TaxTMI 
TaxTMI 
2023 (1) TMI 353
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....pellant and some importers by DRI, DZU, Delhi, alleging under valuation of imported goods i.e. power tools of Dongcheng brand and other Chinese brand through various ports by certain importers controlled by Shri Yusuf Pardawala and Shri Sidharth Sharma. The appellant was alleged to have facilitated the import clearance work for those imported goods. The said show cause notice was served pursuant to the search operation dated 12.04.2017 at the premises (residential/official/godowns) of certain Mumbai and Hyderabad based importers including importers like M/s. Yuri Impex Pvt. Ltd., M/s. Yuri International and M/s. Ray Exim India Pvt. Ltd. Those all were found to be operated by one Shri Yusuf Pardawala s/o Mohammad Hussain Pardawala. During search, electronic devices including threeiphone 7, one Coolpad, two Seagate Internal Hard Drives and one Apple Mcbook were resumed from the premises of Shri Yusuf Pardawala which were got forensically examined. The documents recovered from the e-mail of Shri Yusuf Pardawala were found containing actual invoices/packing lists/sales appendix forms in relation to certain other companies i.e. M/s. Maggie Marketing Pvt. Lt....
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....chnologies, M/s. Honeywell Tradelinks Pvt. Ltd. and M/s. Emrick Distributors were used by the CHA/appellant for clearance of impugned consignments for some monetary consideration on commission basis. It was also alleged that despite being the CHA, appellant was required to verify the IEC used for clearance of imported consignments related to Shri Yusuf Pardawala. In spite of being well aware of the fact that the IEC of these firms was used for name sake only, the CB had facilitated the customs clearance for the imported consignments related to Shri Yusuf Pardawala thereby violating the provisions of Customs Broker Licensing Regulations, 2018. Accordingly, a Show Cause Notice No. 13/2019 dated 22.05.2019 was issued by Commissioner of Customs (Airport & General), Delhi to be served upon the appellant, proposing the revocation of his CB license for the said violation. The said proposal has been confirmed vide Order-in-Original No. 111/2019 dated 13.11.2019. Vide the said order the appellant's license has been revoked on the grounds of violation of Regulations 10(a), 10(d) and 10(n) of Customs Broker Licensing Regulations (hereinafter referred as CBLR), 20....
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.....T. 257 (S.C.) 3.1 While submitting upon the merits, it is mentioned by learned Counsel for the appellant that the appellant has always conducted his business of being a customs broker by adhering to the provisions of customs act and the rules and regulation framed thereunder. He has fulfilled all requirements under CBLR and there is no case for revocation of his license. It is submitted that initially the license of the appellant was suspended in terms of Regulation 16 of CBLR, 2018. However, the said suspension was revoked vide Order-in-Original No. 56/2019 dated 24.04.2019. Learned Counsel emphasized that the grounds which led to the revocation of the suspension order are applicable to present show cause notice also. Those grounds were rather binding on the original adjudicating authority as well but the authority has ignored those grounds. The investigation has been held as barred by time vide the said order dated 24.04.2019 while revoking the order suspending the license of CHA. The CBEC Circular dated 08.04.2010 has been made the basis of the said order of revocation. It is further impressed upon that the proviso to Regulatio....
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....hing but an afterthought to misguide as has been rightly observed by the adjudicating authority below. The impugned order is impressed upon to have been based on the meticulous evidence in the form of documents recovered during search, retrieved from the gadgets recovered during search and in the form of statement of all concerned acknowledging their involvement. It is mentioned that Show Cause Notice dated 23.05.2019 is well within 90 days of receiving offence report in Delhi Commissionerate on 25.02.2019. The action taken cannot be said to have been hit by time bar of Regulation 17 of CBLR, 2018. It is also mentioned that proceedings for revocation of license are independent of proceedings for suspension of license under Regulation 16 of CBLR, 2018. The procedure under Regulation 17 of CBLR, 2018 can still continue even if the order suspending CHA license has been revoked. Learned DR relied upon the decision of M/s. Green View Logistics Vs. Commissioner of Customs (Airport & General), Delhi reported as 2021 (9) TMI 258 (Tri.-Del.). 4.1 Learned DR further mentioned that there is sufficient evidence that Appellant/Customs Broker has fail....
