AI Drafter 
TaxTMI 
TaxTMI 
2023 (11) TMI 115
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....t Mumbai, Ludhiana/Amritsar, Visakhapatnam, Noida and Kandla. It is brought out that the DRI [Directorate of Revenue Intelligence] conducted search operations on 12 April 2017 and 13 April 2017 at the premises of several importer companies viz. M/s. Yuri Impex Pvt. Ltd., M/s. Yuri International and M/s. Ray Exim India Pvt. Ltd., companies which were being run by one Mr. Yusuf Pardawala. The raids were conducted in relation to the import of various power tools from China, which were imported through several ports by the importers and allegedly undervalued. During the course of investigation, the statements of Mr. Yusuf Pardawala as also one Mr. Sidharth Sharma were recorded under Section 108 of the Act and certain documents viz, various invoices and packing lists besides emails of the importers were seized unraveling the modus operandi adopted by the importers. During the course of investigation, it was also revealed that there were 5 containers containing the goods which were undervalued, four at Navasehara and one at Sea Port, Kolkata, which were also seized. 3. It is the case of the appellant further that during the course of investigation, statement of one Mr. Suresh Kumar Ag....
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.... barred. It was further held that mere suspension of licence and later its revocation vide order dated 22 April, 2019 under Regulation 16 of the CBLR did not preclude the Commissioner (Appeal) from conducting an inquiry against the CB/CHA in terms of the powers under Regulation 14 and 17 of the CBLR for the reason that an action under Regulation 16 is immediate in nature depending upon the seriousness and gravity of the alleged offence whereas Regulation 17 prescribes a complete procedure for hearing the party concerned. 6. Coming to the last issue, learned CESTAT on appreciation of the evidence brought on record, found that the case of the appellant that respondent/CHA was in violation of regulation 10(a), 10(d) and 10(n) of CBLR was not made out, and consequently the impugned order as well as the penalty imposed were set aside. GROUNDS OF APPEAL: 7. The impugned order dated 06 January 2023 passed by the learned CESTAT has been assailed inter alia on the ground that the impugned order is arbitrary, perverse and violative in vestige fairness inasmuch as it ignored the fact that the retraction of admitted statement without any evidence of threat or coercion was not sustaina....
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....ed and eighty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period. (3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. (4) The appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question: PROVIDED that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question. (5) The High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decisions is founded and may award such cost as it deems fit. (6) The High Court may determine any issue which- (a) has not been determined by the Appellate Tribunal; or (b) has been wrongly determined by the Appellate Tribunal, by reason of a de....
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....drawn wrong inferences from proved facts by applying the law erroneously; or (iii) the courts have wrongly cast the burden of proof. When we refer to „decision based on no evidence‟, it not only refers to cases where there is a total dearth of evidence, but also refers to any case, where the evidence, taken as a whole, is not reasonably capable of supporting the finding." 11. Tested on the touchstone of the aforesaid legal principles, reverting back to the instant matter, it would be relevant to extract Regulation 10(a) of the CBLR, which reads as follows: Sec 10 (a) of the CBLR 2018 states that obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as a Customs Broker and produce such authorization whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; 12. On the said issue, learned CESTAT came to the following conclusions: "8.1.1 We observe that the Bills of Entry as were filed by the appellant are in the names of such companies which are controlled by Shri Sidharth Sharma and have a valid IEC. There is no denial of Sh....
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.... 10 (d) advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of noncompliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be;" 14. On the said aspect, it has been held by the learned CESTAT as follows: "8.2.1 The department has alleged that Shri Yusuf Pardawala was engaged in import of the subject goods powertools/Grinding wheels etc. from Chinese based firm M/s.. Dongcheng. Supplier sent the original invoice bearing actual value of the said goods directly to Sh. Yusuf Pardawala, however, he used to submit the undervalued invoices to the Indian Customs. In same modus operandi, he also had used IEC of other importer firms viz. M/s. Maggie Marketing Pvt. Ltd., M/s. Safebot Technologies, M/s. Honeywell Tradelinks Pvt. Ltd and Mis. Emrick Distributors (actually owned by Shri Sidharth Sharma) to clear his imported consignments. It is alleged against the appellant that despite being aware of the facts of mis-utilisation of IEC, CHA Instead of intimating the same to the customs department, himself got connived wi....
