TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 63
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....ion report submitted by the Directorate of Revenue Intelligence, New Delhi vide their letter 23/05/2017. It was reported by the DRI that while investigating a case of fraudulent registration of transferable duty credit scrips in EDI system which were not issued by DGFT and consequent utilization by debiting customs duty, the Custom House Agent M/s Alok Mehra (the appellant) was found to be involved in such fraudulent activity among other persons. It had been gathered that certain persons including the appellant had created credit amount in the EDI system on the basis of exhausted licenses which were originally issued by the DGFT, by fraudulent methods; that intelligence revealed that these duty credit scrips/license/Authorizations issued by the DGFT were initially registered at different port like Kochi port, Tuticorin port etc. and had already been utilized to their full value; that these very duty credit scrips were then re-registered in the EDI system at ICD Tughlakabad, New Delhi under the same scheme with same IEC particulars, for the same value or for the inflated value by fraudulent means; that twelve such duty credit scrips/license as detailed in the impugned order were del....
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....nse to him or to the importers and that Shri Lalit Jain used to make excuses; that he never met with or verified the identity of the sellers of the scrips personally; that he transferred the amounts for purchase of the scrips through RTGS in the accounts of sellers as per details provide to him by Shri Lalit Jain or his employee Mr. Prabhu; that he did not have any document to confirm that he purchased the licenses from Shri Lalit Jain M/s Ribs Exim and made payment as per the direction of Shri Lalit Jain or his staff that he was not aware as to who had got these licenses registered at ICD, Tughlakabad and that he never got registered any of these licenses. 3. On the basis of investigations, it has been alleged that the appellants have traded and dealt with forged duty credit scrips. The onus was on part of the appellant to ensure that the duty credit scrips were original and amount mentioned in the EDI system was actually for payment of customs duty. The appellant was required to have physical/hard copy such duty credit scrips alongwith debit sheet, which he failed to produce. The appellant also failed to produce any documents suggesting procurement of the forged licenses from Sh....
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.... to do thus, this is a case of utilization of forged scrips. The registration number is generated after verification and once the license registration number is endorsed on the license, license holder is eligible to use the scrip for the purpose of debiting the duties on the imports against the said scrip. However, at the time of assessment, the importer has to produce the original copy of license as per the requirement of relevant notifications and it is the responsibility of the CB to guide his clients that user shall possess the original copy of scrip. In the present case, the CB has procured these scrips himself but did not have the original copy of the scrip which shows lack of due diligence to ascertain the correctness of information; that the DRI report is also not on the basis that the CB has registered the duty scrips but allegations are of using the fraud scrips without verifying/holding the original copy of scrips. He cannot escape from this obligation. In the era of EDI it is not necessary that the assessing officer mandatorily ask for these documents used for clearance of goods, but he should possess the original ones which should be produced when asked for. That this ....
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.... at the stage of registration of the scrips. Therefore, initiation of proceedings against the appellant amounts to double jeopardy which is not permissible. That the orders passed in respect of the similarly situated CBs by the then learned Commissioner may also be taken into consideration. That the first offence report in the case had been received in the office of the Hon'ble Commissioner of Customs (General), NCH, New Delhi vide letter dated 28/03/2016 and thus, the mandatory 90 days' time limit for issue of a show cause notice under Regulation 20 (1) commenced in this case on 28/03/2016. As such, the show cause notice issued on 30/08/2017 is time barred and, therefore, not sustainable for this reason. 7. The learned Commissioner vide impugned order-in-original had confirmed the revocation of the license in terms of Regulation 18 readwith Regulation 20 (7) of the CBLR, 2013 issued under Regulation 9 (1) of CHALR, 2004 (now Regulation 7 (1) of CBLR, 2013) and imposed a penalty of Rs. 75,000/- by forfeiting the security deposit under the CHALR/CBLR holding that the appellant had violated the provisions of Regulation 11 (d) and 11 (e) of CBLR, 2013. He has held that the appellants....
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....ved from SIIB, ICD, TKD, New Delhi and that said offence report consist of fraudulent utilization of three duty credit scrips i.e. 0410143428, 0410144516 and 3510035217 but the DRI investigation report consists of fraudulent utilization of eleven (11) duty credit scrips including the said three scrips; that the proceedings in respect of the three duty credit scrips mentioned in the SIIB, TKD, New Delhi letter dated 28/03/2016 and 06/04/2016 is hit by time limitation prescribed under Regulation 20 of the CBLR, 2013 and therefore, the learned Commissioner held that the proceedings initiated under the instant show cause notice in respect of fraudulent utilization of all the three duty credit scrips were time barred; that, however, the proceedings initiated against the investigation done by the DRI, who unearthed the fraudulent utilization of eight more duty credit scrips which had not come into the notice of SIIB, TKD, New Delhi, is well within the prescribed time limit and thus, the offence report dated 28/03/2016 and 06/04/2016 cannot be said as offence report in respect of the remaining said eight duty credit scrips. 8. The appellant is presently before us against the impugned ord....
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....scape scrutiny by the custom officers. The appellant had placed reliance upon order-in-original No. 38/SM/Policy/ 2016 dated 25/05/2016 where the adjudicating authority held "genuineness of scrip can be ascertained while it is registered in EDI system. Once it has been registered in EDI system and duty has been debited with the said scrip, CHA/Custom broker has prima facie no reason to doubt upon the genuineness of the scrip......" That the appellant was a victim of fraud and could not be penalized. That once the importers had reimbursed the payments for payment against the scrips it clearly amounted to importer's implicit permission. He also stated that in similar proceedings, against another custom broker M/s HLPL Global Logistics Pvt. Ltd. arising out of the same DRI investigation report in the same twelve forged scrips. The CESTAT, Delhi had dropped proceedings against the custom broker vide final order No. 50145/2019 dated 01/02/2019. 9. On the other hand the learned Departmental Representative has reiterated the findings of the adjudication order. 10. We have carefully examined the findings in the order-in-original and the arguments advanced by the learned Counsel of the ....
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....Customs (General), the modus operandi of the EDI System is noted as under: "55.2 In this regard, I observe that ICD TKD Export Commissionerate, New Delhi, the concerned Customs formation, is working under EDI system. As per procedure of registration of script/ license in EDI system, genuineness of scrip can be ascertained while it is registered in EDI system and once it has been registered in EDI system and duty has been debited with the said scrip, there may not be any reason to doubt about the genuineness of the said scrip. I, further find that ICD, TKD Export, New Delhi being an EDI Port, details of registered scripts are available in EDI system and debit of duty has to be made on the EDI system only, which appear to be verifiable on the system directly. As genuineness of scrip could have been ascertained at the time of registration of script in EDI system I, further, observe that in present case, as per preliminary investigation, done till now, the said CB has not been found involved in trading of CB license. I, therefore, observe that the omission/contravention, if any, on the part of CB in such a scenario does not prima facie appear to be grave enough to continue suspensio....