TaxTMI 
TaxTMI 
2019 (12) TMI 482
X X X X Extracts X X X X
X X X X Extracts X X X X
....er appeal has been filed by the Appellant against the suspension of his licence. 1.3 Since both appeals arise out of the same proceedings and are interlinked, they are taken up together. 2.1 Appellants are Custom Broker operating on the strength of regular Custom Broker License No 11/1680 issued by Commissioner Customs (general) Mumbai Zone -I under Regulation 7(1) of CBLR, 2013 (now Regulation 7(2) of CBLR, 2018). 2.2 The Additional Commissioner Customs SIIB (I) ACC Mumbai forwarded a offence report dated 22.06.2017 to the Commissioner (General) stating that Appellant had processed the import clearance of the 200 pcs of "Blank Firing Guns" declared as "Metal Toys" by classifying them under CTH-9503 instead of CTH-9303 for their clients M/s Airsoft Gun India. Investigations undertaken revealed that Appellants had in past filed five B/E for the import clearance of same goods for the same clients. The current B/E No 9616942 dated 09.05.2017 was put on hold on 13.06.2017. 2.3 After completion of investigations a Show Cause Notice dated 11.06.2018 was issued by the Commissioner Customs (Import) ACC Mumbai, to Airsoft Gun India making Appellant and it's Director Shri Ben Jos....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... • When they approached them for import clearance of the import consignment for the first time in 2015, they took all documents required for KYC which included their ISO Certification, Sales Tax and VAT Registration etc. • Importer also provided them a write up on the Blank Guns along with Invoice, Airway Bill and test report from the Forensic Laboratory. Importer also informed them that these are Toy Guns and are used for amusement purpose as in movies etc., and also that these are classified under heading 9503 at various ports in India as per the information available of website "zauba.com". • After checking up the information and the classification as claimed from the website referred by the importer, they filed first Bill of Entry No 3214478 dated 10.11.2015 as per invoice declaring the goods as "Metal Toy Guns". The goods were examined under the supervision of Dy Commissioner (Shed) and examiner reported that these guns do not look like "toys". Examiner sent the samples to Appraising Group for verifying description and applicability of Arms Act and Police NOC. Group referred the matter Truth Labs Forensic Services for testing whether Blank....
X X X X Extracts X X X X
X X X X Extracts X X X X
....classified the goods under 9503. • They had declared the goods as per the information provided by the importer and the goods were assessed and the classification determined by the proper officer of Customs after due examination and verification of goods. • For the failure of the proper officer to determine the correct classification, Custom Broker could not have been held responsible. • Proceedings conducted are also marred by delay at every stage. As per the Custom Broker Licensing Regulation the entire proceedings initiated against them for revocation of license should have been concluded within a period of 270 days from the date of receipt of offence report. However for the reason of delay at every stage, the proceedings took 625 days to conclude thus there is delay of nearly 355 days. • In view of submissions as above the order revoking the license cannot be sustained and needs to be set aside. 3.3 Arguing for the revenue learned Authorized Representative submitted that- • Appellants had in the B/E filed intentionally and deliberately misdeclared the good to circumvent import policy restrictions and requirement....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o Description (as per B/E) Description as per Invoice Number 1 ARAL 622 Metal Toy Gun Black ARAL 622 Metal Toy Gun Black 20 2 ARAL 1071 Metal Toy Gun Satin with golden parts ARAL 1071 Metal Toy Gun Satin with golden parts 20 3 ARAL 1071 Metal Toy Gun Chromewith golden parts ARAL 1071 Metal Toy Gun Chromewith golden parts 20 4 ARAL 610 Metal Toy Gun Satin ARAL 610 Metal Toy Gun Satin 40 5 ARAL 610 Metal Toy Gun Chrome ARAL 610 Metal Toy Gun Chrome ARAL 610 Metal Toy Gun Chrome 6 ARAL 1453 Metal Toy Gun Satin ARAL 1453 Metal Toy Gun Satin 40 7 ARAL 1453 Metal Toy Gun Matte Chrome ARAL 1453 Metal Toy Gun Matte Chrome 20 4.3 On the basis of the intelligence the goods were examined jointly by SIIB and DGoV on 13.06.2017. During Course of examination in every package of the imported goods, (200 pieces) a pamphlet was found showing the Brand Name ARAL and Istanbul in the Address. Other leaflet showed following instructions and warnings: (i) "Before you use your blank pistol, please read and follow warnings/ instruction in this br....
