TaxTMI 
TaxTMI 
2024 (2) TMI 315
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....llegation that Shri Ramesh Wadhera and Shri Sanjeev Maggu were engaged in evasion of customs duty by way of diverting the goods stored in customs bonded warehouse into the domestic market without payment of customs duty. It was further revealed that the documents were forged/fabricated to show re-export warehoused goods. For this purpose, Shri Ramesh Wadhera and Shri Sanjeev Maggu created dummy firms and obtained IEC in their names, the details whereof are: (i) M/s Accturists Overseas (OPC) Pvt. Ltd. (ii) M/s Spark Exports (iii) M/s Shree Shyam Enterprises (iv) M/s Horrens Exim During the course of investigation, statement of Shri Rajat Prabhakar, CHA, M/s R.P. Cargo Handling Services was recorded on 25.07.2017, wherein he admitted that he had filed the papers for 16 consignments for two importers i.e. M/s Accturist Overseas (OPC) Pvt. Ltd., New Delhi and M/s Sparx Exports, New Delhi, that he had not physically verified the premises of M/s Accturist Overseas OPC Pvt. Ltd., New Delhi and M/s Sparx Exports, New Delhi, however in order to verify the existence of their premises he had sent a letter by speed post, asking for submitting their KYC documents; that in response to t....
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....8 was issued to the appellant for contravening the provisions of Regulation 10(b), 10(d), 10(e) and 10(n) of the Customs Broker Licensing Regulations (CBLR, 2018). In terms of Regulation 17(1) of CBLR, 2018 inquiry officer was appointed who submitted his report dated 16.11.2018 whereby he dropped the charges against the appellant. However, the adjudicating authority based his disagreement note dated 30.11.2018 against the inquiry officer. On adjudication, vide order dated 04.02.2019 the license of the appellant has been revoked under Regulation 17 of CBLR along with forfeiture of the security deposit and imposition of fine of Rs. 50 lakhs. 4. The appellant challenged the order dated 4.2.2019 before this Tribunal, which was disposed of vide order dated 26.4.2019 and the appeal was allowed on a preliminary objection that the notice under regulation 20 of CBLR was required to be received by the Customs broker within 90 days of the receipt of the offence report and since in the present case, it was beyond the said period, the show cause notice was barred by limitation. The department challenged the order of this Tribunal in Customs Appeal No. 223/2019 before the Delhi High Court, wher....
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....ad admitted that he knew that Shri Sanjeev Maggo is the actual owner but he never informed the department of this fact and thereby he connived with Shri Sanjeev Maggu in the fraud caused to the government exchequer and thereby violated the provisions of Regulation 10(d). Similarly, the appellant failed to exercise due diligence to ascertain the correctness of the information which resulted in contravention of Regulation 10(e). He further relied on the statement dated 19.08.2017 of Shri Lalit Dogra, dummy proprietor of M/s Accturist Overseas, which clearly shows that Shri Sanjeev Maggu opened the firm in his name and promised to pay him Rs. 15,000/- per month and also informed him that Shri Sanjeev Maggu would forge his photograph, in his KYC i.e. voter id. The appellant having failed to notice the discrepancy in the KYC document contravened the provisions of Regulation 10(n) of CBLR, 2018. In nutshell, he submitted that the appellant did not take authorization and KYC details from the concerned importers and failed to verify the correctness of the IEC, GSTIN, identity of his client and functioning of his client at the declared address by using reliable and independent data or infor....
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....t the Appellant had become aware that the importer firms were dummy firms being (illegally) run by Mr. Ramesh Wadhera in connivance with Sh. Sanjeev Maggu and yet he allowed Sh. Sanjeev Maggu to transact business with Customs authorities; and this act and omission of the Appellant was in contravention of this Regulation. 11.1. The Tribunal while upholding the said finding of the Commissioner opined that the said Regulation has been contravened since Mr. Sanjeev Maggu transacted business at the Customs Station despite not being the authorized representative either of the importer firms or the Appellant herein. 12. In the facts of this case admittedly, Mr. Sanjeev Maggu never acted on behalf of the Appellant but was acting only on behalf of the importer firms. There is no material placed on record to show that Mr. Sanjeev Maggu ever acted on behalf of the Appellant at the Customs Station. 12.1. On a plain textual reading of the Regulation, it is apparent that a Customs Broker is required to transact the business at the Customs Station either personally or through his/her authorized employee. In the facts of this case, there is no material on record to indicate/suggest that the ....
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....tored at the public bonded warehouses and the illegality by the importer firms was committed when the said goods were diverted by them into the domestic market without payment of the applicable custom duty. It is stated by the Respondent that the said importer firms filed fabricated documents to falsely show the re-export of the goods. However, admittedly, the Appellant herein had no role to play at this stage when the false documents of re-export were filed by the importer firms with the Customs authorities. 14.3. In the facts of this case, it has come on record that the persons controlling the importer firms acted on their own accord when they conspired to defraud the revenue; there is no allegation that they were acting on the aid or advice of the Appellant. There is admittedly no allegation against the Appellant that he abetted the diversion of the imported goods. 14.4. The proprietor of Appellant, in reply to question no. 8 in the statement recorded by DRI on 14.07.2017, stated that he 'subsequently' learnt that the goods which had been imported for re-export were being sold in the domestic market. In this statement there is no admission that the Appellant was awar....
