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2024 (12) TMI 1416
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....enue Intelligence, Mumbai Zonal Unit (DRI MZU), an enquiry was held with the Consulate General of India, Dubai, UAE on overvaluation of export goods. In a reply letter dated 08.03.2018, it was reported by the said Consulate General that from scrutiny of the documents provided by Federal Customs Authority, Dubai, it appeared that the goods have been cleared with unit values much lower than what was declared to customs authorities in India at the time of export. On the basis of such specific information received from DRI MZU, Mumbai by Customs officers of Special Intelligence & Investigation Branch-Exports [SIIB(X)], Air Cargo Complex, they had carried out further investigation, and it was found that certain exporters are overvaluing the export goods in order to avail higher drawback which is ineligible. Hence, the department had initiated investigation against such exports done by one exporter M/s World Wide Export, Mumbai. Accordingly, detailed investigation was conducted and it was found that there were a number of export consignments cleared under 31 Shipping Bills (S/Bs) during the period 2012- 2017 by the said exporter, in which the appellants CB had handled 6 shipping bills. T....
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....ports in 6 S/Bs have been duly assessed by the Customs officers and Let Export Order permitting such exports were given for export under Section 51 of the Customs Act, 1962. Hence, there is no case made out by the Customs on the basis of the evidence collected from Dubai Customs authorities. In addition to this, he submitted that neither the valuation of the export goods has been arrived at in terms of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 nor any market inquiry was conducted to substantiate the claim of over valuation by the department. He further stated that the export value has been received by the exporters as realization of export proceeds, except for minor variation which is recorded in the SCN dated 15.11.2022 initiated against various exporters and CBs. Thus, he submitted that there is no case of overvaluation of exports in these cases. 3.2 Learned Advocate further submitted that on similar grounds of over valuation of exports, in the case of M/s Tulsidas Khimji Pvt. Ltd., Mumbai, in show cause proceedings initiated seeking for suspension of CB license and forfeiture of security deposit vide SCN dated 17.03.2023, adjudication order ha....
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....cords. 6.1 The issue involved herein is to decide whether the appellant Customs Broker has fulfilled all his obligations as required under CBLR, 2018 or not. The specific sub-regulations which were alleged to have been violated by the appellants in the show-cause notice are Regulations 10(d), 10(e), 10(f) of CBLR, 2018. As the impugned order itself had dropped the proceedings against violation of Regulation 10(n) ibid, this is not a ground for appeal by the appellants against the impugned order. Besides, there are certain distinct charges framed against the appellants in this case. We find that the Regulation 10 ibid, provide for the obligations that a Customs Broker is expected to fulfill during their transaction with Customs in connection with import and/or export of goods. These regulations are extracted and given below as follows: Customs Brokers Licensing Regulations, 2018 "Regulation 10. Obligations of Customs Broker: - A Customs Broker shall - ... (d) advise his client to comply with the provisions of the Act and in case of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant C....
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....uch gravitas as to merit revocation of license to practice a profession and, more specifically, when the licensing authority itself appears to have discountenanced proper conjecture of the provision of law that supposedly made the impugned goods offending. Accordingly, the Tribunal had set aside the Order of the Principal Commissioner in suspending the appellants CB license. 7.2 The relevant paragraphs in the said order is extracted and given below: "2. M/s Beejay Clearing & Forwarding Agency, holder of 'customs broker' licence no. 11/707, was one among the many that came under scrutiny in investigation of value of shipments undertaken by several exporters who had allegedly secured 'drawback' in excess of eligibility by furnishing unconnected invoices with inflated prices obtained from 'bogus firms' of one Suhel Ansari. Insofar as the impugned proceeding is concerned, it was the dealings of the appellant with M/s Basar Jewels Pvt Ltd, on whose behalf export of goods during 2012-16 involving claim of Rs. 2,83,000 as drawback against six shipping bills had been handled, that triggered order of suspension on 30th December 2022 under regulation 16 of Customs Broker Licencin....
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....fastened with such overwhelming role as to warrant termination of licence to practice a profession, is the handling of three shipping bills out of thirty one consignments involving claim of Rs.3,31,000 as drawback on 'imitation jewellery' exported by M/s World Wide Export between 2012 and 2017 that relies upon statements of M/s Moize Ahmed Ali Angoothiwala, partner in the exporting entity, on modus operandi, the report from Consulate General of India (CGI), Dubai that Federal Customs Authority of United Arab Emirates intimated clearances there at lower values on import and the statement of one Suryabhan Eknath Dhurphate, proprietor of M/s Sanket Overseas and 'logistics provider', that cost and expense of export was, generally, only 35% of drawback with 65% available to them and exporter. The exporter whose consignments were handled by the appellant admitted to procuring goods from local 'karigars' against 'kaccha bills' for which invoice and packing bills were prepared and forwarded to 'custom broker' and 'forwarding agency' for completion of customs formalities but denied any relationship with the said Suhel Ansari as the said invoices had been received only indirectly through oth....
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....sponsibility devolved on the 'customs broker' in relation to the impugned consignment. No evidence is forthcoming that goods procured by a merchant exporter are ineligible for drawback or that only goods exported from factory of manufacture are eligible for drawback; such inference does horrible violence to the statutorily enacted contractual obligation of the State to reimburse drawback and to the delegated authority to draw up a 'schedule of rates of drawback' for sanction of claims without researching each. The framework of Central Excise Act, 1944 does not brook assumption for its own enforcement, let alone a process under Customs Act, 1962, that goods available in the marketplace are likely to have been cleared, or imported, without payment of appropriate duty; the onus devolves on the investigation agency to establish that duties had been evaded on the impugned goods and not by mere presumptive, and circumstantially contrived, supposition from a 'free floating' allegation. 5. It is against this backdrop of insufficiency of imputation of breach of obligation, of contradiction in factual narration and of unsupported inference of nature of the impugned provision of Cust....
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....that it was owing solely to having failed to ascertain correctness of information that client was emboldened to set out in this act of overvaluation. The licencing authority also appears to have misconstrued the nature of the obligation which is not about dissemination of incorrect information but of failure to ascertain correctness of information which must, necessarily, be built upon information given, either of own volition or on request of client, that was not only not incorrect but communicated without taking steps to ascertain correctness thereof. The notice, inquiry report and impugned order are markedly lacking in such determination. Even as saving grace, there is no factual narration of any information that led to alleged overvaluation. Thus it is that regulation 10(e) of Customs Broker Licencing Regulations, 2018 has been incorrectly held as proved. 8. The alleged breach of obligation to forbear from withholding information contained in any order, instruction or public notice from a client who is entitled to receive them has been established with the finding that details of local procurement said to be prescribed in circular no. 16/2009-Cus dated 25th May 2009 wa....
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....ated antecedent checks and verification of the client and the finding of it having been proved is founded on a statement of the exporter that such verification had not been carried out. It was incumbent on the investigation to have confronted the appellant with this accusation but no attempt was made so to do. It is also surprising that after such elapse of time, the exporter was able to recall lack of physical verification even as he was unable to recollect details of purchase channel. Not only does such selective remembrance lack verifiability but also relegates its acceptability to the periphery. In the context of limited benefits derived, and none at all in the consignments handled by the appellant, by the exporter and lack of any evidence of such negligence in the part of the appellant, we are unable to accept the conclusion of not having been diligent in antecedent verification. As we have already premised, it was much too late, and the stakes were much too little, for conducting any worthwhile investigation. To erect such a charge on such fragile foundations is sure recipe for it to fail to find favour. Thus, there is no basis for alleged contravention of regulation 10(n) of....