TaxTMI 
TaxTMI 
2025 (10) TMI 509
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....vember, 2020, the Directorate Of Revenue Intelligence (hereinafter, 'DRI'), Vijayawada had suspected some misdeclaration in respect of a consignment of one of the Appellant's customers, namely, M/s Hiba Enterprises. It was realized that the misdeclaration was in respect of certain Set Top Boxes which were being exported. 4. Upon issuance of the summons to the Appellant, one of the Senior Managers of the Appellant i.e., Mr. Ajay Sharma who was in-charge of the Delhi office appeared for recording his statement. Mr. Ajay Sharma in his statement had stated that the shipping bills were provided for export by one Mr. Vikas Joshi. The Import Export Code (hereinafter, 'IEC') of the customer of the Appellant i.e., M/s Hiba Enterprises was used for exporting the consignments. The statements of the other employees of the Appellant and Mr. Yusuf Khan, proprietor of M/s Hiba Enterprises was also recorded by the Department. 5. The Appellant who was the employer issued a Notice of termination on 10th December, 2020 to Mr. Ajay Sharma. He was also suspended from his employment. 6. Finally, the SCN was issued on 20th October, 2021 to the Appellant by the Customs Department. Vide the Order-....
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....aken by the Appellant in respect of its employee's activities. 11. It is further submitted that the Custom Broker Licensing Regulations, 2018 (hereinafter, 'CBLR') imposes stringent conditions upon CHAs and the Customs Department fully rely upon the said CHAs in respect of verification of documents, verification of the identity and credibility of the persons who are importing and exporting. Considering their duties in terms of the CBLR, the impugned order is justified. 12. Heard. It is relevant to note the Mr. Ajay Sharma's voluntary statement given to the Customs Department. The relevant portion of the statement reads as under: "12. In response of the Summons dated 09.12.2020 Shri. Ajay Sharma, Senior Manager (ID No. 015324), appeared before Superintendent of Customs (SIIB-Exp), Air Cargo, Export, New Delhi on 09.12.2020 and tendered his voluntary statement dated 09.12.2020 (RUD-1) in respect of the investigation being conducted regarding the consignment covered under Shipping Bill No. 6884966 dated 01.12.2020 & 6921244 dated 02.12.2020 under AWB 023-6802-1494 & 023-6802-1505, respectively filed on behalf of M/s. HIBA Enterprises (IEC-AJXPK4569N), F/F, 2983, Kucha N....
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....ast worked for Mr. YUSUF KHAN and at that time his firm name was M/s Y.K. Enterprises (IEC No.0598031341 dated 07.09.1998). (vi) On being asked regarding details of KYC of M/s HIBA Enterprises, he [Ajay Sharma - Senior Manager] stated that the KYC documents in respect of M/s HIBA Enterprises (IEC-AJXPK4569N dated 18.04.2018) were not obtained as they have the KYC of his earlier firm namedM/s Y.K. Enterprises (IEC No.0598031341 dated 07.09.1998). (viii) Further on being asked who else was aware in his company of the fact that exports were facilitated without obtaining KYC, he [Ajay Sharma Senior Manager] stated that he is responsible however ultimately his "MD is responsible". xxx 14. (ii) On being asked whether he used IEC of any other firm other than M/s HIBA ENTERPRISES for facilitating non-registered exporters for exporting their goods and in this regard, he stated that he has not used any other IEC for exporting nonregistered exporters for exporting their goods. Further, he stated that he has utilized the IEC of M/s HIBA ENTERPRISES for the period starting from second half of May 2019 and continued with till date. xxx (iv) t....
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....d. In addition, it is also clear that some part of the activity was being done by the said employee through the company. Insofar as filing of documents was concerned, he did misuse the third party's IEC i.e., of M/s Hiba Enterprises. 15. While on the one hand there can be doubt that the employee was the person who may have been indulging in these incorrect activities, the Appellant also had a responsibility being a CHA to exercise supervision and due diligence and could not have completely allowed misuse in this manner. 16. However, the law in this regard is also well settled that the principle of proportionality would apply in such cases. This has been so held by this Court in M/s. Ashiana Cargo Services v. Commissioner of Customs (I&G), 2014:DHC:1413-DB where it has been observed as under: "8. The issue before the Court is the proportionality of the penalty awarded in this case. The CHA Regulations prescribe two penalties: suspension of the license for a particular period of time, and revocation of the license, such that it irretrievably loses its currency. Once the Commissioner reaches a decision, the CESTAT, and this Court, would not ordinarily interfere with the....
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....ificance as action is under a fiscal statute, and may ultimately lead to a civil death." XXXX XXXX XXXX 11. Viewing these cases, in the background of the proportionality doctrine, it becomes clear that the presence of an aggravating factor is important to justify the penalty of revocation. While matters of discipline lie with the Commissioner, whose best judgment should not second guessed, any administrative order must demonstrate an ordering of priorities, or an appreciation of the aggravating (or mitigating) circumstances. In this case, the Commissioner and the CESTAT (majority) hold that "there is no finding nor any allegation to the effect that the appellant was aware of the misuse if the said G cards", but do not give adequate, if any weight, to this crucial factor. There is no finding of any mala fide on the part of the appellant, such that the trust operating between a CHA and the Customs Authorities (as a matter of law, and of fact) can be said to have been violated, or be irretrievably lost for the future operation of the license. In effect, thus, the proportionality doctrine has escaped the analysis. 12. Learned Senior Standing Counsel for the C....
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....cial Member, Ms. Archana Wadhwa, is restored, and the revocation of the license of the appellant is quashed. There shall be no order as to costs." 17. The decision in M/s. Ashiana Cargo Services (Supra) was followed by this Court in the decision in Commissioner of Customs (Airport and General) v. M/s Jaiswal Import Cargo Services Ltd, 2025:DHC:7566-DB. This Court in the said decision held as under: "16. In addition, ld. Counsel for the Respondent on instructions submits that as a matter of retribution, the Respondent is willing to contribute a sum of Rs. 4 lakh towards some good cause. Taking this statement on record, this Court is of the opinion that the suspension of 13 months and with payment of Rs. 4 lakh, the SCN proceedings can come to an end. 17. The appeal along with the pending application is disposed of with the following directions: (i) The Respondent shall deposit, within four weeks, a sum of Rs. 4 lakh in the following manner: i. Rs. 2 lakh to be deposited with the Customs Department. ii. Rs. 1 lakh to the Delhi High Court Legal Service Committee. Name: Delhi High Court Legal Services Committee Bank: UCO....