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....he license or impose penalty requiring the said Customs Broker to submit within thirty days to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defense and also to specify in the said statement whether the Customs Broker desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs. (2) The Commissioner of Customs may, on receipt of the written statement from the Customs Broker, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, to inquire into the grounds which are not admitted by the Customs Broker. (3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall, in the course of inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material to the inquiry in regard to the grounds forming the basis of the proceedings, and he may also put any question to any person tendering evidence for or a....
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....at where an order is passed against an F card holder, he shall surrender the photo identity card issued in Form F forthwith to the Deputy Commissioner of Customs or Assistant Commissioner of Customs. (9) Where in an offence report, charges have been framed against an F card holder in addition to the Customs Broker who has been issued a license under regulation 7, then procedure prescribed in regulations 16 and 17 shall be followed mutatis mutandis in so far as the prescribed procedure is relevant to the F card holder: Provided that where any action is contemplated against a G card holder alone under these regulations, then instead of authority referred to in sub-regulation (8), a Deputy Commissioner or Assistant Commissioner rank officer shall pass such order as mentioned in the said sub-regulation along with debarring such G card holder from transacting the business under these regulations for a period of six months from such order. Provided further that where an order is passed against a G card holder, then he shall surrender the photo identity card issued in Form G forthwith to the Deputy Commissioner of Customs or Assistant Commissio....
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....ing a particular act is prescribed under any Statute, the act must be done in that manner or not at all. The origin of this rule is traceable to the decision in Taylor v. Taylor (1875) 1 Ch.D 426 which was followed by Lord Roche in Nazir Ahmad v. King Emperor 63 Indian Appeals 372 = AIR 1936 PC 253 who stated as under: "Where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all." 6.3 Also, the use of the language "shall" in the regulation cannot be termed as "directory" as one of the consequence of the action is the revocation of the licence and it would also pave way for inaction by the officials breeding corruption. The law in this respect has been settled by Hon'ble Apex Court in Sharif-Ud-Din Vs. Abdul Gani Lone [AIR 1980 SC 303], by holding that the question whether a provision of law is mandatory or not depends upon its language, the context in which it is enacted and its object. The Court made an important observation as follows: "In order to find out the true character of the legislation, the Court has to ascertain the object which the provision of law in question is to subserve and its desig....
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....ions 17(1) prescribes a time limit of 90 days from the date of receipt of offence report within which action is to be initiated i.e. for issuance of Show Cause Notice to Customs Broker who has to file his defense within 30 days of receipt of said Show Cause Notice. 6.5 The appellants have also brought to the notice a circular bearing No.9/2010-Customs, dated 8-4-2010, issued by the Central Board of Excise and Customs, about clarification on procedures in issuance of notices to the CHAs and the time limit for completion of suspension proceedings against CHA/licensee in terms of Regulation 17 of CBLR, 2018 (the then Regulation 22) in para 7.1 thereof which reads as follows: 7.1 The present procedure prescribed for completion of regular suspension proceedings takes a long time since it involves inquiry proceedings, and there is no time limit prescribed for completion of such proceedings. Hence, it has been decided by the Board to prescribe an overall time limit of nine months from the date of receipt of offence report, by prescribing time limits at various stage of issue of show cause notice, submission of inquiry report by the Deputy Commissioner of Customs or....
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....wing from a statutory provision is never an evil. A Court has no power to ignore the provision to relieve what it considers a distress resulting from its operation." (See: The Martin Burn Ltd v. The Corporation of Calcutta, AIR 166 SC 529; and Rohitas Kumar & Ors. v. Om Prakash Sharma & Ors. AIR 2013 SC 30). In view of the above, we are of the candid view that none of the submissions advanced on behalf of the appellants is tenable." 6.7 Reverting to the facts of the present case, we observe that DRI proceeded based on the information about certain undervalued imports and conducted search at various premises of different importers based in Mumbai and Hyderabad on 12.04.2017. The goods recovered during those search were seized on 22.06.2017. But the requisite show cause notice could not be issued within six months, the time prescribed by the statute for the purpose. However, a show cause notice praying time extension under Section 110(2) of Customs Act, 1962 was issued on 06.10.2017 and the time was extended vide Order-in-Original dated 11.10.2017. It is thereafter that DRI issued a Show Cause Notice bearing No. 68/2018 dated 11.04.2018 to the C....