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....horised to perform various functions under the Customs Act for the purpose of clearing the goods from the Customs. Once he has discharged all his duties and functions as such agent and the goods in question have been cleared and delivered to the importer/owner, his work as a clearing agent in respect of the goods ordinarily comes to an end. Any notice served on him thereafter in respect of goods already cleared cannot be construed as a notice given in the course of business of clearing the goods concerned, transacted by him for the principal." ( Emphasis Supplied ) 15.3. The obligation of the Customs Broker under this Regulation has to be read in the context of the duties discharged by him/her under Section 146 of the Act. There is no duty imposed on the Customs Broker under the parent Act to report commission of acts or omissions of its principal, which are in violation of the provisions of the Act. Since the CBLR, 2018 have been made under Section 146(2) of the Act and are intended to regulate the grant of license to a Customs Broker, the scope of this Regulation cannot be enlarged to read into it a general duty to report violations of the provisions of the Act by his/her c....
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....r firms in clearance of the cargo, failed to exercise due diligence and thereby causing loss to the revenue. The learned Tribunal referred to the answer given by the Appellant to question no. 8 in the statement dated 14.07.2017 to uphold this finding of the Commissioner. 16.1. The said Regulation casts a duty on the Customs Broker to exercise due diligence in communicating correct information to a client with reference to any work related to clearance of cargo. The said Regulation has no concern/application with the acts or omissions of the importer firms itself. (Re: Kunal Travels (Cargo) v. Commissioner of Customs (Import & General), 2017 SCC OnLine Del 7683) 17. There is no finding in the order of the Commissioner that the Appellant had given any incorrect information to the importer firms in the process adopted for the clearance of the goods at the Customs Station or in any manner abetted the importer firms in the diversion of the goods from the public bonded warehouse to the domestic market. In the opinion of this Court, the findings of the Commissioner and the learned Tribunal do not furnish any ground for alleging contravention of this Regulation. The illegal actions of ....
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....e CHA prominently at the top of such documents. The aforesaid clauses do not obligate the CHA to look into such information which may be made available to it from the exporter/importer. The CHA is not an inspector to weigh the genuineness of the transaction. It is a processing agent of documents with respect to clearance of goods through customs house and in that process only such authorized personnel of the CHA can enter the customs house area. What is noteworthy is that the IE Code of the exporter M/s. H.M. Impex was mentioned in the shipping bills, this itself reflects that before the grant of said IE Code, the background check of the said importer/exporter had been undertaken by the customs authorities, therefore, there was no doubt about the identity of the said exporter. It would be far too onerous to expect the CHA to inquire into and verify the genuineness of the IE Code given to it by a client for each import/export transaction. When such code is mentioned, there is a presumption that an appropriate background check in this regard i.e. KYC etc. would have been done by the customs authorities. There is nothing on record to show that the appellant had knowledge that the good....
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....re is no dispute that importer firms exist and they have participated in the investigation conducted by DRI. It is stated that the fact that these firms are dummy firms which are controlled by third parties was a fact which was not within the knowledge of the Appellant while he was initially dealing with the said firms for clearance of cargo; and was a fact which came to his knowledge subsequently after the goods had already been cleared by the Customs Station. 18.5. Appellant also states that the reliance placed by the Commissioner on the statement of Mr. Lalit Dongra is not justified since the Aadhar Card which is alleged to have been forged has not been placed on record. 19. A perusal of the written submissions filed by the Respondent would show that the Respondents have found the Appellant 'negligent' in verifying the KYC documents of the importer firms as he failed to obtain the requisite KYC documents and/or verify the documents made available to him by the importer firms. 20. This Court has perused the record. In the facts of this case, there is no allegation of impersonation in the name of importer firms. The finding of DRI is that these importer firms were no....
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....LT, 725 (Tri.-Del.) and Commissioner of Customs Vs. Yogesh Kumar, 2017 (349) ELT 12 (Del.). The fact that the appellant had sent the letter by speed post at the given address and M/s Spark Exports had responded and the KYC documents were submitted by both the importers shows that the appellant had fulfilled the obligation under the Regulations. The appellant verified the IEC number from the site of the DGFT and personally met Sh. Lalit Dogra and Sh. Samar Arora, proprietors of the two firms. As noted above, the High Court in Kunal Travels (supra) held that grant of IEC Code presupposes a verification of facts etc. made in such application with respect to the concern or entity. 11. We also find that in the inquiry report, the findings of the inquiry officer were in favour of the appellant on the basis of the reasoning which is now accepted by the High Court in D S Cargo. We may quote the observations of the inquiry officer as under: " They performed their work in the capacity of Customs Broker upto warehousing of the goods. The importer had never admitted that they have committed this fraud with the help of M/s R P Cargo and they have taken assistance in clearance of warehoused g....