TaxTMI 
TaxTMI 
2023 (2) TMI 677
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....IB/Swastik/37/2017/8687-88 dated 27.09.2017 informed that a case of fraudulent export against M/s Shagun Overseas, M/s Fine Art Traders and M/s S. K. Exports under various shipping bills is being investigated under the provisions of the Customs Act, 1962. The shipping bills in all these cases were filed through CHA - M/s Swastik Cargo Agency, the appellant. Under search authorisation No. 341/2017 dated 21.09.2017 issued by the Assistant Commissioner of Customs (Prev.), New Customs House, New Delhi search was conducted at the office address, i.e. B-2/173, Safdarjung Enclave, New Delhi. That, no office of Customs Broker (CB) was found at the given address. The Partner of CB, namely Smt. Madhulika Rastogi was contacted on the mobile number given by Sh. Mohit Kapur, a resident of 2nd Floor of the same premises. However, she refused to divulge her residential address and told the search team to reach her Chartered Accountant‟s Office in Bhikaji Cama Place, New Delhi. Statement of Sh. Rajesh Kumar, Chartered Accountant was recorded under Section 108 of the Customs Act, 1962 who informed that the office address of the CB was under construction for past 1½ years and she occasi....
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....ere G-card holder of Delhi Customs. viii. Digital Signature Device (electronic device "Dongle‟) issued to Nidhi Rastogi by the Customs remained with Jai Kumar Sharma; ix. During re-construction phase of her office address, customs related work was carried out by Sh. Jai Kumar Sharma and Ashok Bhutani from their respective homes; x. They merely provided shipping bills/ bills of entry detail in the office of Sh. Rajesh Kumar, C.A.; xi. There was no office of M/s Swastik Cargo Agency at B2/173, Safdarjung Enclave, New Delhi-29 from May 2016 onwards till date; xii. KYC documents were verified by Jai Kumar Sharma and kept in his custody; xiii. Work of exporters M/s Shagun Overseas, M/s Fine Art Traders and M/s S. K. Exports was brought by Jai Kumar Sharma but no payment was received for above work by the firm; xiv. Number of shipping bills filed at Dadri Port by M/s Swastik Cargo Agency, cleared for export and payment received in lieu of them can only be provided by Jai Kumar Sharma. xv. She had carefully gone through the statements of Jai Kumar Sharma tendered under Section 108 of the Customs Act, 1962 on 30.....
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....; on being asked whether they were monitoring the export process at Startrack Port, ICD-Dadri in respect of above said exporter, it was inter alia stated that the work at Dadri was being supervised by forwarding agent Sahib Ji Freight Movers and his employee Sh. Harish Chandra who applied for issuance of G-Card for ICD-Dadri on the license of M/s Swastik Cargo Agency, however, the G-Card was not issued to Sh. Harish; that he used to go to Dadri whenever consignment of M/s S. K. Exports and M/s Fine Art Traders; on being asked whether they were aware about the goods being exported under the shipping bills filed by the above said exporter, it was interalia stated that as already stated they filed papers on the basis of the documents received from Sh. Abhishek; that carting and other work was supervised by Sh. Abhishek. If required, he went for examination and other customs work; that the payment in respect of the paper filed by the above said exporter was to be received from M/s Sahib Ji Freight Movers, as they were not directly in touch with the exporters. 7. Further, statement of Sh. Jai Kumar Sharma, G-Card holder was recorded on 30.11.2017 wherein he submitted that he was not ....
