TMI Blog2023 (1) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of Show Cause Notice to Customs Broker who has to file his defense within 30 days of receipt of said Show Cause Notice. Reverting to the facts of the present case, we observe that DRI proceeded based on the information about certain undervalued imports and conducted search at various premises of different importers based in Mumbai and Hyderabad on 12.04.2017. The goods recovered during those search were seized on 22.06.2017. But the requisite show cause notice could not be issued within six months, the time prescribed by the statute for the purpose. However, a show cause notice praying time extension under Section 110(2) of Customs Act, 1962 was issued on 06.10.2017 and the time was extended vide Order-in-Original dated 11.10.2017. It is department s case that the show cause notice of 11.04.2018 / offence report was received in Delhi, the Commissionerate of competent jurisdiction, only on 25.02.2019 and as such the show cause notice dated 23.05.2019 is well within the period of 90 days. In view of entire above discussion and in view of Regulation 17(1) of CBLR, 2018 and that the timeline prescribed under Regulation 17 being mandatory in nature, it is held that the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imports were for any other personal benefit of the appellant. From the above discussion about the documents and information of the importer, it is crystal clear that the CHA herein had played his role diligently. The only allegation otherwise about the imported goods is that of under valuation thereof. Appellant is not a valuation expert and had played no role in the under valuation of the goods. The appellant acted purely on the basis of documents as that of invoice/purchase orders supplied by the importers. The Commissioner has wrongly concluded that there is no evidence to rebut the veracity the statement of Shri Sidharth Sharma. It is rather observed that Shri Sidharth Sharma had submitted a letter dated 25.10.2017 on behalf of M/s. Maggie Marketing Pvt. Ltd. retracting his earlier statements but the order under challenge is miserably silent to the same. Mention of said retraction is even found recorded in subsequent statement of Shri Sidharth Sharma dated 08.11.2017, wherein, he acknowledged his retraction and reiterated that his earlier statements were given under pressure - the findings of adjudicating authority below are held to be based on presumptions and surmises only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal by a Customs House Agent (hereinafter referred as CHA) against the order of revocation of his customs broker license and an order of forfeiture of the whole amount of security deposit and imposition of penalty. The facts in brief for the present adjudication are as follows: 1.1 That the appellant was issued a Customs Broker License No. R-37/97 being valid up to 28.11.2026 by Commissioner of Customs, New Custom House, New Delhi. The appellant was also registered in Mumbai Customs, Ludhiana/Amritsar Customs, Visakhapatnam Customs, Noida Customs and Kandla Customs. A Show Cause Notice No. 68/2018 dated 22.05.2019 was served upon the appellant and some importers by DRI, DZU, Delhi, alleging under valuation of imported goods i.e. power tools of Dongcheng brand and other Chinese brand through various ports by certain importers controlled by Shri Yusuf Pardawala and Shri Sidharth Sharma. The appellant was alleged to have facilitated the import clearance work for those imported goods. The said show cause notice was served pursuant to the search operation dated 12.04.2017 at the premises (residential/official/godowns) of certain Mumbai and Hyderabad based importers including im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by DRI to M/s. Impex Steel Co., M/s. Maggie Marketing Pvt Ltd., Shri Sidharth Sharma, Director of M/s Maggie Marketing Pvt. Ltd. and to Shri Yusuf Pardawala on 18.10.2017. This Show Cause Notice was forwarded by Customs Mumbai to Commissioner of Customs (Airport General), Delhi vide letter dated 18.02.2019, received in Delhi on 25.02.2019. 1.4 Based on the entire investigation including the statements recorded during the investigation, Delhi Commissionerate alleged that the IEC of the importer firms viz M/s. Maggie marketing Pvt. Ltd., M/s. Safeboat Technologies, M/s. Honeywell Tradelinks Pvt. Ltd. and M/s. Emrick Distributors were used by the CHA/appellant for clearance of impugned consignments for some monetary consideration on commission basis. It was also alleged that despite being the CHA, appellant was required to verify the IEC used for clearance of imported consignments related to Shri Yusuf Pardawala. In spite of being well aware of the fact that the IEC of these firms was used for name sake only, the CB had facilitated the customs clearance for the imported consignments related to Shri Yusuf Pardawala thereby violating the provisions of Customs Broker Licen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h binding upon the adjudicating authority. The findings of original adjudicating authority are therefore highly barred by time and thus are liable to be set aside on this sole ground. Leaned Counsel has relied upon the decisions of Hon ble Supreme Court in the case of M/s. RDB Textiles Ltd. Vs. Commissioner of C. Ex. S.T., Kolkata-IV reported as 2018 (359) E.L.T. 433 (S.C.)and Commissioner of Customs, Calcutta Vs. Indian Oil Corporation Ltd. reported as 2004 (165) E.L.T. 257 (S.C.) 3.1 While submitting upon the merits, it is mentioned by learned