TaxTMI 
TaxTMI 
2024 (2) TMI 979
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....fic intelligence developed by Customs officers of NSPU/R&I unit, that one exporter M/s G.R. Creation located at Shop No.1, Plot No. B/1,2,3, Sector-19/20, CBD Belapur, Maharashtra is attempting to avail ineligible export benefits through IGST refunds by using bogus GST registration, bogus GST invoices etc., the Shipping Bills, which were filed for such fraudulent exports attempted to be exported out of India, were kept on hold and further investigation was conducted. From the investigation, it appeared that the declared premises of the exporter is a fake address and untraceable at the place of business provided in the GSTIN. It also appeared that actually no IGST/tax had been paid to the Government exchequer in respect of inputs involved in procuring these export goods from the suppliers by the IEC holder/exporter. As in all the above cases, the shipping bills had been filed by the appellants CB, it appeared that they have aided and abetted with the exporter to avail ineligible export incentives. 2.2. On the basis of an offence report dated 28.03.2022 received from customs investigation authorities, the jurisdictional Principal Commissioner of Customs (General), Mumbai-I had concl....
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....ied upon the following decisions of the Tribunal and the judgement of the Hon'ble High Court of Delhi, in the respective cases mentioned below: (i) Parvath Shipping Agency Vs. Commissioner of Customs (Gen.), Mumbai - 2017 (357) E.L.T. 296 (Tri.-Mumbai) (ii) Bright Clearing & Carriere Pvt. Limited Vs. Commissioner of Customs (Airport and General), Delhi - Final Order No.51083- 51084/2022 (iii) Exim Cargo Services Vs. Commissioner of Customs (General) - 2019 (368) E.L.T. 1024 (Del.) (iv) Thawerdas Wadhoomal Vs. Commissioner of Customs (General), Mumbai - 2008 (221) E.L.T. 252 (Tri.-Mumbai) 4. Learned Authorised Representative (AR) reiterated the findings made by the Principal Commissioner of Customs (General) in the impugned order and submitted that all the violations under sub-regulations (a), (d) and (n) of Regulation 10 ibid, has been examined in detail by the Principal Commissioner. The appellants CB got all the documents for export from Shri Bhaskar Jadhav and Shri Yusuf Siddiqui, who are neither IEC holder nor exporter or their representative; they never verified the authenticity of KYC documents properly and had did not cross check or conducted proper verification....
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....re not careful and not diligent in undertaking the KYC verification. Thus, the adjudicating authority had passed the impugned order confirming all the allegations of violation of above Regulations of CBLR, 2018. 7.1 Before we examine the allegations of violation of various Regulations under CBLR against the appellants, firstly we would like to examine the specific order passed by the learned Principal Commissioner of Customs (General) to see whether it is in compliance with the legal provisions. This is for the reason that when the CB license of the appellants CB was already revoked and the entire security deposit has also been already forfeited earlier vide Order-in-Original No.14/CAC/PCC(G)/PS/CBS (Adj.) dated 31.05.2021, for which an appeal has also been filed by the appellants and the same is pending disposal before this Tribunal. In this regard, we find that Regulations 17 ibid provide for the detailed procedure in conduct of regular inquiry against the CB in terms of CBLR, 2018. The extract of the same is given below: "Regulation 17. Procedure for revoking license or imposing penalty : - (1) The Principal Commissioner or Commissioner of Customs shall issue a notice in writ....
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....ified period not being less than thirty days, any representation that he may wish to make against the said report. (7) The Principal Commissioner or Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the Customs Broker, pass such orders as he deems fit either revoking the suspension of the license or revoking the license of the Customs Broker within ninety days from the date of submission of the report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, under sub-regulation (5): Provided that no order for revoking the license shall be passed unless an opportunity is given to the Customs Broker to be heard in person by the Principal Commissioner of Customs or Commissioner of Customs, as the case maybe. (8) Where in the proceedings under these regulations, the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, comes to a conclusion that the F card holder is guilty of grounds specified in regulation 14 or incapacitated in the meaning of the said regulation, then the Principal Commissioner of Customs or Commissioner of Customs may pass an order imposin....
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....cross-examination of the persons examined in support of the evidence against the CB (v) Preparation of the inquiry report containing the findings of the inquiry officer (vi) Obtaining written representation from the CB, if he wish to submit any grounds against the inquiry report (vii) Principal Commissioner of Customs to consider the inquiry report, CB's representation and provide an opportunity of personal hearing before passing an adjudication order on the inquiry proceedings (viii) Specific penalties against 'F' card holder, if case the Principal Commissioner comes to a conclusion for such imposition, duly following the procedure as above. The specific sub-regulation (7) of Regulation 17 ibid, provides the legal authority for the Principal Commissioner/Commissioner of Customs to pass such orders as he deems fit, either revoking the suspension of the license or revoking the license of the Customs Broker within ninety days from the date of submission of the inquiry report. Thus, it is very clear that if a CB license is operational, then the said order can be passed to the effect that it can be revoked or allowed to continue without revocation; or, if the CB license is alr....
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....iven to the appellants CB. Further, the appellants had also reiterated such a request made before the Principal Commissioner of Customs by submitting their written reply letter dated 12.12.2022. On this, the learned Principal Commissioner of Customs had only mentioned that he had provided sufficient opportunities for personal hearing on four occasions, and thus he is denying the request for personal hearing to the appellants CB on the 5th time, and had proceeded to pass the order in this case as ex-parte. From the above, it could be seen that the appellants, at the outset, had mainly challenged the impugned order on the ground that Regulation 17(4) ibid had been violated by the department inasmuch as cross-examination of two witnesses, whose statements were relied upon for adjudication of the dispute was denied. Thus, the appellant has contended that there is gross violation of the principles of natural justice and accordingly, the impugned order is liable to be set aside on such ground alone. 7.5 On perusal of the impugned order dated 11.04.2023, issued under Regulation 17 ibid, we find that the appellant had specifically prayed for cross-examination of Shri Rajesh Dilip Gihar, p....