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....ssion, we hold that findings about proceedings being barred by time have already attained finality. The statute i.e. CBLR, 2018 is prescribing the time limit which is otherwise mandatory unless there is a gross abuse of process of law by the alleged defaulter and there is utmost bona fide and diligence on the part of the officers proceeding against the said alleged defaulter. Resultantly, the first issue as framed above is decided in affirmative holding that the timeline of Regulations is mandatory to be followed and Commissioner (Customs), Delhi has duly followed the same. Thus impugned show cause notice dated 23.05.2019 issued against the appellant is well within time. 7. Findings with respect to the Issue No.2 as framed above: Learned Counsel for the appellant on this issue had submitted that once the suspension of Customs Broker License of the appellant was revoked vide order dated 22.04.2019 under Regulation 16(2) of CBLR, 2018, the Commissioner could not have proceeded under Regulation 17 of CBLR, 2018 for revocation of the license. It is impressed upon that while following Regulation 16 of CBLR, 2018, the Commissioner could ....
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.... misconduct, whether within his jurisdiction or anywhere else which in the opinion of the Principal Commissioner or Commissioner of Customs renders him unfit to transact any business in the Customs Station; (d) adjudicated as an insolvent; (e) of unsound mind; and (f) Convicted by a competent court for an offence involving moral turpitude or otherwise. 7.2 The bare perusal of these regulations makes it clear that Regulation 14 of CBLR, 2018 deals with revocation of license or imposition of penalty. It provides that the Commissioner of Customs may, in accordance with the procedure as given in regulation 17, revoke the license of the Customs Broker and pass an order for forfeiture of part or whole of security on the grounds mentioned in the said regulation. Regulation 16 thereof deals with suspension of license. It provides that notwithstanding anything contained in regulation 14, the Commissioner of Customs, where an inquiry against the Customs Broker is pending or contemplated, may, in cases where immediate action is necessary, suspend the license of a Customs Broker. It also provides that in such a situation where the license has ....
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....ed under Regulation 17 of CBLR, 2018. Hence, the contention of appellant is not sustainable and we hold that irrespective of the order of revocation of suspension of appellants license the proceedings for revocation under Regulation 17 of CBLR, 2018 thereof have rightly been continued against him. With these observations the Issue No. 2 is decided in negative holding that the findings recorded under Regulation 16(2) of CBLR, 2018 cannot in any manner have any bearing on the findings recorded under Regulation 17. We draw our support from the decision of the Principal Bench of this Tribunal in the case of M/s. Green View Logistics Vs. Commissioner, Customs (Airport & General)-New Delhi reported as 2021 (9) TMI 258 - CESTAT NEW DELHI. 8. Findings with respect to the Issue No.3 framed as above: We observe that the basic allegation against the appellant/Customs Broker are that he was in connivance with Shri Yusuf Pardawala, the beneficiary of imported goods and Shri Sidharth Sharma, the Director of three importing firms and was very much aware that the Bills of Entry for clearanceof consignments were filed for the companies controlled by Shri Sidharth S....
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....t Shri Yusuf Pardawala in his statement has acknowledged that Shri Sidharth Sharma offered his companies for import of various goods of Shri Yusuf Pardawala on commission basis. Shri Yusuf Pardawala had assured Shri Sidharth Sharma to give him continuous work in the form of future shipments of power tools/grinding wheels on 2% commission basis. Thus it is clear that appellant/Customs Broker has facilitated customs clearance in the name of such companies which were having valid IEC of goods imported by the owner of these companies. He had facilitated clearance of goods imported by companies, Shri Sidharth Sharma who only had duly authorized the appellant for the same. Hence, it is clear that appellant ha valit authorization to act on behalf of the companies in whose names appellant filed the Bills of Entry. The alleged arrangement apparently and admittedly is between the importer and the beneficial importer for some commission to the importing firm, the appellant Customs Broker cannot be held liable for the same. However for alleged under valuation of imported goods the importer as well as the beneficial importer both can be prosecuted by the depa....
