TaxTMI 
TaxTMI 
2024 (1) TMI 782
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....ned with the activities for which appellant herein was licensed; the allegedly nefarious activities of such a pass-holder, although obtained through the licensed customs broker, cannot be visited upon the broker in the absence of a link between the two in the context of established misdemeanor. Accordingly, by following the principles laid down by the Hon'ble High Court of Bombay in the Unison Clearing P Ltd., the Tribunal held that the case does not merit continued revocation of the Customs Broker (CB) license, and ordered the CB license to be restored. The department had preferred an appeal against the above order of the Tribunal before the Hon'ble High Court of Bombay in Custom Appeal No. (L) No.3447 of 2020, in which the Hon'ble High Court of Bombay vide its Order dated 27.08.2021 had ordered the following: "2. The appeal has been admitted by this Court on 22nd October 2020 on the following substantial questions of law: 'a) whether, on the facts and in the circumstances of the case, the important delay in completion of proceeding for revocation of license vitiates the Order-in-Original dated 28.03.2019 first by the Commissioner of Customs (General)? b....
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....at the Tribunal has failed to consider the detailed submissions as sought to be made out on behalf of the parties and without even dealing with the detailed explanation as well as the necessary facts, allowed the appeal of Respondent. In our view, the Tribunal ought to have discussed each of the submissions before coming to any conclusion. xx xx xx xx 41. In our view, reliance by the CESTAT on the decision in the case of Principal Commissioner of Customs (General), Mumbai Vs. Unison Clearing P. Ltd. (supra) to restore the license of the Respondent is completely misplaced and a complete non-application of mind. 42. In accordance with the above discussion, we are of the view that the findings of the Tribunal are unsustainable and the matter is required to be sent back for reconsideration by the Appellate Authority taking into account all the aspects to arrive at a proper decision. We, therefore, set aside the order of the Tribunal dated 21st November, 2019. The matter is remanded back to the CESTAT for fresh adjudication. 43. The Appeal is accordingly disposed in the above terms. No order as to costs." 2. In the impugned order the learned Commis....
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.... premises of the exporter- KCP revealed that no such business entity or address was found to be existent in the given address. Preliminary enquiry conducted in the operations division of ESA, revealed that the freight booking for the said export consignment was done by one person namely Shri Vijay Poojary, who is also a Freight Forwarder and a customs broker by profession operating those business entity in the name of M/s Marine Trans India Private Limited and M/s Srinivas Clearing and Shipping India Private Limited (SC&SIPL). Further investigation of the case with ESA (through Shri Shivdas Ramesh Tandel, Deputy Manager) revealed that the said Shri Vijay Poojary is a good friend and close associate of Shri Harshavardhan Hegde, Managing Director of ESA, and on his directions, he had facilitated booking of containers for Shri Vijay Poojary without any KYC verification of the business entity which is sending the request for containers in which the export goods are to be stuffed and transported out of the country. He had also assisted Shri Vijay Poojary in a similar manner recently for export of goods by M/s R.N. Laboratories Private Limited, SEZ Diamond Park, Sachin, Surat for contain....
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....hat that the Department has not still implemented the final order dated 11.01.2017 passed by the Tribunal, it had directed the respondent Commissioner to implement the said final order and report compliance report the bench on 29.01.2018 by issue of Order No. I/2/18 dated 15.01.2018. On the basis of the directions given by the Tribunal, the CB license of appellants was restored by the Department vide Notice No.234/2017-18 dated 24.01.2018. Further, show cause notice dated 14.05.2018 was also issued for initiating inquiry proceedings under Regulation 20 ibid, against violations of CBLR as above. 3.3 Subsequently, during the inquiry proceedings conducted by the Inquiry Officer, he gave personal hearing opportunities to the appellants on 09.07.2018, 17.07.2018, 23.07.2018, 27.07.2018, 02.08.2018, 08.08.2018, 13.08.2018, 14.08.2018, 23.08.2018, 24.08.2018 and also conducted examination of evidences of witnesses and cross examination of witnesses by the Advocate representing the appellants on 27.08.2018, 30.08.2018, 12.09.2018. Upon completion of the inquiry, a report was submitted on 30.10.2018 concluding that all charges framed against the appellants have been proved. Accordingly, ....
