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TMI Blog2025 (2) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... lf of M/s. Kenstar Overseas and six shipping bills on behalf of M/s. Alpha Impex in the month of May-June 2009 - Apparently and admittedly the impugned show cause notice was issued on 19.05.2015 i.e. six year after the impugned export consignments got cleared by the appellant. There are no denial of Shri Vinod Kumar Mulani, the beneficial owner of the exports, who is the alleged mastermind behind the fictitious firms fraudulently exporting the inferior quality of garments to receive ineligible duty drawback, that the appellant was authorized to clear the impugned export consignments. This Tribunal in the case of M/s. Mauli Worldwide Logistics Vs. Commissioner of Customs, New Delhi (Airport and General) [2022 (7) TMI 368 - CESTAT NEW DELHI], has also held that the fact that appellant had carried out due diligence is consistent with the fact that the KYC documents were obtained by him as CHA and were submitted by him before the Commissioner. Same is the fact of the present case. Hence the decision is squarely applicable in the present case also. Hon'ble Delhi High Court in the case of Kunal Travels [2017 (3) TMI 1494 - DELHI HIGH COURT] has held that the CHA is not an inspector to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l proofs. Based on the said intelligence, the investigations were conducted. Shri Vinod Kumar Mulani despite several summons avoided his presence and cooperation to the investigating officers, however he surrendered on 06.09.2010 before the court of ACMM, New Delhi and prayed for the bail and he joined the investigation pursuant to the directions of the said court on 17.09.2010 wherein he disclosed the name of the bogus firms opened by him and the names of the persons in whose name those firms were got opened. He also named about various traders from whom he was purchasing the garments and that he also got opened the bank accounts in the names of those firms crated by him. The investigating team recorded the statements of various others who were named by Shri Vinod Kumar Mulani and conducted searches in several premises including the premises of the appellant. He disclosed that Shri Binod Kumar Singh, partner of M/s. Innovative Cargo Services, CHA, Who is the present appellant, had undertaken the customs clearance of his proprietary concern M/s. Simran Exports, M/s. Alpha Impex and M/s. Kenstar Overseas. 1.2 He also stated that said Shri Binod Kumar Singh had charged Rs.2000/- per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,00,000/- under Section 114AA of the Customs Act, 1962 was imposed vide Order-in-Original No. 35/2017 dated 23.02.2017. The appeal against the said order has been rejected vide the Orderin- Appeal No.689/2019-20 dated 31.10.2019. Being aggrieved the appellant is before this Tribunal. 2. We have heard Shri Sharad Srivastava and Ms. Gunjan Tanwar, learned Advocates for the appellant and Shri Rakesh kumar, learned Authorized Representative for the department. 3. Learned counsel for the appellant has submitted that the appellant was engaged in clearance of the export consignments of the exporters namely M/s. Alpha Impex and M/s. Ken Star Overseas. Shri Vinod Kumar Mulani had provided all the KYC documents and all the other requisite documents. It is submitted that though the investigation revealed that the exporter were nonexisting and goods were over-invoiced so as to avail the excess amount of drawback but the appellant was not aware about the same. There is nothing on record to show that the appellant had any prior knowledge or was in any way in connivance with the said exporters or had abetted the impugned fraudulent exports. It is submitted that the appellant filed the shippin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 2004 which require that CHA should meet exporter or importer physically before taking assignment of clearance. The appellant was otherwise duly authorized by the proprietors of the exporters for clearance of their consignments. There is no reason of imposition of penalty upon the appellant as has been imposed in the order under challenge. Accordingly, the order under challenge is prayed to be set aside and appeal is prayed to be allowed. 