Counsel for the appellant that the appellant has always conducted his business of being a customs broker by adhering to the provisions of customs act and the rules and regulation framed thereunder. He has fulfilled all requirements under CBLR and there is no case for revocation of his license. It is submitted that initially the license of the appellant was suspended in terms of Regulation 16 of CBLR, 2018. However, the said suspension was revoked vide Order-in-Original No. 56/2019 dated 24.04.2019. Learned Counsel emphasized that the grounds which led to the revocation of the suspension order are applicable to present show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le rebutting these submissions, learned DR has impressed upon the correctness and genuineness of the findings in the order under challenge. It is submitted that the statement of Shri Sidharth Sharma and Shri Yusuf Pardawala are sufficient to prove the involvement of the appellant. The questions raised during cross-examination of Shri Sidharth Sharma are nothing but an afterthought to misguide as has been rightly observed by the adjudicating authority below. The impugned order is impressed upon to have been based on the meticulous evidence in the form of documents recovered during search, retrieved from the gadgets recovered during search and in the form of statement of all concerned acknowledging their involvement. It is mentioned that Show Cause Notice dated 23.05.2019 is well within 90 days of receiving offence report in Delhi Commissionerate on 25.02.2019. The action taken cannot be said to have been hit by time bar of Regulation 17 of CBLR, 2018. It is also mentioned that proceedings for revocation of license are independent of proceedings for suspension of license under Regulation 16 of CBLR, 2018. The procedure under Regulation 17 of CBLR, 2018 can still continue even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty .- (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 Assistant Commissioner of Customs, as the case may be, shall, in the course of inquiry, consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Provided further that where an order is passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31. It is the basic principle of law long settled that if the manner of doing a particular act is prescribed under any Statute, the act must be done in that manner or not at all. The origin of this rule is traceable to the decision in Taylor v. Taylor (1875) 1 Ch.D 426 which was followed by Lord Roche in Nazir Ahmad v. King Emperor 63 Indian Appeals 372 = AIR 1936 PC 253 who stated as under: Where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all. 6.3 Also, the use of the language shall in the regulation cannot be termed as directory as one of the consequence of the action is the revocation of the licence and it would also pave way for inaction by the officials breeding corruption. The law in this respect has been settled by Hon ble Apex Court in Sharif-Ud-Din Vs. Abdul Gani Lone [AIR 1980 SC 303], by holding that the question whether a provision of law is mandatory or not depends upon its language, the context in which it is enacted and its object. The Court made an important observation as follows: In order to find out the true character of the legislation, the Court has to ascertain the object which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous portions of the Regulations. Regulations 17(1) prescribes a time limit of 90 days from the date of receipt of offence report within which action is to be initiated i.e. for issuance of Show Cause Notice to Customs Broker who has to file his defense within 30 days of receipt of said Show Cause Notice. 6.5 The appellants have also brought to the notice a circular bearing No.9/2010-Customs, dated 8-4-2010, issued by the Central Board of Excise and Customs, about clarification on procedures in issuance of notices to the CHAs and the time limit for completion of suspension proceedings against CHA/licensee in terms of Regulation 17 of CBLR, 2018 (the then Regulation 22) in para 7.1 thereof which reads as follows: 7.1 The present procedure prescribed for completion of regular suspension proceedings takes a long time since it involves inquiry proceedings, and there is no time limit prescribed for completion of such proceedings. Hence, it has been decided by the Board to prescribe an overall time limit of nine months from the date of receipt of offence report, by prescribing time limits at various stage of issue of show cause notice, submission of inquiry report by the Deputy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is never an evil. A Court has no power to ignore the provision to relieve what it considers a distress resulting from its operation. (See: The Martin Burn Ltd v. The Corporation of Calcutta, AIR 166 SC 529; and Rohitas Kumar Ors. v. Om Prakash Sharma Ors. AIR 2013 SC 30). In view of the above, we are of the candid view that none of the submissions advanced on behalf of the appellants is tenable. 