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....he shipping bills filed by the CB for the aforesaid three exporters and over Rs. 70 lakh drawback was claimed by the exporters in the shipping bills filed through CB herein. 11. The aforesaid report was considered in extenso by the Commissioner of Customs and vide order dated 15.02.2018, he suspended the Custom Broker License with immediate effect, granting opportunity under regulation 19(2) of CBLR,2013 to the CB or their authorised representative to appear for post decisional hearing on 20.02.2018. Accordingly, the case was examined under regulation 19(2) and after examining the statements recorded under section 108 of the Customs Act and the submissions made by the CB, order dated 12.03.2018 was passed whereby the order of suspension dated 15.02.2018 was confirmed. 12. From the investigation, it was clear that CB has failed to fulfil the obligation cast upon him under the CBLR, 2013. Accordingly, a show cause notice No. 12/MK/POLICY/2018 dated 07.05.2018 was issued to the CB. The Commissioner of Customs in exercise of his powers under Regulation 18 and 20(7) of CBLR, 2013 vide Order No. 57/MK/Revocation/Policy/2018 dated 18.10.2018 considered the entire record including th....
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....Wilmar Ltd., vs. Commissioner of Customs (Prev.) Jamnagar -2015 (330) ELT 549 (vii) V. Esakia Pillai vs. Commissioner of Customs, Chennai -2001 (138) ELT 802, (viii) Him Logistics Pvt. Ltd., vs. Commissioner of Customs, New Delhi -2016 (338) ELT 725 (Tri. Del.) (ix) Commissioner of Customs vs. Him Logistics Pvt. Ltd., -2017 (348) ELT 625 (Del.) are of no avail to the appellant as the same are distinguishable with reference to the facts of the present case. 14. As per contra, learned Authorised Representative submitted that the show cause notice is not time barred as the limitation to issue the show cause notice starts from the date of receipt of the offence report and which in the present case is proper. According to him, the license in the present case was virtually sublet to the G-Card holder in India who connived with the forwarder Sh. Abhishek Saxena of M/s Sahid Ji Freight Movers. He emphasised that authorisation was illegal as the export documents were filed without receiving the same from the authorised representative of the exporters. The question of advising their client as per the provisions of CBLR, 2013 does not arise as the exporter was not known to the CB and they ....
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....venue having revoked the suspension of the license did not issue the SCN under Regulation 20 of CBLR, 2013 and thereafter once again initiated the process so as to safeguard the limitation period which is violative of Article 20(2) of the Constitution of India. The learned counsel has also relied on the Circular No. 09/2010 dated 8.4.2010, particularly with reference to para 7.2 which states that the offence report has to be submitted within 30 days of detection of the offence. Para 7.2 reads as under: "7.2 Further, Board has also prescribed certain time limits in cases warranting immediate suspension under Regulation 20(2). Accordingly, the investigating authority shall furnish its report to the Commissioner of Customs who had issued the CHA license (Licensing authority), within thirty days of the detection of an offence." 19. The ld. Counsel for the appellant further argued that the offence was detected on 12.09.2017 when the case was booked against the exporters but the offence report was issued on 25.01.2018 after a lapse of more than four months. Before adverting to consider the above argument, it is necessary to quote the provisions of Regulations 18, 19 and 20 of....
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....ort, stating the grounds on which it is proposed to revoke the licence 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 ....
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....he right to carry on any trade or profession as guaranteed by the Constitution of India. The relevant paras of the above noted judgement are quoted: "6.1 Upon perusal of the above regulation, it can be seen that an independent right has been vested with the Commissioner of Customs to initiate action de hors the enquiry under Customs Broker License Regulations and the Customs Act against the Customs Broker (CB) licensed in his jurisdiction. The regulation does not only contemplate action against the erring Brokers but also contemplates a timely action. Hence, the action which has to be initiated against the erring brokers, the same has to be in strict compliance with the said provision as laid down by this Court in the case of M/s Kamatchi Agencies vs. Commissioner of Customs, Chennai reported as 2001 (129) ELT 29 (Mad.)., the law of limitation is common to both the parties. The provision not only enables the Commissioner to levy penalty, but also empowers him to revoke the license of Customs Broker, which is an extreme step curtailing the right to carry on any trade or profession as guaranteed by the Constitution of India. To our opinion, the object behind such a provision....
