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2016 (12) TMI 376 - CESTAT MUMBAI

2016 (12) TMI 376 - CESTAT MUMBAI - TMI - Revocation of the CHA Licence - forfeiture of the entire amount of security deposit - violations of provisions of CBLR 2013 - Embroidery Machine Needles imported from China - Evasion of ADD - mis-declaration of quantity of needles - needles was misdeclared as 20,000 pieces instead 1,00,00,000/- of pieces - undervaluation of goods - Held that: - We find that there is no dispute that large scale evasion of anti dumping duty by the importer is established a .....

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nnot be established without getting it certified from the forensic expert which department has failed to do. Moreover there are other documents like certificate of registration from Maharashtra Sales Tax Department in favour of the importer 'M/s. Jai Ambey Impex' also submitted therefore the identity of the importer is not under doubt. The entire objective of taking authority letter and KYC is for the purpose to establish the identity of the importer. In the present case the importer is very muc .....

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sdeclaration of quantity and value of the goods, he advise the importer for payment of anti dumping duty when he felt that the importer is not complying his advise. He immediately withdrawn himself as CHA vide his letter dt. 10.5.2013 i.e. within four days of filing Bill of Entry. - As regard the mention by the Ld. Commissioner that the licence of the appellant was also revoked in the past, we are of the view that we cannot be influenced by any other case which is not before us. We have to c .....

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t a case of revocation of the licence of CHA - We therefore set aside the order and allow the appeal. - Appeal No.C/89009/14-MUM - Order No.A/93716/16/CB - Dated:- 7-11-2016 - Mr. Ramesh Nair, Member (Judicial) And Mr. C.J. Mathew, Member (Technical) Shri R.K. Pardesi, Advocate for Appellant Shri D.K. Sinha, Assistant Commissioner (AR) for respondent Per : Ramesh Nair This appeal arises from the order of the Commissioner whereby the Ld. Commissioner ordered for revocation of the CHA Licence of t .....

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forming that the Customs Broker has violated the provisions of CBLR 2013 (erstwhile CHALR 2004) and also proposing action against the Customs Broker under Regulation 19(1) of CBLR,2013 (erstwhile Regulation 20(2) of the CHALR, 2004). The brief facts of the case as informed by DRI are as follows: The officers of DRI examined the imported consignment under Bill of Entry No. 2045723 dt. 6.5.2013 loaded in container No. HDMU 6653869 of the goods namely Embroidery Machine Needles imported from China. .....

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t he had agreed to pay ₹ 4lakhs over and above the agency charges for customs clearance of the said consignment without the payment of anti dumping duty on the needles to Mr. P.P. Singh operating in the name of M/s. S.N.M Agency under Customs Broker No. 11/1481. Apart from the said misdeclaration, the goods imported are also found to be undervalued to the tune of 80% of the actual value. On the investigation it was revealed that the above stated goods were imported by M/s. Jai Ambey Impex .....

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. S.N.M. Agency; he filed the bill of entry for the above consignment online; that he did not verify the invoices and scrutinize the documents and exercise due diligence in the said case; upon the system showing an error with regard to the serial number in the said notification Shri Manish Singh was directed by Shri B.P. Singh to remove the said entry and he would get the consignment cleared at the time of assessment from the Assessing Officer. In a Statement Shri B.P. Singh of M/s. S.N.M. Agenc .....

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e illicit import of goods in the name of dummy IEC and also facilitate/ attempted to facilitate evasion of large quantum of anti dumping duty for monetary consideration. The Customs Broker was also well aware of the quantity of the goods. The Customs Broker also admitted that they did not verify the actual importer. In view of the above Act, the Customs Broker M/s. Vinayak Shipping Services was charged for violation of Regulations 11 (a), 11 (b), 11 (d), 11 (e), 11 (f), 11 (i), 11 (m) and 11 (n) .....

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le for violation of Regulation 11 (a) of CBLR, 2013 (erstwhile Regulation 13(a) of CHALR 2004) in as much as the appellant has been handed over the import document by other Customs Broker, Shri P.P. Singh. Therefore they have not obtained the proper letter of authority from the importer. The signature of the importer on the authority letter was found to be different from the actual signature verified by the Bank therefore no authority letter was obtained. Article of Charge-Il In this article of .....