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....onths delay in issue of the Show Cause/Inquiry Notice after receipt of offence report on 16.05.2016; 37 days delay in submission of inquiry report. As there was gross delay in the conclusion of inquiry proceedings for which there is no explanation, without prejudice their submission on merits, they stated that on the ground of non- adherence with the time limits, the impugned order is liable to be set aside. In view of the above, they requested that impugned order be set aside and consequential relief be granted to them. 5. Learned Authorised Representative (AR) reiterated the findings made by the Principal Commissioner of Customs (General) in the impugned order and submitted that each of the violation under sub- regulations (a), (e), (j), (k) and (n) of Regulation 10 ibid, has been examined in detail by the Principal Commissioner. The appellants CB is a private limited company, in which 99.9% of the shares is held by its director Shri Vijay Poojary, who is also a "G" card holder. The said Shri Vijay Poojary had fabricated the export documents without using the name of his from for circumventing the legal provisions, for smuggling of Red Sanders, the export of which is prohibite....
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....oner continued the suspension by issue of an order No.17/2016-17 dated 13.07.2016. Further, regular inquiry proceedings were initiated under Regulation 17(1) ibid [earlier 20(1) of CBLR, 2013], by issue of show cause notice No.11/2018-19 dated 14.05.2018, specifying the grounds on which the appellants have alleged to have been violated CBLR, 2018. In conclusion of these proceedings, the impugned order was passed by the jurisdictional Principal Commissioner revoking the Customs Broker license granted to the appellants for the failure on the part of appellants to fulfill the obligations cast on them under Regulations 10(a), 10(e), 10(j), 10(k) and 10(n) of CBLR, 2018 [earlier 11(a), 11(e), 11(j), 11(k) and 11(n) of CBLR, 2013] and also imposed penalty of Rs.50,000/- besides forfeiture of entire security deposit. 8.1 In order to examine the above issues, and the divergent stand taken by both the parties, we would like to firstly examine the facts contained in the DRI investigation and the allegations specifically framed against the appellants for having violated the CBLR ibid. From the findings of the Principal Commissioner in impugned order dated 28.03.2019, the following facts ha....
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....aring & shipping (India) Pvt. Ltd. revealed that booking of freight for all the 18 consignments was done by Shri. Vijay Poojary in benami names by making cash payments. Employees of the firm further admitted that they had destroyed the export documents such as Invoice, Packing List, Shipping Bill etc., post shipment of the said consignments on the directions of Shri. Vijay Poojary. 27. Examination of the present consignment revealed that the container was containing 7.8 MTs of Red Sanders valued at Rs. 3.12 Crores. The estimated quantity of Red Sanders that have been smuggled out in past seventeen consignments booked by Shri. Vijay Poojary by using bogus names of Freight Forwarders as well as shippers works out to 120 MTs valued at Rs.48 crores. DRI has also reported that Shri. Vijay Poojary was earlier detained under COFEPOSA Act, 1974 under PSA-1205/18(1)/SPL-3(A) dated 17.02.2006 during the period 17.02.2006 to 20.10.2006 a new case investigated by DRI, MZU (F. No. MZU/D/PSA-12/2005 - M/s Rama Creations and others) related to fraudulent exports of garments and for obtaining undue benefits under the DEPB Scheme. Consequently, his CHA license No.11/171 which was issued in....
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....a bill of entry for home consumption or warehousing in such form and manner as may be prescribed :.... Section 50. Entry of goods for exportation. - (1) The exporter of any goods shall make entry thereof by presenting electronically on the customs automated system to the proper officer in the case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill of export 3 [in such form and manner as maybe prescribed: ..... Section 146. Licence for customs brokers- (1) No person shall carry on business as a customs broker relating to the entry or departure of a conveyance or the import or export of goods at any customs station unless such person holds a licence granted in this behalf in accordance with the regulations......." Customs Brokers Licensing Regulations, 2018 (CBLR) 2. Definitions.- (1) In these regulations, unless the context otherwise requires, ....... .... (d) "Customs Broker " means a person licensed under these regulations to act as an agent on behalf of the importer or an exporter for purposes of transaction of any business relati....