X X X X Extracts X X X X
X X X X Extracts X X X X
....7 a. In his statement recorded on 19.06.2017, Shri Rajesh Kumar Goswami, Proprietor of Importer stated that- • They own and maintain website by name airsoftgunindia.com, and all the sale of the guns is undertaken through the said website. • On their website, they have declared that ARAL 1453, ARAL 622, ARAL 610 & ARAL 1072 are blank firing guns used in Bollywood and Hollywood movies for sounds and spark just like real guns, whereas while filing the B/E they had declared them as Metal Toy Guns. It was stated in the "Truth Lab Report" that these guns are non lethal and do not come within the purview of Indian Arms Act and cannot be converted into real fire arms. He is not aware whether "Truth Lab Forensic Services" is approve forensic lab. • Their CHA, M/s Bruce Logistics (Appellant) suggested them to declare the goods as Metal Toy Guns. • He was not aware of the provisions and restrictions imposed in terms of Arms Rules notified on 15th July 2016 to effect that acquisition, possession, carry or use of Blank Firing Guns for theatrical productions requires license. • Since November 2015 they have imported Six Consignm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ab Kalina by the Customs as part of due diligence with regards to understanding nature of goods, if the goods were harmful for human beings and if the goods can be modified to lethal Firearms. He is not aware of the report of Police Forensic Lab, Kalina but after detailed scrutiny goods were cleared by the Customs. • As per their understanding and also the understanding of Customs there was no licensing requirement. • This procedure had been followed for the clearance of all consignments. Even in respect of the B/E 9616942 dated 09.05.2017, for which the clearance has been put on hold, there has been query by the shed appraiser because as per his understanding, there has been amendment in the Arms Rule in July 2016 as per which license was required. Appraiser had also highlighted the correct classification to be 9303. After discussions with the Shed Deputy Commissioner and Additional Commissioner, importers has been asked to produce the license which he was in process. However subsequently after a week the consignment was examined by SIIB and put on hold for the same reason. • None of his any other client imported the same or similar goods. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r their defence, it is upto them to get and produce before Inquiry Officer and not the other way round. 2. The statements dt 19/06/2017 and dt 25.07.2017 of Mr Ben Tharakan, Director of M/s Bruce Logistics Pvt Ltd. And statements dt 19/06/2017 and 27/07/2017 of Mr Rajesh Kumar Goswami. Proprietor of M/s Airsoft Gun India which are relied upon documents in this case are not retracted till date by any of them. Taking into the consideration of above findings and Presenting Officers report, I found that Articles of Charge of the said notice stand proved and vindicated." 4.7 Commissioner (General) after the receipt of enquiry report conducted the hearing on 20.11.2018, when appellants filed the written submissions/ reply. Thereafter impugned order, referred in para 1, supra was passed holding as follows: "11.1 This is the case of import of 200 pieces of 'Blank Firing Guns' declared as 'Metal Toy Guns' by classifying under CTH 9503 instead of CTH 9903 vide BE No. 9616942 dated 09.05.2017 imported by M/s. Airsoft Gun India. It is observed that the importer had imported six consignments since Nov 2015 including above mentioned live consignment, out of which fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inciple of natural justice and disregard to the provisions contained in Rule 20 of CBLR, 2013, without giving them any opportunity to present their case and produce their defence. During preliminary hearing on 17.01.2018 before the Inquiry Officer, they have asked some additional documents for the reasons of preparing their defence. As per CB's version the same were not provided and the CB could not produce their defence before the inquiry. The CB has quoted following citation in support of his contention: Silicon Graphics System (India) P. Ltd. vs. UOI - 2006 (204) ELT 247 (Bom.) Shripra Alloys Ltd. vs. CCE, Nagpur - 2007 (220) ELT 297 (Tri- Mum) wherein supply of non-relied upon documents may not be relevant for the department by may be relevant for affected party to prepare his defense. Therefore, request for their supply cannot be said to be frivolous. 11.4 In above context, it was mentioned by IO in his report dated 12.10.2018 that the documents sought by the CB were neither on records nor they were made relied upon documents. Hence, those documents cannot be provided by Inquiry Officer to the CB and had no relevance for CB at all. If the CB....