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his article of charge there is a violation of Regulation 11 (d) of CBLR 2013 by the appellant in as much as the appellant has not only kept himself away from giving a legal advise to the importer but it is one Shri Anuj, an employee of M/s. S.N.M. Agency and Shri P.P. Singh, who were co-coordinating with the importer. Therefore the appellant has not discharged their obligation as they have not advised the importer regarding the correct levy of anti dumping duty and proper declaration of the good .....

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000 pieces instead of 1,00,00,000 pieces of Embroidery Machine Needles. This was very much known to the appellant but they have not taken any effort to ascertain the correct particulars as well as thus violated the Regulation 11(e) of CBLR 2013. Article of Charge-V Under this article of charge the appellant appears to have violated Regulation 11 (f) of CBLR, 2013 inasmuch as the appellant was not in direct contact with importer and was conveying the problems arising during the filing of Bill of .....

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ustoms. Shri Manish Singh employee of the appellant admitted in the statement that the attempt to remove the entry of Notification of anti dumping duty as conveyed by Shri P.P. Singh on the assurance of Shri P.P. Singh that he will influence the assessing officer to get the goods fraudulently cleared. Hence, as per the inquiry officer it appears that the Customs Broker has violated Regulation 11 (i) of CBLR, 2013. Article of Charge-Vll In this article of charge it was proposed that the appellant .....

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this article of charge Regulation 11 (n) was alleged to have violated as per this Regulation, the Customs Broker shall verify antecedent, correctness of Importer Exporter Code (IEC) number, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. Shri Manish Singh in his statement dt, 12.6.2013 recorded under Section 108 has admitted that he has not verified by the documents which was handed over to hi .....

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report vide letter dc. 30.4.2014 according to his report after analyzing the entire facts reported that the appellant has prima facie violation of Regulations 11 (a), 11(b), 11(d), 11(e), 11(f), 11(i), 11(m) and 11(n) of CBLR, 2013 (erstwhile Regulations 13(a), 13(b), 13(d), 13(e). 13(f). 13(i). 13(n) and 13(o) of CHALR 2004). He further contended that arguments made in the reply and during the hearing which is contrary to the confession made in statement recorded under Section 108 of the Act, t .....

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Manish Singh were suo moto in the nature and not attached to himself and the employer, i.e. the appellant. In the said proceedings Shri Manish Singh was penalized to ₹ 2 lakhs on the sole ground that Shri Manish Singh did not verify the genuineness of the importer/IEC. Therefore for a particular negligence Shri Manish Singh was penalized therefore no charge against the appellant is established as no show cause notice under the Customs Act was issued to the appellant. They further submitted .....

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d forfeiture of the security deposit. The Ld. Commissioner held that all the 8 charges have been established and proved. The Ld. Commissioner also observed that the appellants licence in the past also revoked and the same was upheld by the Tribunal, therefore the appellant is an habitual offender. Being aggrieved by the Order-in-Original. The appellant filed this appeal. 2. Shri R. K. Pardesi, the Ld. Counsel for the appellant submits that the appellant had no role for the misdeclaration of desc .....

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t on the presumption that it is after thought it is completely erroneous. He submits that once the authorization was obtained by the appellant the violation of Regulation 11 (a) cannot be alleged. As regard the confessional statement of Shri Manish Singh retraction dt. 13.6.2013 was submitted. Accordingly, the case could not have been decided on the basis of the statement. He submits that the appellants produced copy of letter dt. 10.5.2013 addressed to Assistant Commissioner CFS that the import .....

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that the importer is dummy or is run away from the entire episode, therefore the rejection of indemnity letter is without any basis. He submits that once the malafide of the importer came to the notice of the appellant they immediately withdrawn themselves from the job of customs clearance of the consignment in question. Thereafter there is no violation of any Regulation of CBLR established against the appellant. In support of his submission he also placed reliance on the following judgments. (i .....

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er (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that the appellant has a tendency to indulge into fraudulent import as in the past also the appellant's CHA Licence was revoked and the Tribunal has upheld the revocation. As far as the present case is concerned the appellant conspired with other broker i.e. M/s. SNM Agency for clearance of the imported Embroidery Machine Needles by facilitating the importer evasion of huge anti dumping dut .....