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.... that his earlier statements were taken under coercion hence stands rebutted in the light of his cross-examination. This deposition of Shri Sidharth Sharma help us to conclude that the confirmation of allegations against the appellant based merely on the statement in chief of Shri Sidharth Sharma which has been rebutted by him during his cross-examination is absolutely wrong. There appears nothing on record to prove that the appellant was In direct conversation with Shri Yusuf Pardawala and accordingly, there arises no reason with the appellant to advice Shri Sidharth Sharma to not to let his companies name be used by Shri Yusuf Pardawala while importing power tools. When the importing firms having valid IEC was making profit on commission basis, under an arrangement with another big businessman while importing goods in their names. 8.2.5 We further observe that the above findings stands corroborated from the deposition of Shri Pankaj Singh alias Banti who has acknowledged that he was doing freight forwarding work for all consignments filed in M/s. Yuri Impex Pvt. Ltd., M/s. Yuri International, M/s. Ray Exim India Pvt. Ltd., M/s. Maggie Marketing Pvt. Ltd., M/s. Impex Stee....
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....ne even the importers were found existing at the declared addresses, mere allegation that some other person was importing goods in the name of the importers whose names were mentioned in the Bills of Entry does not render the identity of the importer as doubtful especially when there is an apparent arrangement, with mutual consent between the importer and the said other person, the beneficial owner of the imported goods. 8.3.2 There has been an amendment in Section 2(26) of the Customs Act, 1962 which defines importer. After the said amendment not only the owner of the imported goods is importer but even a beneficial owner of such goods is also defined as importer. From the facts and the circumstances above, we observe Shri Yusuf Pardawala would have been the beneficial owner of the goods. Hence, he equally is an importer but the goods owned by him have been imported by a validly existing importing firm. The appellant herein was transacting the business of those validly existing firms that too under the authority of the owner of said companies for getting clearances of those goods. Hence, we hold that the allegations about the wrong identity of the client of appellant are ....
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....essure. Thus, we hold that the statement which has been relied upon by the authorities to confirm allegations against appellant while revoking his license was actually a retracted version. As already observed above the cross- examination of the said witness, fully supports the case of appellant. The silence to retraction and cross-examination of witness is sufficient to set aside the order of revoking license and imposing penalty. We found no evidence as that of placement of purchase order by the appellant and of foreign remittances in favour of the appellant etc. which might prove the alleged connivance of the appellant. Thus, the findings of adjudicating authority below are held to be based on presumptions and surmises only. Even the Show Cause Notice as served upon the appellant is based on third party evidence i.e. on the documents recovered from premises of Shri Yusuf Pardawala. 8.3.5 We also observe that Commissioner (Appeals) has committed an error while ignoring the most cogent part of the statement of Shri Siddharth Sharma, wherein, he has specifically acknowledged that payments and charges for clearance etc. were paid to the appellant from the accounts of the con....
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....e to examine and appreciate the evidence on the record and came to a categorical finding that the respondent/CHA was not guilty of non-performance of any of the statutory duties cast upon it. It is evidently brought out that there was a private arrangement between the two importers for which the respondent/CHA facilitated customs clearance in the name of companies, having valid IECs for the goods imported by the owners of the companies involved; and that the respondent/CHA had been duly authorized in this regard by Mr. Sidharth Sharma. There was proper verification on the part of the respondent/CHA with regard to genuineness of the IEC as also GSTIN [Goods and Services Tax Identification Number] and mere allegations that some other person was importing goods in the name of the importers, whose names were mentioned in the Bills of Entry, did not render the identity of the importer doubtful especially when there was apparently an arrangement with mutual consent of the importer and the beneficial owner and in the said circumstances there was no basis for the Adjudicating Authorities to pass the impugned order thereby suspending the license of the CHA based on the statements of the imp....