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lant that there has been in-ordinate delay in processing the proceedings leading to revocation of their license, though the timelines provided by the Custom Broker Licensing Regulations have not been strictly complied with. Hon'ble Bombay High Court has in case of Unison Clearing Pvt Ltd [2018 (361) ELT 321 (Bom)] held as follows: "15. In view of the aforesaid discussion, the time limit contained in Regulation 20 cannot be construed to be mandatory and is held to be directory. As it is already observed above that though the time line framed in the Regulation need to be rigidly applied, fairness would demand that when such time limit is crossed, the period subsequently consumed for completing the inquiry should be justified by giving reasons and the causes on account of which the time limit was not adhered to. This would ensure that the inquiry proceedings which are initiated are completed expeditiously, are not prolonged and some checks and balances must be ensured. One step by which the unnecessary delays can be curbed is recording of reasons for the delay or non-adherence to this time limit by the Officer conducting the inquiry and making him accountable for not adhering....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n being found to have transgressed its parameters. The licence granted under the Regulations of 2004 or 2013 cannot be said to be coupled with any grant or interest making it irrevocable. Such is not the contentions of the petitioner. 17. M/s. Asian Freight (Unit of Esan Freight & Travel Pvt. Ltd.) & Anr. (supra) went into the question whether the provisions are mandatory or directory and arrives at a finding that, the time-limit in Regulation 20 of the Regulations of 2013 is not mandatory and that, any proceeding for revocation of Customs House Agents' licence beyond ninety days of receipt of the offence report would not per se stand invalidated by mere reason of such belated initiation. The Division Bench of the Bombay High Court in Unison Clearing Pvt. Ltd. (supra) considers the issue whether the timeframe prescribed in Regulation 20 of the Regulation of 2013 is mandatory or directory. It holds that, the time-limit contained in Regulation 20 of the Regulations of 2013 cannot be construed to be mandatory but directory. It goes on to say that, the timeline framed in the Regulation need to be rigidly applied, fairness would demand that, when such time-limit is crossed, the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n to corroborate each detail contained in the confessional statement. The Court is required to examine whether the confessional statement is voluntary; in other words, whether it was not obtained by threat, duress or promise. If the Court is satisfied from the evidence that it was voluntary, then it is required to examine whether the statement is true. If the Court on examination of the evidence finds that the retracted confession is true, that part of the inculpatory portion could be relied upon to base conviction. However, the prudence and practice require that Court would seek assurance getting corroboration from other evidence adduced by the prosecution." We do not find even a whisper in the entire order, about the statement relied upon holding it to be true and voluntary. In our view the impugned order needs to be set aside on this ground itself. In view of specific retraction made by Shri Rajesh Kumar Goswami before the ACMM, before relying on his statement in view of the decision of the Apex Court referred above we are of the view that Commissioner or Enquiry Officer should have first tested the said statements as per the test laid down by the Apex Court and then relied u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ents of Regulations 11(d) and 11(e). He had advised the client as per his understanding of the law and procedure, and had exercised due diligence accordingly. In our view the only additional advice that he could have rendered in respect of the consignments imported and cleared under CTH 9503 could have been for complying with the requirements of ITC (HS) Import Policy, Condition No 2 for import of goods under that heading. In case the said certificate was produced or insisted upon before clearance of the goods the entire case of misdeclaration/misclassification could have been averted. In our view revocation of licence for that would be too harsh a punishment for the same when Custom officers also have not insisted for the same. The forfeiture of security deposit for the same would have been adequate taking into account the fact that goods sought to be cleared, were "blank guns" which could have been modified into lethal weapons jeopardizing the National Security and the security of individuals. 4.13 Similar view has been expressed by the Hon'ble Delhi High Court in the case of Ashiana Cargo Services [2014 (302) ELT 161 (Del)] as follows: "11.Viewing these cases, in the....