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....to decline to examine any person on the ground that his evidence is not relevant or material. But he shall record his reasons in writing for so doing. Keeping this in mind, we shall now see the enquiry report to find out whether there was violation of Regulation 20(4). 21. It is seen from paragraph 22 of the enquiry report dated 10-1- 2018 that three things formed the basis for the allegations made against the petitioner. They were - (i) Bills of Entry, (ii) the imported goods and (iii) the statements recorded by DRI under Section 108 of the Customs Act, 1962 from Shri Arjun Pilane and Shri Pramod Bhor. In fact, an objection was raised by the petitioner before the Enquiry Officer that the statements recorded from the witnesses are not admissible as they were extracted under coercion. This contention was rejected and the Enquiry Officer asserted in paragraph 22 of his report that he is entitled to rely upon the same. Paragraph 22 of the enquiry report reads as follows : "22. Further the CB has contended in para-7 of this letter dated 6- 11-2017 that the allegations are not backed by evidence and the statements recorded by DRI are coercive. In this regard it is to put forth tha....
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....cross-examination on the scheduled date, despite even an oral communication about the same to Shri Pramod Bhor. ... ... ... Given that the request for cross-examination of persons (whose statements been recorded) was put forth to the Assistant Commissioner on 18-12-2017 only, efforts to enable the same within the time-constraints of inquiry proceedings as per the Regulation 20(5) of CBLR, 2013 were made. Moreover, the primary submission, dated 6-11-2017, was neither directed to the Inquiry Officer nor was the CB forthcoming to either attend the PH or submit supporting documents, until withdrawal of the notice by the Principal Commissioner of Customs. In the event of no such withdrawal and given the limitations of time, but keeping in view of the requirements of providing opportunity of being heard (which were not attended by the CB) and given the non-presentation of witnesses for crossexamination, it is to state that the findings are based on the available documents at hand i.e. the offence report, statements of Arjun Pilane and Pramod Bhor, the Prohibition order and the submissions of the CB, read with CBLR, 2013." 24. Therefore, it is clear that there was a gross violation of ....
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....hri Yusuf Siddiqui, who had in turn known the exporter M/s G.R. Creation through Shri Bhaskar Jadhav, his known accomplice in the import export trade. 8.3 The impugned exports were exported through four Shipping Bills (S/B) all dated 28.11.2018 for which the NSPU/R&I Customs investigation found that the FOB value has not been realized when they conducted address verification was done on 10.12.2018. Thereafter, voluntary statement from Shri Rajesh Dilip Gihar, proprietor of the export firm M/s G.R. Creation was recorded on 17.01.2019. However, subsequently Shri Sachin Sitaram Shinde, proprietor of the appellants CB was called for participating in the investigation only on 03.03.2022 for recording his statements under Section 108 of the Customs Act, 1962. Further, the allegation against the exporter is that they attempted to avail ineligible export incentives such as Drawback, RoSL and MEIS benefits upon export of goods. Further, it is also alleged against the exporter that they in respect of the input credit taken by them, there was no actual IGST was paid. Thus, it is seen that alleged ineligible availment of export benefits is solely on account of the action taken by the exporter....
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....porter. Therefore, the authorisation submitted is not a valid one". This finding is based on a presumption. Obtaining an authorisation from the importer does not mean that the same should be obtained directly; so long as the concerned import documents were signed by the importer, it amounts to authorisation by the importer and, therefore, it cannot be said that there has been a violation of Regulation 13(a). ... The question now is whether revocation of licence is warranted for such a violation. In our view, the punishment should be commensurate with the gravity of the offence. Revocation is an extreme step and a harsh punishment, which is not warranted for violation of Regulation 13(b). Accordingly, we are of the view that forfeiture of security tendered by the appellant CHA is sufficient punishment and revocation is not warranted. Accordingly, we set aside the order of the revocation and direct the Principal Commissioner of Customs (General) to restore the CHA licence subject to the forfeiture of entire security amount tendered by the CHA." In the absence of any document to prove the claim of mis-declaration of export goods, the findings given by the learned Principal Commissio....
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....mong specified documents is sufficient for fulfilling the obligation prescribed under Regulation 10(n) of CBLR, 2018. We find that in the present case, the appellants CB had obtained the KYC documents and submitted the same to the Customs Department. Thus, we do not find any legal basis for upholding of the alleged violation of Regulation 10(n) ibid by the appellants in the impugned order on the above issue. 10.4 We find that in the case of M/s Perfect Cargo & Logistics Vs. Principal Commissioner of Customs (Airport & General), New Delhi 2021 (376) E.L.T. 649 (Tri. - Del.), the Tribunal had decided the issue of KYC verification of the importer/exporter by the Customs broker and the requirements specified in the CBLR, 2018. "34. The basic requirement of Regulation 10(n) is that the Customs Broker should verify the identity of the client and functioning of the client at the declared address by using, reliable, independent, authentic documents, data or information. For this purpose, a detailed guideline on the list of documents to be verified and obtained from the client is contained in the Annexure to the Circular dated April 8, 2010. It has also been mentioned in the aforesaid Ci....