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....ns framed thereunder. The case was considered by the Commissioner Customs vide OIO No 66 dated 27.10.2017 and in accordance with the provisions of Regulation 19(2) he revoked the order of suspension holding that no concrete evidence against the said CB has been brought on record to establish the contravention of provisions of CBLR, 2013, however, he was pleased to observe that, "on later stage during the investigations, if new facts emerges/ established, actions in terms of provisions of CBLR, 2013". 23. In this context the argument of the learned counsel for the appellant that after the passing of the aforesaid order of revocation of suspension no further proceedings could have been initiated is not supported by the scheme of the Regulations inasmuch as Regulation 19 of CBLR, 2013, which deals with suspension of licence is independent of the order which may be passed under Regulation 18 read with Regulation 20 which provides for revocation of license or imposition of penalty and procedure thereof. Moreover, Regulation 19 starts with a non-obstante clause, i.e. "Notwithstanding anything contained in regulation 18", therefore there is no bar for an action under Regulation 19. The....
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.... grounds forming the basis of the proceedings, and he may also put any question to any person tendering evidence for or against Customs Brokers, for the purpose of ascertaining the correct position. The Customs Broker is also entitled to cross examine the persons examined and at the conclusion of the inquiry, the Deputy Commissioner has to prepare a report of the inquiry and after recording his findings thereon submit it to the Commissioner. The Commissioner thereafter has to furnish to the Customs Broker a copy of the report of the Deputy Commissioner and require the Customs Broker to submit within the specified period any representation that he may wish to make against the said report. It is on a consideration of the report submitted by the Deputy Commissioner and the representation made by the Customs Broker that the Commissioner is required to pass an order either revoking the suspension of the license or revoking the license. In this view of the matter, the findings recorded under regulation 16(2) cannot in any manner have any bearing on the findings recorded under regulation 17".) this Tribunal held that both the provisions 24. Further, in the case of ICS Cargo (referred a....
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....toms (Airport & General)-New Delhi reported as 2021 (9) TMI 258 - CESTAT NEW DELHI." 25. In the present case, it is evident that after further investigation in accordance with the provisions of Regulation 20 of CBLR 2013, the Commissioner of Customs, Noida, vide letter dated 25.01.18 sent the Offence Report dated 19.01 .2018 which was received by the Commissioner of Customs, New Delhi on 09.02.2018. The subject of the said report, specifically stated, "Role of Customs Broker, Swastik Cargo Agency in fraudulent exports and investigations against M/s Shagun overseas, M/s Fine Art Traders and M/s S. K. Exports." After the receipt of the Offence Report on 09.02.2018, the show cause notice issued on 07.05.2018, was issued within the time limit of 90 days as prescribed under Regulation 20(1) and hence there is no delay and the show cause notice is not barred by limitation. 26. The plea of issuing two SCNs or that the license cannot be suspended or revoked twice on same issues does not survive as the action under Regulation 19 has to be taken immediately to restrain the CB from functioning. On receipt of the information on 27.09.2017, the order of suspension was passed immediately o....
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.... "The CHA occupies a very important position in the Customs House. The Customs procedures are complicated. The importers have to deal with a multiplicity of agencies viz. carriers, custodians like BPT as well as the Customs. The importer would find it impossible to clear his goods through these agencies without wasting valuable energy and time. The CHA is supposed to safeguard the interests of both the importers and the Customs. A lot of trust is kept in CHA by the importers/ exporters as well as by the Government Agencies. To ensure appropriate discharge of such trust, the relevant regulations are framed. Regulation 14 of the CHA Licensing Regulations lists out obligations of the CHA. Any contravention of such obligations even without intent would be sufficient to invite upon the CHA the punishment listed in the Regulations...." We approve the aforesaid observations of the CEGAT, West Zonal Bench, Mumbai and unhesitatingly hold that this misconduct has to be seriously viewed." 29. Similarly, the view taken by the High Court of Madras, in Sri Kamakshi Agency Vs Commissioner of Customs, Madras -2001 (129) ELT 29 it has been held that: "the grant of licence t....
