TaxTMI 
TaxTMI 
TaxTMI 
2025 (5) TMI 2014
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.... the CB license issued to the appellants for acting as a Customs Broker under Regulation 14 ibid and for forfeiture of entire security deposit furnished by the appellants. This order is the result of adjudication process of Show Cause Notice (SCN) No. 36/2022-23 dated 28.02.2023, seeking action against the appellants CB. The impugned order dated 24.05.2024, has been passed on the condition that such order shall come into effect, in case of any contrary decision is taken by higher appellate authority on the Order-in-Original CAO No. 08/CAC/PCC(G)/SJ/CBS Adj. dated 02.05.2024, providing for suspension of CB license and forfeiture of security deposit, which had already been passed by him. Besides this, in the impugned order, he had also imposed a penalty on the appellants under Regulation 18 ibid. Being aggrieved against the impugned order dated 02.05.2024, the appellants have filed an appeal being No. C/86934/2024 before the Tribunal. 2.2 While the order of the learned Principal Commissioner of Customs vide Order-in-Original No. 08/CAC/PCC(G)/SJ/CBS Adj. dated 02.05.2024 is in operation, in one another show cause proceedings, the impugned order dated 24.05.2024 has been passed by th....
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....tary statement dated 23.03.2022 had stated that their CB firm handled mainly import consignments; the aforesaid export consignments in respect of the said three exporters were handled by one Shri Atul. P. Thakkar, who was looking after the business of the CB firm, in its former name & style viz., M/s Popatlal Jetshi & Co. After his resignation from the firm on 04.01.2016, and having joined by M/s TICC Container Line (I) Pvt. Ltd., the export transactions of those exporters were not handled by the appellants. From the investigation conducted by the SIIB(X) and offence report in the form of SCN dated 15.11.2022 received from SIIB(X), the jurisdictional Principal Commissioner of Customs (General), Mumbai-I had concluded that there is a prima facie case against the appellants for having contravened Regulations 10(d), 10(e), 10(f) and 10(m) of CBLR, 2018. Accordingly, they had initiated show cause proceedings by issue of notice No. 36/2022-23 dated 28.02.2023 for initiating inquiry proceedings under Regulation 17 ibid, against violations of CBLR as above. 2.4 Upon completion of the inquiry, a report dated 12.07.2023 was submitted by the Inquiry Authority concluding that all....
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.... 02.05.2024 under Regulations 17(7), 14 and 18 ibid, for revocation of CB License of the appellants and for forfeiture of entire amount of security deposit, besides imposition of penalty on the appellants. Feeling aggrieved with the impugned order, the appellants have also preferred this appeal being No. C/86934/2024 before the Tribunal. 3.1 Learned Advocate for the appellants contends that all the allegations of violation of Regulations 10(d), 10(e), 10(f) and 10(m) of CBLR, 2018 in both the cases have been countered by them. One of the main arguments advanced by the Learned Advocate against the impugned order dated 02.05.2024, is that learned Principal Commissioner himself had initially revoked the suspension ordered under Regulation 16(1) ibid vide Order dated 31.01.2023. He further stated that for all S/Bs, the appellants have filed the declarations as per the documents provided by the exporter; they do not have anything with respect to valuation of export goods. Further, all the exports in various S/Bs have been duly assessed by the Customs officers and Let Export Order permitting such exports were given for export out of the country under Section 51 of the Customs Act, 1962.....
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....iture of security deposit in the impugned orders and stated that the same are sustainable in law. 5. We have heard both sides and perused the case records. 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 are Regulations 10(d), 10(e), 10(f), and 10(m) of CBLR, 2018, and hence there are certain distinct charges framed against the appellants. 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 export of goods. These regulations are extracted and given below as follows: "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 Commissioner of Customs, as the case may be; (e) exercise due diligence to ascertain the correctness of any information whic....