6.7 Reverting to the facts of the present case, we observe that DRI proceeded based on the information about certain undervalued imports and conducted search at various premises of different importers based in Mumbai and Hyderabad on 12.04.2017. The goods recovered during those search were seized on 22.06.2017. But the requisite show cause notice could not be issued within six months, the time prescribed by the statute for the purpose. However, a show cause notice praying time extension under Section 110(2) of Customs Act, 1962 was issued on 06.10.2017 and the time was extended vide Order-in-Original dated 11.10.2017. It is thereafter that DRI issued a Show Cause Notice bearing No. 68/2018 dated 11.04.2018 to the Customs Broker/the present appellant. The said Show Cause No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is utmost bona fide and diligence on the part of the officers proceeding against the said alleged defaulter. Resultantly, the first issue as framed above is decided in affirmative holding that the timeline of Regulations is mandatory to be followed and Commissioner (Customs), Delhi has duly followed the same. Thus impugned show cause notice dated 23.05.2019 issued against the appellant is well within time. 7. Findings with respect to the Issue No.2 as framed above : Learned Counsel for the appellant on this issue had submitted that once the suspension of Customs Broker License of the appellant was revoked vide order dated 22.04.2019 under Regulation 16(2) of CBLR, 2018, the Commissioner could not have proceeded under Regulation 17 of CBLR, 2018 for revocation of the license. It is impressed upon that while following Regulation 16 of CBLR, 2018, the Commissioner could invoke Regulation 17 if and only if, instead of revoking the suspension of the license, he would had decided for license to remain suspended. These submissions have been rebutted by theLearned DR submitting that the proceedings under Regulation 17 of CBLR, 2018 are independent of the action taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e involving moral turpitude or otherwise. 7.2 The bare perusal of these regulations makes it clear that Regulation 14 of CBLR, 2018 deals with revocation of license or imposition of penalty. It provides that the Commissioner of Customs may, in accordance with the procedure as given in regulation 17, revoke the license of the Customs Broker and pass an order for forfeiture of part or whole of security on the grounds mentioned in the said regulation. Regulation 16 thereof deals with suspension of license. It provides that notwithstanding anything contained in regulation 14, the Commissioner of Customs, where an inquiry against the Customs Broker is pending or contemplated, may, in cases where immediate action is necessary, suspend the license of a Customs Broker. It also provides that in such a situation where the license has been suspended, a notice of opportunity of hearing has to be provided to the Customs Broker, whereafter the Commissioner of Customs may either revoke the suspension or continue with it. In a case where the Commissioner of Customs passes an order for continuing the suspension, further procedure thereafter shall as provided in regulation 17, be followed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egulation 16(2) of CBLR, 2018 cannot in any manner have any bearing on the findings recorded under Regulation 17. We draw our support from the decision of the Principal Bench of this Tribunal in the case of M/s. Green View Logistics Vs. Commissioner, Customs (Airport General)-New Delhi reported as 2021 (9) TMI 258 CESTAT NEW DELHI. 8. Findings with respect to the Issue No.3 framed as above: We observe that the basic allegation against the appellant/Customs Broker are that he was in connivance with Shri Yusuf Pardawala, the beneficiary of imported goods and Shri Sidharth Sharma, the Director of three importing firms and was very much aware that the Bills of Entry for clearanceof consignments were filed for the companies controlled by Shri Sidharth Sharma despite the consignments belonged to Shri Yusuf Pardawala. The appellant is specifically alleged to have used Import Export Code (hereinafter referred as IEC) of importer firms i.e. M/s. Maggie Marketing Pvt. Ltd., M/s. Safebot Technologies Pvt. Ltd., M/s. Honeywell Tradelinks Pvt. Ltd. and M/s. Emrick Distributors Pvt. Ltd. and facilitated customs clearance of consignments for Shri Yusuf Pardawala against some mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owner of these companies. He had facilitated clearance of goods imported by companies, Shri Sidharth Sharma who only had duly authorized the appellant for the same. Hence, it is clear that appellant ha valit authorization to act on behalf of the companies in whose names appellant filed the Bills of Entry. The alleged arrangement apparently and admittedly is between the importer and the beneficial importer for some commission to the importing firm, the appellant Customs Broker cannot be held liable for the same. However for alleged under valuation of imported goods the importer as well as the beneficial importer both can be prosecuted by the department. There is no evidence on record nor is the allegation that appellant was making any wrongful gain. Accordingly, we do not find any violation of regulation 10(a) as has been alleged against the appellant. 8.2 The violation of Regulation 10(d). Regulation 10(a) reads as follows: 10(d) advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of noncompliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition falsifies the statement that the import documents used to be received by the appellant through Shri Yusuf Pardawala directly. Shri Sidharth Sharma has further deposed, while being cross-examined, that he only used to send his own transport for taking delivery of goods. This deposition falsifies that appellant used to directly deliver the imported goods to Shri Yusuf Pardawala premises. The subsequent deposition during crossexamination that all goods imported in his companies belong to him (Shri Sidharth Sharma) and that he only used to place orders on his foreign suppliers after importing those goods and he only used to sell the same to Shri Yusuf Pardawala, later being a big business entities falsify entire allegations and findings against the appellant. 