TaxTMI 
TaxTMI 
2026 (3) TMI 1163
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....herefore ordered as above mentioned. 2. The primary charge against the appellant, stems out of the case of export of 'Human Hair (Unprocessed)' by an exporter, by name M/s. S.S. Impex by undervaluing the same; the appellant being the Customs Broker in the said matter having processed and facilitated exports under cover of Shipping Bill No.7926810 dated 15.01.2021 which was interdicted by the authorities. Conducting detailed investigations into the matter, the department found that in past also several similar consignments of export of Human Hair by the said exporter were undertaken. In some of these export shipments the present appellant was the nominated Customs Broker on record. Through its investigations the department arrived at the conclusion that the exporter in the present matter was not traceable and therefore non-existent. They have thus inter alia also held out the Customs Broker to be the Exporter, in the matter. 3. The Ld. Counsel for the appellant, has submitted that it would be a fallacy to claim that the exporter was non-existent. He submits that the DGFT authorities have issued to the exporter a valid IEC No.BOCPB2356H (to which upon query from the Bench, the ....
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.... 4427393 25.05.2019 62 4427607 25.05.2019 63 4428901 25.05.2019 64 4428935 25.05.2019 65 4480422 28.05.2019 66 4480437 28.05.2019 67 4480438 28.05.2019 68 4601889 01.06.2019 69 4601961 01.06.2019 70 4603049 01.06.2019 71 4603102 01.06.2019 72 4624883 03.06.2019 73 4624970 03.06.2019 74 4626466 03.06.2019 75 4727536 07.06.2019 76 4727568 07.06.2019 77 4727599 07.06.2019 78 4727706 07.06.2019 79 4823207 12.06.2019 80 4823212 12.06.2019 81 4901671 15.06.2019 82 4902916 15.06.2019 83 4960651 18.06.2019 84 4960768 18.06.2019 85 4962132 18.06.2019 86 4962288 18.06.2019 87 4962294 18.06.2019 88 5064875 22.06.2019 89 5064878 22.06.2019 90 5064879 22.06.2019 91 1556886 26.06.2019 92 1557728 06.06.2019 93 5185288 27.06.2019 94 5185738 26.06.2019 95 5186251 27.06.2019 96 5281150 02.07.2019 97 5281207 02.07.2019 98 5326562 03.07.2019 99 5327257 03.07.20....
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....0 175 6515502 12.11.2020 176 6669986 20.11.2020 177 6670443 20.11.2020 178 6807409 27.11.2020 179 6811132 27.11.2020 180 6813102 27.11.2020 181 6989625 04.12.2020 182 6990310 04.12.2020 183 7126236 10.12.2020 184 7630972 02.01.2021 4. The appellant Customs Broker had only undertaken a total of eight shipments of Human Hair, for the said exporter, as per details below : SL.NO. S/B NO. S/B DATE 1 7313344 18.12.2020 2 7313561 18.12.2020 3 7313652 18.12.2020 4 7455964 24.12.2020 5 7456031 24.12.2020 6 7628348 02.01.2021 7 7768586 08.01.2021 8 7926810 15.01.2021 5. The Ld. Counsel further submits that the exporter also possessed a valid CGST number and which as per his information was very much in existence and operative to the present date, despite the impugned allegation/finding of the department of the exporter being nontraceable. He thus submits that....
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....ary in nature. Accordingly, the authorities are directed to complete the disciplinary proceedings within a period of three months from date after appointing a new officer for completing the said investigation." 9. A perusal of the High Court's order would however reveal that the hon'ble High Court found the action of the authorities in holding up the disciplinary proceedings as 'arbitrary', with no proper explanation given as to why the enquiry could not be carried out, within the timelines as prescribed. It had held the Revenue's contention of transfer of officer as 'not a good ground' and has therein recorded as below : "The factual matrix of the case is that the petitioner was suspended for violating certain provisions of the CBLR, 2018 which was confirmed subsequently by the authorities. However, the authorities are failed to complete the disciplinary proceedings within the period provided. In fact, it is to be noted that the period would have come to a conclusion in the month of August 2021 but no progress whatsoever has been made with regard to the enquiry till the date of filing of this writ petition, that is, on July 28, 2022. From a bare perus....