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....act 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 writing to the Customs Broker within a period of ninety days from the date of receipt of an offence report, stating the grounds on which it is proposed to revoke the license or impose penalty requiring the said Customs Broker to submit within thirty days to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defense and also to specify in the said statement whether the Customs Broker desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs. (2) The Commissioner of Customs may, on receipt of the written statement from the Customs Broker, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, to inquire into the grounds which are not admitted by the Customs Broker. (3) The Deputy Commissioner of Customs or Assis....
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....ilty 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 imposing penalty as provided in regulation 18: Provided that where an order is passed against an F card holder, he shall surrender the photo identity card issued in Form F forthwith to the Deputy Commissioner of Customs or Assistant Commissioner of Customs. (9) Where in an offence report, charges have been framed against an F card holder in addition to the Customs Broker who has been issued a license under regulation 7, then procedure prescribed in regulations 16 and 17 shall be followed mutatis mutandis in so far as the prescribed procedure is relevant to the F card holder: Provided that where any action is contemplated against a G card holder alone under these regulations, then instead of authority referred to in sub-regulation (8), a Deputy Commissioner or Assistant Commissioner rank officer shall pass such order as mentioned in the said sub-regulation along with debarring such G card holder from transacting the business under these regulations for a period of six months from such order....
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....in 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 already suspended, then the same can be further revoked in continuation of such suspension or the said suspension itself can be revoked. Further, such order under Regulation 17(7) ibid, has to be specific and is feasible to be implemented on the date of the issue of such an order. There is no express legal provision for revocation of a CB license, that is already revoked by an earlier order issued under Regulation 17(7) ibid. In other words, there can be only one order for revocation of the CB license, as it purports to cancel the existing CB license. It is also to be noted that there is no legal provision under Regulation 17(7) ibid, for issue of an order as 'deemed revocation of CB license' in order to take into effect on a future date, in case the earlier order of the same authority is set aside in any appellate forum, immediately with effect from such order of the appellate authority. It is a fact that on the da....
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....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 Licencing Regulations, 2018 which was, however, revoked after post-decisional hearing by order of 10th March 2023 though, oddly, only after issue of notice under regulation 17 of Customs Broker Licencing Regulations, 2018 on 9th March 2023 proposing action under regulation 14 and regulation 18 of Customs Broker Licencing Regulations, 2018. The lack of clarity on the part of the licencing authority about the client in connection with which breach of obligations on the part of 'customs broker' occurred does place the integrity of the final disposal now impugned before us in jeopardy and the strategy to rescue it from the brink by revocation of suspension in anticipation of challenge to proceedings does not, from manifest lack of clarity which is anathema to the seriousness of recourse to detriment empowered by the Customs Broker Licencing Regulations, 2018,....
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....nt 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 others while affirming that no one had physically verified their address. From these, it would appear that the cornerstone of the case against the appellant are reports portraying overvaluation and of non-verification of address of exporter......... The jeopardy to the proceedings, from not connecting those 'factual dots' in the proceedings of inquiry and before the licencing authority, appears to have been underestimated rather glaringly. 4. Normally, the offence in import or export leading to proceedings for termination of licence to practice a profession are not scrutinized by us but here a different set of circumstances presents itself. Exports of 2012-17 are impugned in investigations that was, initially, found to warrant recourse to 'suspension' in 2022 and in which investigations had been underway since 2015. The allegation of overvaluatio....
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.... 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 Customs, Central Excise and Service Tax Drawback Rules, 1995 that the submissions of both sides must be examined. Even so, we may make bold enough to say that the benefit, even if 'undue', derived by the exporter is not of such gravitas as to merit revocation of licence to practice a profession and, more especially, when the licencing authority itself appears to have discountenanced proper conjecture of the provision of law that supposedly made the impugned goods offending...... 6. We find that, insofar as the charges are concerned, the impugned order has put together unrelated facts and rendered findings that, consequently, are illogical and untenable. It is seen that the charge of not having advised the client to comply with Customs Act, 1962 and rules and regulations thereof is not founded on any allegation that advice sought had not been rendered and ....