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.... Provided that an applicant who has already passed the examination referred to in regulation 9 of the Custom House Agents Licensing Regulation, 1984 or regulation 8 of the Custom House Agents Licensing Regulation, 2004 or regulation 6 of the Customs Brokers Licensing Regulations, 2013 shall not be required to appear for any further examination. (2) The written examination shall be conducted on specified dates in the month of January of each year for which intimation shall be sent individually to applicants in advance before the date of examination and the result of the said examination shall be declared by end of May each year. (3) The applicant who is declared successful in the written examination shall be called for an oral examination on specified dates in the month of June of each year, the result of which shall be declared in the month of July of each year. (4) The applicant shall be required to clear both the written examination as well as corresponding oral examination. xx xx xx xx xx (7) The examination may include questions on the following: (a) preparation of various kinds of bills of entry, bills of export, s....
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....ions, rules, notifications, etc. under the Customs Act and other Allied Acts. (8) The Principal Commissioner of Customs or Commissioner of Customs shall satisfy himself that the individual applicant or in cases where applicant is a firm or company, its partner or Director or authorised employees who may be engaged for handling the customs work shall possess satisfactory knowledge of English and the local language of the Customs Station: Provided that in case of a person deputed to work extensively in the docks, knowledge of English shall not be compulsory and knowledge of Hindi shall be considered as desirable qualification. xx xx xx xx xx 13. Engagement or employment of persons.- (1) A person who has qualified the examination referred to in regulation 6 may engage himself in the work relating to the clearance of goods through customs on behalf of a firm or a company licensed under these regulations. (2) A Customs broker who has been issued a license under sub-regulation (2) of regulation 7 shall be issued a photo-identity card in Form F by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may ....
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....importer/exporter is also liable for action under the Act of 1962. The CBLR specifically provide for the individual person who intends to act as CB, shall make an application; and that such applicant in case of firm, shall be filed by its partner; and in case of a company, shall be filed by its director or an authorised employee. These applicants are required to pass the examination, both oral and written, in order to demonstrate that they have sufficient knowledge of the Laws of Customs and other allied laws governing the international trade, import and export, domestic legislations relating to compliance to various prohibitions, environmental protection, import/export restrictions, conformity with the quality and standards, financial/foreign exchange compliances in relation to enforcement of customs law and allied Acts concerning import/export of goods. The above requirements under CBLR clearly brings out the role of a Customs Broker who files the documents on behalf of the exporter, shall examine all aspects of the transaction to rule out that the export of goods are not in violation of any of the Acts, Rules or Regulations. 8.3 Thus, the above independent system of checks of....
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....f IGMs/EGMs to Customs authorities. He knew Shri Vijay Poojary, Director of appellants CB as a friend Shri Harshavardhan Hegde, Managing Director of the same shipping agency in which he is working; on the specific directions of said Shri Harshavardhan Hegde, M.D. he facilitated smooth operations/ clearance of export containers for Shri Vijay Poojary; he had prepared the 'Via loading request' as the request of Shri Vijay Poojary, for changing the vessel of export container from MV Esperanza to MV Diaporos and later emailed for change of port of destination from Khorfakkan, UAE to Jebel Ali, UAE; he had even sent the request for de-manifesting the export container to the terminal operator and got it de-manifested on the directions of Shri Vijay Poojary, having got alerted that the said container was put on hold by Customs investigation agency; he had deleted all call records and messages from his mobile as per the directions of Shri Vijay Poojary. 8.6 Similarly, Shri Harshavardhan Hegde, Managing Director of shipping agent M/s Emirates Shipping Agencies (India) Pvt. Ltd. had also given voluntary statement dated 28.11.2015, stating that he knew Shri Vijay Poojary from 2001 and he h....
