having prior knowledge of the fact that COOs are fake without any corroborating evidence about the alleged fakeness. The imports are admitedly covered by Documents issued by Government of Sri Lanka and also by all requiered commercial documents. These documents issued by another Sovereign Government, the documentary evidence, can not be disbelieved and discarded on the basis of the oral evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same being made available to the appellant-CHA, resulting in gross violation of the process of the court, and the principles of Natural Justice. Mere reliance on the Suspension Order and the allegations in the show cause notice by the ld. Commissioner in passing the impugned order, has vitiated the impugned order, leading to mis-carriage of justice. 19. We further observe that the main allegation against the appellant CB is connivance in production of false certificate of „country of origin‟, submitted at the time of clearance along with the bills of entry. The only evidence in this case appears to be the confessional statement of the authorised person of appellant, Mr. V.K. Sharma. There is no report from the Appropriate Authority of Sri Lanka disputing the certificate of origin, who are the competent persons to give evidence in the matter. There is no whisper of any verification made by the Customs Authority during investigation from Sri Lankan Authority." Final order of this Tribunal, Kolkata Bench, in the case of B. K. Clearing Agency Vs. Commissioner of Customs (Administration & Airport), Kolkata bearing No. 75256/2023 dated 26.04.2023 has held that: "14. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CBLR 2018. The same is therefore liable to be dropped. 6.12 The next charge upheld against the appellant relates to violation of Regulation 10(n) of the CBLR,2018. The Regulation10(n) reads as follows: "The Custom Broker shall verify correctness of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN), identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information." 6.13 The adjudicating authority below has held that the CB did not verify the KYC, antecedent, correctness of importer exporter code (IEC) number, identity and functioning of his clients at the declared address and thus the CB has failed to perform duties casted upon him under the provisions of Regulation 11(n) of CBLR, 2018. From the above provision, we find that the obligation of CB under Regulation 10(n) can be summarized as follows : (a) Verify the correctness of IEC number (b) Verify the correctness of GSTIN (c) Verify the identity of the client using reliable, independent, authentic documents, data or information (d) Verify the functioning of the client at the declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial character which he claims in such paper." 6.15 We find that Regulation 10(n) nowhere extends the responsibility of the CB to physically going to the premises of each of the importers to ensure that they are functioning at the premises. When a Government officer issues a certificate or registration with an address to an Importer, the Customs Broker cannot be faulted for trusting the certificates so issued. It is otherwise not the case of department that IEC etc. of the importers herein were forged. Infact all the importers were found existing and they even joined the investigation and admitted appellant to be their CB for clearance of impugned imports. It has been held by the High Court of Delhi in the case of Kunal Travels [2017 (3) TMI 1494-Delhi High Court = 2017 (354) E.L.T. 447 (Del.)] that "the CHA is not an inspector to weigh the genuineness of the transaction. It is a processing agent of documents with respect of clearance of goods through customs house and in that process only such authorized personnel of the CHA can enter the customs house area……… It would be far too onerous to expect the CHA to inquire into and verify the genuineness of the IE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed using documents or data or information so long as it is reliable, independent and authentic. Nothing in this clause requires the Customs Broker to physically go to the premises of the client to ensure that they are functioning at the premises. The Regulation, in fact, gives to the Customs Broker the option of verifying using documents, data or information. If there are authentic, independent and reliable documents or data or information to show that the client is functioning at the declared address, this part of the obligation of the Customs Broker is fulfilled. If there are documents issued by the Government Officers which show that the client is functioning at the address, it would be reasonable for the Customs Broker to presume that the officer is not wrong and that the client is indeed, functioning at that address. There is nothing on record to show that either of these documents were fake or forged which are otherwise issued by competent government authorities. Therefore, they are authentic and reliable and we have no reason to believe that the officers who issued them were not independent and neither has the Customs Broker any reason to believe that they were not independe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch person's suicidability pattern is different from the other. Each person has his own idea of self-esteem and self-respect. Therefore, it is impossible to lay down any straitjacket formula in dealing with such cases. Each case has to be decided on the basis of its own facts and circumstances. 25. Abetment involves a mental process of instigating a person or intentionally aiding a person in doing of a thing. Without a positive act on the part of the accused to instigate or aid in committing suicide, conviction cannot be sustained." 7.2 Reverting to the facts of the present case, we observe from Para 18 of Order-in-Original that the allegations of conspiracy/abetment are that appellant was mastermind in fraudulent import of impugned goods which has been confirmed based on following findings: (i) He himself confessed to have all the knowledge about how to fraudulently obtain COO certificate for the goods which are not of Srilankan Origin. (ii) DRI had also intercepted an Indonesia Seal Intact container during investigation. (iii) A copy of bail application by the CB, stating that the CB had retraced from all his statements is unsigned and uncertified and it could not be e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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