8.2.4 Shri Sidharth Sharma has specifically acknowledged, while being cross-examined, that his earlier statements were taken under coercion hence stands rebutted in the light of his crossexamination. This deposition of Shri Sidharth Sharma help us to conclude that the confirmation of allegations against the appellant based merely on the statement in chief of Shri Sidharth Sharma which has been rebutted by him duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llows: 10(n) verify correctness of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN), identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information; 8.3.1 We observe that there is no allegation of the department that the IEC (Importer Exporter Code) for the importers in whose name the Bills of Entry were filed by appellant/CHA were incorrect. The goods and service tax identification number GSTIN has also not been admitted to be the correct number of the said importers. Even the importers are not denied to be functioning at the declared addresses. Once the IEC and GSTIN is found to have been genuine even the importers were found existing at the declared addresses, mere allegation that some other person was importing goods in the name of the importers whose names were mentioned in the Bills of Entry does not render the identity of the importer as doubtful especially when there is an apparent arrangement, with mutual consent between the importer and the said other person, the beneficial owner of the imported goods. 8.3.2 There has been an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. 8.3.4 As already observed above that the cross examination of Shri Sidharth Sharma has not been taken into consideration by the adjudicating authority below. We hold that the Commissioner has wrongly concluded that there is no evidence to rebut the veracity the statement of Shri Sidharth Sharma. It is rather observed that Shri Sidharth Sharma had submitted a letter dated 25.10.2017 on behalf of M/s. Maggie Marketing Pvt. Ltd. retracting his earlier statements but the order under challenge is miserably silent to the same. Mention of said retraction is even found recorded in subsequent statement of Shri Sidharth Sharma dated 08.11.2017, wherein, he acknowledged his retraction and reiterated that his earlier statements were given under pressure. Thus, we hold that the statement which has been relied upon by the authorities to confirm allegations against appellant while revoking his license was actually a retracted version. As already observed above the crossexamination of the said witness, fully supports the case of appellant. The silence to retraction and cross-examination of witness is sufficient to set aside the order of revoking license and imposing penalty. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ient for us to hold that there was no role of appellant/CB in the mutual arrangement between Shri Sidharth Shama and Mr. Yusuf Pardawala. In fact it stands proved in record that the arrangement was never brought to the notice of appellant. Hence, there was nothing with appellant to hide from the department. Mere taking certain documents of importer from a person appearing on behalf of the importer who is otherwise validly existing at the declared address and having valid IEC and GSTIN. is highly insufficient to hold that CHA has failed in performing his duties of Customs House Agent deliberately. With these discussions we decide the third issue of adjudication in favour of the appellant holding that the Commissioner (Appeals) has wrongly confirmed the violation of Regulation 10(a), 10(d) and 10(n) of CBLR, 2018 against the appellant. 9. We further observe that learned DR has laid emphasis upon several case laws where the objective of Customs Broker License regulations has been appreciated and where Customs Brokers have been punished for the noticed fault. We have no reason to differ from the decision of Hon ble Apex Court in the case of Commissioner of Customs Vs. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g investigation even in his defense. Apparently the same is also not the fact of the present case. In the case M/s. Welcome Air Express Pvt. Ltd. Vs. Commissioner of Cus. (Airport Administration) reported as 2022 (380) E.L.T. 544 (Cal.), the CHA there had failed to obtain the authorization from the importer who had employed him as CHA and had failed to produce the said authorization before the customs authority when it was demanded. The appellant herein was duly authorized by the importing firm and provided all details of his importer client during investigation and all of those were found genuine. 12. In the case of K.V.Prabhakaran Vs. Commissioner of Customs, Chennai reported as 2019 (365) E.L.T. 877 (Mad.), the CHA therein had lent his CHA License to third party for usage without knowing the actual importer and goods to be imported and was just getting Rs.1000/- for each consignment. This also is not the fact of the present case. The appellant herein was in personal dealings with Shri Sidharth Sharma. All documents were being received from the importing firms only either through Shri Shidharth Sharma or through the freight forwarding company. In the case of Jasjeet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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