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.... forwarded to the Institute of Wood Science & Technology, Bengaluru vide letter F.No. DRI/MZU/ C/INT- III/2015 dated 30.12.2015 for ascertaining its identity. As per reply dated 12.02.2016 received from RO, Wood Properties and Engineered Wood Division, Institute of Wood Science & Technology, Bangalore, it was confirmed that the said representative sample of wood was of Red Sanders (Pterocarpus Santalinus), which is a prohibited item for export from India. 8.9 The records of the case also reveal that when the offence report from DRI was received by the jurisdictional Pr. Commissioner on 16.05.2016, the said Shri Vijay Poojary was absconding. Meanwhile, intelligence was received by DRI that on 09.12.2015, the said Vijay Poojary would come to meet his accomplice Shri Badshah Majid Malik, who was his close associate in the smuggling of Red Sanders, at Starbucks Coffee, Bandra-Kurla Complex, Mumbai. A discreet watch was kept at the said location and the said S/Shri Vijay (Subbanna) Poojary and Badshah Majid Malik were identified while they were in a meeting and their voluntary statements under Section 108 of the Customs Act, 1962 under summons proceedings. On enquiry by DRI officers,....
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....ri Baburao, who also used to collect the final Bill of Lading; Shri Badshah Malik used to provide him the name and address of the person based in Dubai to whom the final Bill of Lading used to be couriered by him; he had thrown his Laptop, used by him for sending e-mails for the above said freight bookings, into the Vashi creek along with his i-Phone Plus and i-Phone 4S mobile phones after the seizure of the consignment of Red Sanders by DRI and post the arrest of Shri Harshavardhan Hegde as he had got scared; he had received money only for 17 consignments out of the 18 containers for which he had done freight booking ad shipment for Shri Badshah Malik, as the last consignment was caught by DRI. 8.11 The DRI investigation further revealed that the appellants CB M/s SC&SIPL (CHA/CB no. 11/171) through its Director Shri Vijay (Subbanna) Poojary, had rendered services of their employees for filing of forged documents for illegal export and got the export consignments of Red Sanders cleared by mis-declaring them as "Fabric Glue/Assorted Acrylic colours/Radiators". The company's Director had also floated factious business entities as freight forwarders, exporters to facilitate such i....
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....t application, etc., all correspondence, other papers relating to his business as Customs Broker and accounts including financial transactions in an orderly and itemised manner as may be specified by the Principal Commissioner of Customs or Commissioner of Customs or the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; xxx xxx xxx xxx (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;" 11. In respect of Regulations ibid, it is on record in the impugned order at paragraph No. 26 that the CB forged all documents concerning the export in the present consignment and all earlier 17 past consignments. The detailed investigation conducted by DRI had revealed that in respect of past consignments in which by adopting similar modus, smuggling of red Sanders were exported, one container was detained by customs authorities at port of Jebel Ali; similarly one another container had been lying uncleared at Ajman port. Furth....
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....asons for the delay or non-adherence to this time-limit by the Officer conducting the inquiry and making him accountable for not adhering to the time schedule. These reasons can then be tested to derive a conclusion whether the deviation from the time line prescribed in the Regulation, is "reasonable". This is the only way by which the provisions contained in Regulation 20 can be effectively implemented in the interest of both parties, namely, the Revenue and the Customs House Agent." 13.1 From the records of the case, we find that there is definitely delay in adjudication and that for the export transactions occurred in November, 2015, the order of revocation of appellant's customs broker license has been passed on 28.03.2019. Though Revenue has not explained why there was such a long delay of 3 years and ² months in taking action against appellants, when the information about fraudulent exports was received on 16.05.2016. Though the first order-in-original revoking immediate suspension, was passed on 10.06.2016, action against the appellants under CHALR/CBLR vide Show Cause Notice was issued on 14.05.2018. The impugned order has been passed after almost nine months from t....