TaxTMI 
TaxTMI 
2022 (3) TMI 287
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....ping bill had been filed by Customs House Agent / Customs Broker namely M/s.R.S.Arunachalam. The goods declared were 117 bales of Polyester Lady Lungies, Polyester Saree, Ladies In-Skirt and Ladies Nighty for export to M/s.NP Waja Resources at Malaysia. Pursuant to the intelligence, the containers were intercepted and examined. On opening the container and destuffing the goods, it was found that Red Sander Logs were found stacked up at the end of the container. 3. On verification of the IEC profile of M/s.A.B. Traders (the exporter as per shipping bill), it revealed that it is a proprietorship concern with Shri E. Stephen as proprietor with registered address at Ambattur, Chennai. Though the Customs officers visited the given address on 28.08.2017, it was found that no such company in the name of M/s. A.B Traders was found functioning in the given address and that no person by name Shri E.Stephen ever resided there. 4. As part of the investigation, statement was recorded from Smt.R.A. Vijayalakshmi, who is partner of M/s.R.S. Arunachalam, Customs Broker, Pammal, Chennai. In her voluntary statement given on 29.08.2017 under Section 108 of the Customs Act, 1962, inter alia, she....
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....enalty on Smt. R.A. Vijayalakshmi, Partner of M/s.R.S.Arunachalam, Customs Broker under Section 114 of the Customs Act, 1962 in view of my findings at para 52 of this Order. .... ......" 5. Against the above order of non-imposing penalty, the department filed appeal before the Commissioner (Appeals). After granting personal hearing to the respondents, the Commissioner (Appeals) vide orders impugned herein set aside the order passed by the original authority and remanded the matter for reconsideration of imposition of penalty. Aggrieved by such order, the appellants viz. M/s.R.S. Arunachalam and Smt. R.A. Vijayalakshmi are now before this Tribunal. 6. The Ld. Counsel Shri K.S. Ramaswamy appeared and argued for the appellants. He opened his argument adverting to para-52 of the OIO and argued that the original authority has categorically held that there is no evidence to prove that the customs broker had actively abetted the exporter in the illegal export of red sanders. 7. The adjudicating authority after appreciating the evidence has found that Mr. E.Stephen, Proprietor of M/s.A.B. Traders was the mastermind in the smuggling operations. Ld. Counsel adverted to para....
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....ell conspired plan was hatched by Shri E.Stephen, Proprietor of M/s.A.B.Traders, to illegally export red sanders with the active collusion of Shri Karthick and Shri K.Rajesh and substituted the customs sealed containerised cargo with red sanders enroute to Port. Shri E.Stephen was actively abetted by Shri P.Suresh of M/s.Bro Logistics in filing of the shipping documents and customs clearance with the illegal use of user id and password of the Customs Broker M/s.R.S.Arunachalam. The entire operation would have gone unnoticed had not the DRI intercepted the container on the basis of specific information about the smuggling. Thus, the role of the exporter, its Proprietor Shri E.Stephen, Shri Karthick and Shri K.Rajesh is very clear and substantial in the smuggling operation. I observe that the export of Red Sanders is prohibited in India in terms of Sl.No.188 of Schedule 2 (Export Policy) of ITC (HS) Classification of Import and Export items issued under the provisions of Foreign Trade (Development & Regulation) Act, 1992. Therefore, for the reason of attempted illegal export, the 277 Nos of Red sander logs totally weighing 8.420 MT valued at Rs. 3,36,80,000/- is liable for confiscati....
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....Customs Broker Licensing Regulations (CBLR), 2013 only. Without any evidence to establish the abetment for attempt of illegal export, the appellants cannot be penalized under Section 114 of the Customs Act, 1962. The Ld. Counsel adverted to relevant finding of the adjudicating authority in para-52 which is reproduced as under : "52. Coming to the role played by the Customs Broker, its Partner Smt.R.A.Vijayalakshmi, I find that the Customs Broker M/s.R.S.Arunachalam, had lent their digital user-id and password to M/s.Bro Logistics to file shipping bills for a monetary consideration. Shri R.A.Vijayalakshmi, Partner of M/s.R.S.Arunachalam had given a statement that they knew about M/s.A.B.Traders only after the seizure of the consignment by DRI and the entire customs clearance relating to this consignment of red sanders was carried out by Shri P.Suresh of M/s.Bro Logistics; that they obtained Customs Card for persons who are not their employees that she signed the blank annexures and handed over to M/s.Bro Logistics. In their reply to the show cause notice and during the personal hearing, the Customs broker had contended that the KYC documents of M/s.AB Traders are genuine an....