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rance of the goods on behalf of the appellant. It is proved that the authority letter was fake as the signature from the authority letter not matching with the actual signature certified by the Bank. He submits that once it is proved that the appellant customs Broker is very well aware about the wrong doing by the importer then all the regulations which the Ld. Commissioner has held to be violated stand established. Therefore the Customs Broker has no legal and moral right to carry out the custo .....

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appellant Customs Broker is party to the evasion of such duty and misdeclaration committed by the importer. We have carefully gone through the various statement given by Shri P.P.Singh of M/S. SNM Agency, Shri Manish Singh an employee of the appellant and others. To understand the actual conduct of these persons related to CHA it is necessary to read their statements. "Statement of Shri P.P. Singh dated 5-6-2013 I say that on 1.5.2013, Shri C. P. Singh came to the office of S N M Agency at .....

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ted Antidumping duty of ₹ 1.50 per piece. There were about 1,00,00,000 needles in the said consignment and the anti dumping duty was coming to ₹ 1,50,00,000/-. However informed Kailashchand Jain that I will clear the consignment without payment of antidumping duty and for the same reason I demanded a sum of ₹ 4,00,000/- from him. I also informed him to pay at least 70% of the said amount i.e. ₹ 2,80,000/- in advance. I did not clear it through M/S. S N M Agency and contac .....

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Appraising Officer Mr. Mann regarding the quantity of sewing needles, what was the quantity per box, total number pieces etc. On 8.5.2013. I confirmed the number of pieces from the importer and learnt that the same was 1,00,000,00 pieces and I conveyed the same to o Manish Singh. The importer also conveyed that they would either reexport the needles and take the other items for clearance in home consumption or put the entire consignment in Bond. I conveyed the same to Manish Singh of M/s. Vinaya .....

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2,30,000/- in two installments i.e. ₹ 1,30,000/- in first time and ₹ 1,00,000/- in the second time and I paid the said two installment in or around 15.05.2013. Statement qf Shri B P Singh dated 21-5-2013 On being asked , I wish to state, that, on 6th May 2013request of Shri Manish Singh, employee of M/s Vinayak Shipping Services, who is my cousin uncle I went to the Appraising Officer to know about the status of the import consignment pertaining to bill of entry no. 2045723 dated 6.5 .....

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. Mann and conveyed to him that the importer is not ready to pay anti dumping duty, on the needles and therefore they (M/s. Vinayak Shipping Services) are withdrawing from the work of clearance of the said import Consignment, A letter dt 10.05.2013 addressed to AC Customs, CFS Mulund issued by M/s.. Vinayak Shipping Services stating the above facts Manish Singh telephonically conveyed to me that officers of DRI Mumbai will come and examine the said import consignment on 18.5.2013 and requested m .....

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ent, Manpada Road, Dombivli East), to which I acceded. At his house heshowed me a bill of lading no. HDMUNXAY 3011363 dated 18.3.2013, invoice no. YX20130395 dt 16.3.2013 issued by M/s. Shenzhen Pulaisdun Trading Co., Ltd., Chinain favour of M/s. Jai Ambey Impex and its packing list and told the same for customs clearance. Since I knew that he was into the business of customs clearance running in the name M/s. S N M Agency, I asked him as to why he was not clearing the import consignment of the .....

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e. asked for all the documents like authority letter, PAN. card, ration card, IT Return and Sales Tax Certificate of the IEC holder, which was given to me by P.P. Singh. On being asked that the description on the invoice is 500 PCS EMBROIDERYILACHEE NEEDLE", the number of cartons shown in the invoice is 200, the unit given in the invoice is Box and the total quantity shown is 20000, does not match, I say that I did not verify the same as did not, scrutinise it. On 3.5.2013 P.P.Singh sent on .....

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1.4.2013. On 3.5.2013 lfiled bill of entry, for the above import consignment online, which failed as an error was reflected on the system, which showed a wrong Port Code as well as the system was not accepting the declaration of needles in boxes and therefore on the same day (3.5.2013) I told P P Singh telephonically that the document could not be filed today due to the above two reasons of wrong port code and also that system does not accept the declaration of needles in boxes. P P Singh infor .....