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....bsp; 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 was in breach; however, this fact had not been set out in the notice issued to appellant. There is also no reference to the said circular in the report of the inquiry officer. It would, thus, appear that the inspiration which prompted the licencing authority to refer to this mandate was not tested by offering opportunity at any stage to explain irrelevance of its contents to 'free shipping bills' filed for exports by the appellant or to explain that it had indeed been provided. This is tantamount to introduction of evidence after conclusion of all proceedings in which appellant had participated and is, this, untenable basis for upholding the charge of having breached regulation 10(f) of Customs Broker Licencing Regulations, 2018. 9. The allegation that the appellant had failed to maintain records and accounts has been upheld on the findings that appellan....
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....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 Customs Broker Licencing Regulations, 2018, as found in the impugned order, to be affirmed by us. 11. The charges of breach of regulation 10 of Customs Broker Licencing Regulations, 2018 do not sustain. There is no case that the goods had not been exported or evidence even that the impugned goods had not been manufactured out of duty paid inputs. The drawback involved in all the exports during the said period by M/s World Wide Export is not of such high order as to warrant penalties and detriments that were heaped upon them in the impugned order and those handled by the appellant were not under any claim at all. In these circumstances, we find ourselves unable to uphold the impugned order which is set aside to allow the appeal." Therefore, in the present appeals before us too, the findings of the learned Principal Commissioner in respect of charges a....
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....h type of goods, a drawback schedule is notified by the Government which indicates the drawback for each type of goods usually as a percentage of the Free on Board7 value. For some goods, the rate could be on per piece basis and on some goods, the duty could be as a percentage of FOB with a value cap and in such cases even if the FOB value is higher, drawback will be paid only on that amount. The appellant had filed the Shipping Bills as per the documents provided to it by the exporter. According to the Revenue, by filing Shipping Bills with over-invoiced export values, the appellant violated Regulation 11(d). To consider this assertion of the Revenue, we examine the significance of the value in the export documents and who can determine it and if the appellant had any right to determine the value of the goods being exported. 8. A perusal of the Section 2(2) of the Customs Act shows that the determination of value in the Bill of Entry or Shipping Bill is a part of assessment. It reads as follows: (2) "assessment" means determination of the dutiability of any goods and the amount of duty, tax, cess or any other sum so payable, if any, under this Act or under the Customs Tariff....
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....cases of exports, the proper officer can, under certain circumstances, reject the transaction value under Rule 8 of the Export Valuation Rules and redetermine the value by comparison (Rule 4), through computation (Rule 5) or through a residual method (Rule 6). 10. It needs to be noted that when the officer rejects the transaction value and determines the value of the imported goods or export goods under the Rules, he re-determines the value to calculate duty under the Customs Act. He does not and he cannot change the transaction value (be it under FOB, CIF or C&F) which is the consideration paid or payable for the goods as between the importer and exporter. The officer is a stranger to the contract between the importer and exporter and has no locus standi to change the transaction value. 11. Thus, while the transaction value is decided between the exporter and importer, value for determining the duty under the Customs Act is a part of assessment. The power to assess including determining the value lies with the importer/exporter (self-assessment) or with the proper officer (reassessment). The Customs Broker has neither any authority nor any responsibility to assess the value ....
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....appreciate the manner in which the impugned orders have been passed on the same appellants CB for two times, each time repeating the action of ordering revocation of the CB license, forfeiture of security deposit and imposition of penalty directing the appellants to surrender the license and other identity cards issued to the persons working with the appellants. It is also a fact on record that these two orders dated 02.05.2024 and 24.05.2024, had been passed within a period of 3 weeks interval, successively, offering personal hearing to the same appellants CB. These could only indicate that such orders have been passed in a very mechanical way, by the licensing authority. Further, the learned Principal Commissioner was aware of the ongoing inquiry proceedings in this case, when he was passing the order on 02.05.2024, as the first action of immediate suspension vide Order No.67/2022-23 dated 11.01.2023, and post-decisional hearing and passing an adjudication order vide Order No.72/2022-23 dated 31.01.2023 was common in both the impugned orders, as it is at that stage of initiating regular proceedings under CBLR, 2018 two different SCNs were issued on 28.02.2023 and 17.03.2023 for t....