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....Pardawala prior filing the Bills of Entry for the same, however, in the companies of Shri Sidharth Sharma and it has been relied upon by the adjudicating authority. But we observe that the cross-examination of Shri Sidharth Sharma and the statement of Shri Pankaj Singh has totally been ignored by the adjudicating authority. 8.2.3 Shri Sidharth Sharma, in his cross-examination dated 10.08.2019, has specifically stated that he used to send his staff along with the import documents to ICS Cargo after informing the same telephonically to Shri Suresh K. Aggrawal/the appellant. This particular deposition falsifies the statement that the import documents used to be received by the appellant through Shri Yusuf Pardawala directly. Shri Sidharth Sharma has further deposed, while being cross-examined, that he only used to send his own transport for taking delivery of goods. This deposition falsifies that appellant used to directly deliver the imported goods to Shri Yusuf Pardawala premises. The subsequent deposition during crossexamination that all goods imported in his companies belong to him (Shri Sidharth Sharma) and that he only used....
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....t for Shri Yusuf Pardawala. 8.2.6 In the given circumstance, we do not find any reason with the appellant to be aware of the arrangement between Shri Sidharth Sharma and Shri Yusuf Pardawala and Shri Pankaj Singh and as such he had no reason to advice in this respect to the importer about provisions of the applicable acts, rules and regulations. Once nothing was to his notice there was no reason with the appellant to bring anything to the notice of the competent officer as was the requirement of regulation 10(d). Hence we hold that violation of 10(d) of CBLR, 2018 has wrongly been confirmed against the appellant. 8.3 The violation of Regulation 10(n). Regulation 10(n) reads as follows: 10(n) 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; 8.3.1 We observe that there is no allegation of the department that the IEC (Importer Exporter Code) for the importers in whose name the B....
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....it is crystal clear that the CHA herein had played his role diligently. The only allegation otherwise about the imported goods is that of under valuation thereof. Appellant is not a valuation expert and had played no role in the under valuation of the goods. To our opinion appellant acted purely on the basis of documents as that of invoice/purchase orders supplied by the importers. Sole allegation that the documents with respect to import of power tools were directly supplied by Shri Yusuf Pardawala to the appellant are highly insufficient to be a cogent evidence of alleged connivance of the appellant with either Shri Yusuf Pardawala or with Shri Sidharth Sharma or with both. Otherwise also, this allegation stand rebutted by the statement of Shri Pankaj Singh who acknowledged to have received the documents from Yusuf Pardawala and he delivered those to the appellant. 8.3.4 As already observed above that the cross examination of Shri Sidharth Sharma has not been taken into consideration by the adjudicating authority below. We hold that the Commissioner has wrongly concluded that there is no evidence to r....
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....dawala were facilitated by the appellant/CB. On the contrary, there is sufficient admission of Shri Sidharth Sharma, while being cross-examined, that he only used to arrange his vehicles for transporting the imported goods to respective places. Shri Sidharth Sharma has willingly provided his IEC on M/s. Maggie Marketing Pvt. Ltd. for use of imports to Shri Yusuf Pardawala and in fact, till the date of imports no remittances used to be sent by Shri Yusuf Pardawala to Shri Sidharth Sharma because Shri Yusuf Pardawala actually used to purchase those shipments on credit basis and used to make the payments of those imported goods in favour of M/s. Maggie Marketing Pvt. Ltd. of Shri Sidharth Sharma and it was thereafter that Shri Siddharth Sharma used to make the remittances for those shipments. Apparently and admittedly, no Bill of Entry has been filed by appellant in name of any company of Shri Yusuf Pardawala. 8.3.6 These particular admissions which received due corroboration, are sufficient for us to hold that there was no role of appellant/CB in the mutual arrangement between Shri Sidharth Shama and Mr. Yusuf Pardaw....
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....rted were meant for someone else but for certain commission to the importer itself and there is no evidence of knowledge of this arrangement between the two with Customs Broker, the appellant. 10. In the case of M/s. Sriaanshu LogisticsVs. Commissioner of Customs, New Delhi reported as 2019 (369) E.L.T. 1431 (Tri. Delhi) there was an apparent admission of customs broker that he filled the Bill of Entry in respect of the consignments but had never met the IEC holder/owner of the importing firms. In the present case, it is not even the allegation of the department that appellant/CHA was not in touch with his importer client, Shri Siddharth Sharma for whose company appellant facilitated the customs clearance. 11. In the case of D.M. Mehta & Bros. Vs. Commissioner of Customs (General), Mumbai reported as 2017 (346) E.L.T 477 (Tri.-Mumbai), the persons employed by the CHA used to bring all papers such as invoice bill of lading, warehousing certificates etc. and used to give those documents to the CHA who himself had never met any of those importers and who failed to produce both of those persons during investigation even in his defense. Apparent....