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ave anti dumping duty and also that the notification in respect of antidumping duty has to be fed and in the entry at 500 PCS EMBROIDERY MACHINE NEEDLES , the unit has to be shown as pieces and not boxes as the invoice and packing list was quite confusing as it showed in boxes as 20,000. Then BP Singh told me telephonically that it is 20, 000 pieces instead of boxes and he has confirmed from the party that the correct entry is pieces. I filed online bill of entry on 6.5.2013 at around 12.30 PM a .....

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e same regarding query to P P Singh which he will call up the party and let me know. On 7.5.2013 I confirmed from P P Singh about the status of the documents to which the party has not confirmed to the number of on my mobile and told me that there were 1,00,00,00 pieces and told me that the party would either re-export the needles and take the other items for clearance in home consumption or put the entire consignment in Bond and as per the requirement the party would clear the consignment in pi .....

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consignment since the importer was not ready to adhere to the advice for levy of antidumping duty on needles and told him to hand over the said letter to AC Customs Mulund. On 11.5.2013 he (P P Singh) brought the acknowledged copy of the said letter. Statement of Shri Masnish B. Singh dated 12-6-2013 Further to my earlier statement dated 23.5.2013 I say that I have not verified the import documents bearing bill of lading no. HDMUNXAY 3011863 dated 18.3.2013, invoice no. YX20130395 dt 16.3.13 is .....

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ated by mistake due to poor memory. Now I would like to like to clarify that on 02.05.2013 Prem Prakash Singh (P P Singh) (9167347175), who resides on the same society in which I live and is also known to me since childhood, called me on my mobile and invited me to his house (Flat No. B/305, Hirai Apartment, Manpada Road, Dombivli - East), to which I acceded. At his house he showed me a bill of lading no. HDMUNXAY 3011863 date 18.3.2013, INVOICE NO. YX20130395 dt 16.2.20-13 issued by M.s, Dhenzh .....

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ot want to bring this import consignment to the notice of his brother B.P. Singh. I told him that I will file the bill of entry but physically I will not go to the docks for the clearance. to which he responded in the positive. I asked whether he knew the IEC holder personally. to which he replied in the positive I asked for all the documents like authority letter. "PAN card. ration card, IT Return and Sales Tax Certificate of the IEC holder which was given to me by P P Singh. On being aske .....

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to my office and took my sign and stamp' of M/s. Vinayak Shipping Service on the back side of the original bill of lading, and took the original bill of lading which was to be submitted to Hyundai Merchant Marine Pvt. Ltd" Andheri. The original Delivery Order In the name of M/s. Vinayak Shipping Services received by P P Singh which was informed by him (PP Singh). P P Singh conveyed to me the IGM No. of the was aforesaid import consignment through SMS. The IGM No. is 2289750 dated 1.4.2 .....

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and he told me to file it on the next working day, i.e. on 2013. I took out a print out of this import check list and gave it P P Singh at his residence on 4.5.13 and I also kept a copy with me. In the morning of 6.5.2013 at around 11.00 AM B P Singh (mobile no.8108688017) riled me telephonically on my mobile and told me that there has to be a correction in a check list and that the needles have anti dumping duty and also that the notification respect of antidumping duty has to be fed and in the .....

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tification of antidumping duty. I conveyed the same to B P Singh. to which he told me to remove the entry of notification of antidumping duty and at the time of assessment he at the same done from the AO Mr. Mann. I AM ALSO AWARE THAT ANY t/IPT TO INFLUENCE THE CONDUCT OF THE CUSTOMS OFFICER IS A VIOLATION UNDER REGULATION 13 OF CHALR 2004. From the above various statement it is clear that Shri P.P. Singh of M/s. SNM Agency was ware of the intent of evasion of anti dumping duty by the importer a .....

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orrectness and when finally he understood that there is a misdeclaration and intent of evading huge amount of anti dumping duty by the importer, he withdrawn himself from the job of clearance of said consignment. On careful reading of all the statements nowhere it suggests that the appellant was aware of the intention of evasion of the duty. As regard the statement of Shri Manish Singh dt. 12.6.2013 from the language thereof it appears that he was coerced to admit his lapse however there was no .....

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e appellant before accepting the job of clearance of the goods has taken authority letter from the importer. From authority letter and the verification of the signature by the bank, we do not see any difference in the signature. Moreover whether the signature is correct or not if there is any doubt the same cannot be established without getting it certified from the forensic expert which department has failed to do. Moreover there are other documents like certificate of registration from Maharas .....

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