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....as thus clear that the said authority had cursorily and in a casual, routine and a pre mediated manner undertaken the said inquiry without even bothering to take cognizance of their submissions and their part of the say in the matter. As is apparent and quite obvious, at this juncture, we would simply like to observe that the Inquiry Officer's report suffers from an incurable infirmity and hence invalidated. It therefore cannot be of any consequence, as its determination indeed is shallow and without taking due note of the defence's claim. The ld. Counsel further points out that despite having pointed out the aforesaid to the Disciplinary Authority, the said Disciplinary Authority chose not to relook thereinto or get the matter investigated afresh and overlooking the said submission completely relied upon a fallacious Inquiry Officer's report. 12. The Ld.AR, appearing on behalf of the Revenue, in support of his contention has submitted that no foreign remittance has been received in respect of the shipments made vide impugned export as per the information available on the DGFT's website and therefore the impugned shipments were malafide, there being no genuine exporter. 13. W....
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....ppellant, we are of the view that the present case of the department is based completely on assumptions and surmises. The Revenue has no shred of evidence to specifically pinpoint that the appellant was the exporter per se himself, even if he may not be found foul of any legal provisions. Moreover, it baffles imagination as to when the exporter is entitled to financial incremental benefits and incentives doled out by the government like RoDTEP & Drawback what an exporter would stand to gain by undervaluing the goods. This essential question remains unanswered even by the department. It appears that prima facie, not being able to lay their hands on the exporter, the revenue has arrived at a fanciful assumption that the exporter and the Customs Broker were one and the same person and carved out twin identities of the appellant. 15. Presuming wide scale undervaluation by the appellant Broker, alleging him to be an exporter of the undervalued goods, the authorities had in terms of Regulation 16(1) suspended the licence of the Customs Broker with immediate effect with an opportunity of post-suspensional hearing on 19.05.2021. 16. We note and as established from records that the au....
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....d distinct identity, the Customs Broker cannot be adversely implicated and inferred so. All that the law warrants the Customs Broker is to take reasonable precautions to ascertain the identity of his client. The KYC documents as obtained by the appellant, to our mind were sufficient enough to meet the requirements in law. In the maze of phenomenal evidence of both private entities as well as Government bodies having issued various documents to establish the existence of the exporter, it does not behove the authorities to discredit their own agencies without any positive piece of testimonial/documentation/proof or evidence. 18. We find that the Revenue is in utter default of the timelines as stipulated under Regulation 17 in the processing of enquiries and execution of their action. At best the support drawn by the authorities to arrive at the fact of the exporter being non-existent/non-traceable is no more than a hearsay evidence. Various questions like foregoing of admissible export incentives, were the department's claim of undervaluation justiciable, or reasons for a far larger number or exports made through other Customs Brokers amongst several others remain unanswered. Ther....
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....l in the said case that if the documents furnished by the exporter importer prima facie appear to be bonafide, there is no reason for the Customs Broker to undertake a detailed verification so as to verify the contention of the said documents. This aspect of documentation has not been adversely challenged by the Revenue in the present appeal. 22. The Hon'ble Delhi High Court in the case of Kunal Travels (Cargo) v. CC (I & G), IGI AIRPORT, New Delhi [2017 (354) E.L.T. 447 (Del.)] with regard to the obligations of a Customs Broker in no less uncertain terms, observed that the Customs Broker - "..........are processing agent of documents for clearance of goods through Customs House - They are not inspector to weigh genuineness of transaction, and there is no obligation to look into information from exporter/importer - it is onerous to expect CHA to inquire into and verify genuineness of IE Code given by client for each import/export transaction - When such code is mentioned, there is presumption that appropriate background check in this regard would have been done by Customs authorities." 23. It is therefore clear that the authorities have transferred the inappropria....