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....rious Governmental authorities for KYC, it is equally true that the Customs Broker is expected to act with great sense of responsibility and take care of the interests of both the client and the Revenue. It is expected to advise the client to follow the laws and if the client is not complying, it is obligated under the Regulations to report to the Assistant Commissioner or Deputy Commissioner. Fulfilling such obligations is a necessary condition for the CB licence and it cannot be termed as "spying for the department‟ as argued by the appellant before us. It has also been argued that if it spies for the department, it will lose its business. It is evident from the facts of this case, that the appellant was not only aware of the benami Bills of Entry but has actually filed them with the full knowledge that they were benami and they were filed by Anil after a case of undervaluation has been booked by DRI against him. It is afraid of losing business because it has built its business model on violators who, it does not want to upset by reporting to the department. Therefore, we find no reason to show any leniency towards the appellant. At any rate, once violation is noticed, it i....
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....s ever met any of the exporters who were actually farmers and have no knowledge about there being exporters. It is also an admitted position that the export assignments and the KYC documents were provided by Sh. Abhishek Saxena, Prop. of M/s Sahib Ji Freight Movers and the authorization was also from the said freight forwarder. In the circumstances, there is no scope for the CB to obtain authorization from the fictitious and non-existent exporters. Reliance is placed on the decision of this Tribunal in Millenium Express Cargo Pvt. Ltd., vs. Commissioner of Customs, New Delhi -2017 (346) ELT 471, where it has been observed that filing of Bill of Entry in the name of a non-existent importer is a grave offence on the part of CHA and it becomes graver when it turn out that CHA did not make minimum efforts to verify the genuineness of the importer and its address. Similarly, in the recent decision of this Tribunal in M/s Falcon India (supra), this Tribunal noted that the appellant in that case did not obtain the authorization from the Proprietor of M/s Popular Metal Industries but filed Bills of Entry using his IEC and obtained the documents from some Anil and filed the Bills o....
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....ts Proprietor as they had actually provided the export assignment and also the KYC documents. The CB completely failed to contact or verify the identity and functioning of their client which were found to be fictitious. The Calcutta High Court in Welcome Air Express Private Ltd., vs. Commissioner of Customs (Airport & Administration) 2022 (380) ELT 544 where a forwarding agent approached the CB to export goods and the authorization letter was not received directly from the exporter but from the freight forwarder, upheld the punishment for revocation of the CHA license. The CB has failed to comply with the provisions of Regulation 11(n) of CBLR, 2013. (v) Regulation 11(o) reads as: (o) inform any change of postal address, telephone number, email etc. to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be within one month of such change. In the present case, it is also an admitted position that CB was not working from their declared office premises since May, 2016 and neither the Partners nor the employees were available there. The functional office address was not informed to the Department and even....
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....elf into the shoes of fraudsters who were using forged documents of fictitious persons who were actually not involved with the said fraudulent exports to claim duty drawbacks. The Apex Court in Commissioner of Customs Vs Aafloat Textiles (I) Pvt. Ltd , 2009 (235) ELT 587 on the principal that fraud and collusion vitiate even the most solemn proceedings in any civilised system of jurisprudence held that Special Import License were not genuine documents being fraudulently forged and hence had no existence in the eyes of law. 35. Reliance is placed on a recent decision of the Apex Court in Munjal Showa Ltd. Vs Commissioner of Customs & Central Excise CA No. 2576/2010 dated 23.09.2022 where DEPB licenses were forged and a fraud was played to avail the exemption benefit, it was observed: "16. In that view of the matter and on the principle that fraud vitiates everything and such forged or fake DEPB licences /Scripps are void ab initio, it cannot be said that the department acted illegally in invoking the extended period of limitation. In the facts and circumstances, the department was absolutely justified in invoking the extended period of limitation." 36. In view of the ....