4. While rebutting these submissions, learned Departmental Representative has submitted that it is an admitted fact that the appellant did not meet the proprietors of the exporting firms M/s. Alpha Impex and M/s. Ken Star Overseas for whom the documents were filed by the appellant for the clearance of the export consignment of the firms. This admission reflected sufficient violation of CHALR, 2004 in as much as the appellant accepted the work and documents for customs clearance of export consignments of these firms without meeting the proprietors thereof. It was gathered from the statements of all notice including the mastermind that entire fraud of siphoning off duty drawback from government accounts was done by overvaluing the inferior qualit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness in a proper manner, inform any change in address etc., not withhold any information and report it to the Customs Authorities etc. which he has failed to abide by. Thus, the order of the Commissioner of Customs is proper and the appeal of the appellant needs to be dismissed. Learned Departmental Representative has relied upon the decision of Hon'ble Apex Court in the case of Commissioner of Customs Vs. K.M. Ganatra & Co. reported as 2016 (332) ELT 15 (SC) 4.2. Finally is submitted that the fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. In order to gain by another's loss is deception. As per Shri Vinod Kumar Mulani's own admission, the appellant in the present case was getting extra benefit for conniving Shri Vinod Kumar Mulani in the impugned fraudulent exports. Learned Departmental Representative submitted that in light of these proven facts, there is no infirmity in the order under challenge. Accordingly, appeal is prayed to be dismissed. 5. Having heard both the sides and perusing the records, we observe and hold as follows: 5.1 The appellant herein is aggrieved of the imposition of penalty upon him in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf of the exporters were got duly verified from the website of respective departments including that of DGFT website. The exporting firms were found duly registered and existent at the given address. The Import Export Codes of these firms were also found to be genuine. Though it is the case of the department the none of the firms were found existing at the given address which amounts to be failure on part of the CHA. However, in the light of the said contention of the appellant and no evidence produced by the department to prove that any of the documents (KYC) were fake or forged, it stands clear that the addresses were correct as per the documents issued by several government departments and were duly verified by the appellant through the respective websites. To our understanding this is the sufficient compliance of obligations under CHALR on part of the appellant and amounts to sufficient due diligence on its part. We draw our support from the decision of this Tribunal in the case of Nirmala Rishi Vs. Commissioner of Customs, New Delhi reported as 1999 (112) ELT 287, the decision in the case of Shaikh & Pandit Vs. CC (Prev.), Calcutta reported as 2001 (131) ELT 402, even the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d systems which allowed documents to be issued to non-existing businesses. Bases on this decision the allegations against the appellant and the contention of the department that since the firms were found non-existing and fictitious, the CHA is liable to penalty, is not acceptable. 5.6 Hon'ble Delhi High Court in the case of Kunal Travels reported as 2017 (3) TMI 1494 has held 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. It would be far too onerous to expect the CHA to inquire into and verify the genuineness of the IE code given to it by a client for each import/export transaction. When such code is mentioned, there is a presumption that an appropriate background check in this regard would have been done by the requisite authorities. Above all CHA need not to sit as an examiner or supervisor to such authorities issuing the documents to the importer/exporter as the case may be. Even the CHALR Regulations do not expect the CHA to physically examine the genuineness vis-à-vis the identity of his client and his existence at the address mentioned on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT, New Delhi in its Study Report on the Final Orders has also highlighted that the offence report sent by the organization booking such offence case should clearly contain the role played by the Custom Broker in the offence case. The Custom Broker being a Co-noticee in the offence case under Customs Act, 1962 has to be linked to the proceedings initiated against the Custom Broker under CBLR, 2018. In these offence cases, it is necessary to prove the element of 'abatement' of Custom Broker in the offence. 4. Accordingly, implicating Customs Brokers as co-noticee in a routine manner, in matters involving interpretation of statute, must be avoided unless the element of abetment of the Custom Brokers in the investigation is established by the investigating authority. Further, the element of abetment should be clearly elaborated in the Show Cause Notice issued for the offence case under the provisions of the Customs Act, 1962. Further, as regard the suspension of licenses of Customs Brokers, Instruction No. 24/2023 dated 18.07.2023 shall continue to be followed. 5.10 As already observed above there is no evidence produced by the department to prove the allegations of lack due dil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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