TaxTMI 
TaxTMI 
2023 (6) TMI 322
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....the statement of several persons whose identity had been allegedly misused to secure 'importer exporter code (IEC)' numbers and claimed to have nothing to do with the consignments., those of the representatives, including the proprietor and manager, of the appellant herein had been relied upon to impose the detriments on the appellant, formed the basis for initiating proceedings mandated by regulation 17 of Customs House Broker Licensing Regulations, 2018. 2. Before proceeding to deal with the submissions, on merit and on procedure, preferred on behalf of the appellant by Learned Counsel, it may not be amiss to tarry awhile on the substantive distinction between penal proceedings arising directly from infringement of provisions of Customs Act, 1962 and that which is in pursuance of monitorial oversight of conduct of customs broker by the licencing authority. Unlike the former which are episodic, by impinging on a specific consignment without any consequence to future transactions of international trade, the livelihood of the broker and employees are in jeopardy on conclusion of proceedings under Customs House Broker Licensing Regulations, 2018 and, normally, as a fallout of the ....
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.... received through formal banking channels and that effecting such exports, nominally through holders of 'importer-exporter code (IEC)' numbers, enabled diversion of sale proceeds received from abroad. On the other hand, the primary submissions of the customs broker is that, as far as 'cut and polished diamonds' are concerned, their responsibility is restricted with the goods, in accordance with prevailing special procedure, are personally handed over to customs officers for assessment and that the time-lines in Customs House Broker Licensing Regulations, 2018, prescribed for completion of each stage of proceedings under regulation 17 therein, have not been adhered which remained untenable even within the framework laid down by the Hon'ble High Court of Bombay in Principal Commr. Of Cus. (General), Mumbai v. Unison Clearing P Ltd [2018 (361) ELT 321 (Bom). 7. The appellant herein has been charged, in show cause notice dated 17th August, 2021, with breach of regulation 10(a), 10(d), 10(e), 10(k), 10(m), 10(n) and regulation 13(11) of Customs Broker Licencing Regulations, 2018 which, in the enquiry report dated 27th January 2022, were held as proved by the designated officer nomina....
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....dress by using reliable, independent, authentic documents, data or information. 15.1 The defense submission stated that not even one IEC or GSTIN were fake; that every statutory document is genuine; that the identity and functioning of each exporter was verified by using reliable documents and the allegations based on statements, which were not tested in the inquiry, do not hold water; that denial of cross-examination on the ground that there is no retraction is illegal and unlawful; that retraction can never be a precondition for cross-examination. The Customs Broker relied on following judgements wherein it is held that cross- examination is mandatory: (1) Thakkar Shipping Agency-1994 (69) ELT 90 (Tribunal) (2) Smita International - 2008 (225) ELT 439 (Tribunal) (3) West End Shipping Agency - 2014 (302) ELT 94 (Tribunal) (4) Swadeshi Polytex Ltd. - 2000 (122) ELT 641 (SC); (5) Lakshman Export Ltd,-2002 (143) ELT 21 (SC); (6) Arya Abhushan Bhandar - 2002 (143) ELT 25 (SC); (7) Shalimar Rubber Industries- 2002 (146) ELT 248 (SC). 15.2 In this context, I place reliance on the decision of Hon'ble Hig....
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....iven information should be examined in the presence of the appellant or should be allowed to be cross-examined by them on the statements made before the Customs Authorities. Accordingly, I hold that there is no force in the third contention of the appellant." ii. In the case of Fortune Impex Vs. Commissioner of Customs, Calcutta [2001(138) E.L.T.556 (Tri. -Kolkata)], Hon'ble Tribunal observed at Para 12 that: "...it is not required that in each and every case, crossexamination should necessarily be allowed. There is no absolute right of cross-examination provided in the Customs Act. The Advocate had given a list of 26 persons for cross-examination without indicating the specific reasons for cross-examining the...it cannot be said that there was violation of principles of natural justice by not allowing the cross-examination of the persons sought by him." This view taken by the Tribunal has been affirmed by Hon'ble Supreme Court - 2004 (164) E.L.T. 4 (S.C.) & 2004 (167) E.L.T.A. 134 (S.C). 15.5 I find that the Inquiry Officer has recorded the reasons for denial of cross-examination in the Inquiry Report. Hence, the Inquiry Officer has rightly denie....
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....t or material to the enquiry 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 against the Customs House Agent, for the purpose of ascertaining the correct position. (4) The Customs House Agent shall be entitled to crossexamine the persons examined in support of the grounds forming the basis of the proceedings and where the Assistant Collector of Customs declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing." From this, therefore, it is very clear that for the purpose of making use of any oral evidence, in these proceedings, such evidence has to be recorded by the Enquiry Officer, and the person giving such oral evidence has to be offered to the delinquent for cross-examination. There does not exist any provision which authorises use of statement recorded vide Section 108 of the Customs Act as an evidence here. True, statement recorded vide Section 108 of the Customs Act, has been given some special status as to its acceptability in relation to the proceedings under the Customs Act but ther....
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....annot be relied upon in proceedings under the Customs House Agents Licensing Regulations, 2004, in the light of the ratio of the Tribunal's decision in Thakkar Shipping Agency v. CCE, Bombay [1994 (69) ELT 90], wherein it has been held that statement recorded under Sec. 108 of the Customs Act, 1962 cannot be used as evidence under CHALR and that recording of evidence and offering the persons for cross-examination is mandatory under Clauses 3 and 4 of the Regulation 23 of the CHALR, 1984 (the relevant provision is Regulation 22 of 2004 which is reproduced herein below and pari materia with the earlier Regulation 23 of the CHALR, 1984 Regulations :) "22. Procedure for suspending or revoking licence under Regulation 20 - (1) The Commissioner of Customs shall issue a notice in writing to the Customs House Agent stating the grounds on which it is proposed to suspend or revoke the licence and requiring the said Customs House Agent to submit, within such time as may be specified in the notice, not being less than forty-five days, to the Deputy Commissioner of Customs or Asstt. Commissioner of Customs nominated by him, a written statement of defence and also to specify in the said....
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....ntity of the exporters. 13. The want of diligence in doing so has been held against the customs broker herein by relying upon the admissions of several of the 'importer-exporter code (IEC)' holders that denied connection with the export consignments and, more particularly, on that of an employee of the appellant on the specifics of the verification undertaken by the customs broker. As the case revolves around beneficiary exporter, operating under the cover of entities existing on paper' and evidence of existence of such operator being hearsay, it was behoved the licensing authority to allow cross-examination rather than deny solely on the ground that the statements had not been retracted. It would appear that the licensing authority has not appreciated that cross-examination in the event of retraction is one way of restoring the contents of the statement which may benefit customs authorities and that, correspondingly, it is the lack of retraction that warrants test of veracity. Failure to place the request in this perspective discredits the denial of cross-examination on the part of the licensing authority. That, of itself, should suffice to nullify the proceedings but we must a....