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....is not liable for penalty under Sec.114 of the Customs Act, 1962. In view of this finding, penalty is also not imposable on Smt.R.A.Vijayalakshmi, Partner, M/s.R.S.Arunachalam under Sec.114 of the Customs Act, 1962. However, the Customs Broker and its Partner are liable for penal action, to be decided by the competent authority, under the Customs Broker Licensing Regulations 2013 for their failure to discharge the duties as a Customs Broker under the provisions of the said Regulations." 11. To support the above arguments, Ld. Counsel relied upon the decision of the Tribunal in the case of Kailash Bahiru Jadhav Vs CC (Export) - 2019 (7) TMI 1061- CESTAT Mumbai as well as the decision in the case of Calimaa World Logistics Pvt. Ltd. Vs CC Tuticorin - 2019 (9) TMI 1220 - CESTAT Chennai. He prayed that the appeals may be allowed. 12. Ld. A.R Shri R. Rajaraman appeared and argued for the department. He adverted to the discussions made in para-7 of the order passed by the Commissioner (Appeals). It is submitted by him, that the appellant, Smt. R.A. Vijayalakshmi has admitted that she has lent digital ID and password of their customs broker firm to M/s. Bro Logistics for filing ship....
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....der the Regulations for any violation or contravention. He prayed that the appeals may be dismissed. 15. Heard both sides. 16. At the outset, it has to be stated that on perusal of the order passed by the adjudicating authority, it is seen that the adjudicating authority has taken the view that leasing the User ID and Password of a Customs Broker can be considered as violation under CBLR, 2013 only. It is held that for such violation the Customs Broker cannot be held to have abetted in the attempt to smuggle red sanders. The relevant para-52 of the order of the adjudicating authority has already been reproduced above. 17. Against this, the department filed appeal before the Commissioner (Appeals). The decision in the case of K.V. Prabhakaran Vs CC Chennai (supra) has been relied by the Commissioner (Appeals) to arrive at the conclusion that the matter has to be remanded to the original authority for reconsidering the issue of imposing penalty under Section 114 of the Act ibid. The Section 114 reads as under : "SECTION 114. Penalty for attempt to export goods improperly, etc. - Any person who, in relation to any goods, does or omits to do any act which act....
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....ing of shipping bill along with declaration and necessary documents, the exporter usually engages a Customs Broker. The officers of the Customs place much trust on the Customs Brokers. In the present case, as per records, though the Shipping Bill is seen to have been filed by the appellants, they plead ignorance of the entire transaction. The appellants have lent their Customs Broker's Digital ID and Password to M/s.Bro Logistics for filing the shipping bill. It has also come out from the voluntary statement given by Smt. R.A. Vijayalakshmi that they have lent out their Customs Broker digital ID and password for a monetary consideration of Rs. 10,000/- per month. 19. A Custom Broker is supposed to safeguard the interests of both exporters and the Customs. It is not possible to manage the huge volume of transactions in each port without some trust on the Customs Broker by the officers of Customs. Any act facilitating an attempt for export of prohibited goods would fall under Section 114 of the Act, ibid. The Ld. Counsel for appellants has relied upon the decision in the case of Kailash Bahiru Jadhav Vs CC (Export) (supra) to argue that the violation if any would fall only under C....
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....s filed without obtaining the authorization or documents directly from the importer. The facts reveal that on examination of the consignment, it was noticed that there were goods which did not fit in the description of the declared goods. The Customs Broker cannot be said to be aware of the kind of goods shipped by the foreign supplier. The facts are not similar to the situation in the present case and therefore the said decision is of no support to the appellants. 22. Ld. A.R has relied upon the recent judgment of Hon'ble Jurisdictional High Court in the case of Rama Thenna Thaylan (supra). The very same issue on identical set of facts had come up before the Hon'ble jurisdictional High Court. From Para-4 of the said judgment, the facts reveal that Customs House Agent had handed over blank annexures to be used for filing the shipping bill. The Hon'ble High Court held that mere admission itself is sufficient to hold that the Customs Broker was reckless and negligent in using his license. The substantial question of law framed and considered by the Hon'ble Court in C.M.As (MD) No. 917 of 2014 which is seen filed by the Customs broker is reproduced as under : "3. Whether t....