TMI Blog2023 (9) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... no violation of the principles of natural justice in denying the appellant an opportunity to cross examine the two witnesses in view of the voluntary confessional statement made by him under section 108 of the Customs Act. Violation of the Regulation 1(4) of CBLR - HELD THAT:- The submission of the appellant and relying on the statement made by the appellant under section 108 cannot be agreed since he did not have much business in his Customs Broker firm and Sh. Atul Kapoor had contacts with various importers but since he did not have the F-Card therefore, he provided Customs Broker License to him for monetary consideration. This is sufficient to hold that the appellant had sublet his Customs Broker License for monetary gain and thereby violated the provisions of Regulation 1(4) of CBLR, 2018. Violation of the provisions of Regulation 10(a), 10(d), 10(e) and 10(n) of CBLR, 2018 - HELD THAT:- It is clear that on the date when the appellant appeared to give his statement, he did not produce the relevant documents. We would like to point out the statement made by the appellant on issue No. 9 where he was asked about the KYC documents of the said firms and he categorically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount deposited by the appellant is confirmed - Penalty under Regulation 18 of CBLR of Rs. 50,000/- imposed on the appellant is affirmed. Appeal allowed in part. - MS. BINU TAMTA, MEMBER (JUDICIAL) AND MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Sh. B. L. Garg, Advocate for the appellant Sh. Nagendra Yadav, Authorised Representative for the respondent ORDER Challenge in this appeal is to the Order-in-Original No. 64/ZR/Policy/2022 dated 16.11.2022 whereby the Customs Broker License of the appellant was revoked, the security deposit was forfeited and penalty of Rs. 50,000/- was imposed. 2. The appellant has been issued Customs Broker License in the year, 2010 by the Commissioner of Customs (Airport General), New Delhi, which is valid upto 22.11.2029. The letter dated 25.02.2022 was issued by the Additional Director, Directorate of Revenue Intelligence (DRI), Delhi Zonal Unit (DZU) regarding violations committed by various Customs Brokers, namely M/s Sanjeev Kumar, M/s Expert Cargo Movers, M/s Anurag Tiwari, M/s Anubhav Cargo Movers, M/s Phenomenal Logistics and Shyam Singh, the appellant herein, in relation to gross mis-declaration and undervaluation in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Mobile No.9810440317) and Atul Kapoor (Mobile -9810696222) and other related documents and images. On his directions, I also deleted the WhatsApp conversation between myself and Shri Sanjeev Yadav (Mobile No.9810068863) other employees of Atul Kapoor namely, Sidharth Sharma (Mobile No.9582778283). Question-7 Please inform how do you know Shri Atul Kapoor? Answer-7 I state that I came in contact with Shri Atul Kapoor aka Atul Kumar Kapoor in year 2014 as we both were working in Air Cargo Complex, Delhi. He informed me that he did not have customs broker licence and asked me to provide my customer broker licencee to him for a monetary consideration. I state that I provided my Customs broker licence to Shri Atul Kapoor, who initially used to pay Rs.25,000/- per month to me for using my license . Worked with Atul Kapoor at his office till year 2019. I state that Shri Atul Kapoor used to file documents with Customs for import of goods in various firms, using my licence from the year 2014 to 2019. Thereafter, he stated using customs broker licence of M/s. Anubhav Cargo Movers, Noida (Prop. shri Deepak Kumar) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sh. Atul Kapoor. I further state that Sh. Atul Kapoor (Mob. No. 9810696222) filed the Bill of entry on my behalf in my customs broker license for imports in the firms M/s A O Exim, M/s Alfa Overseas, M/s Meena Prints, M/s R J Overseas, M/s R.K. Overseas, M/s Vijay Overseas, M/s Globle Enterprises, M/s Goodluck Exports, M/s S.M. International, M/s Sanjay International, M/s Sharma Overseas and M/s Z. K. Overseas. Question-12 Please inform which goods were imported by the above-mentioned firms. Answer-12 I state that I do not know anything about the goods imported in M/s. A O Exim, M/s. Alfa Overseas, M/s. Meena Prints, M/s. R J Overseas, M/s. R. K. Overseas, M/s. Vijay Overseas, M/s. Globle Enterprises, M/s. Goodluck Exports, M/s. S.M. International, M/s. Sanjay International, M/s. Sharma Overseas and M/s. Z.K. Overseas. The documents of the said firms are maintained and kept by Shri Atul Kapoor and he does not provide me any copy of the same. Question-13 Please inform why did you provide your Customs broker licence to Shri Atul Kapoor, for customs clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gulation 17 of CBLR, 2018. The Assistant Commissioner (IGIA) Airport General Commissionerate, New Delhi held the enquiry and submitted the report dated 22.08.2022 holding that the Customs Broker M/s Shyam Singh for undue monetary gain knowingly allowed filing of bills of entry by subletting his license to Sh. Atul Kapoor and Sh. Sanjeev Kumar without obtaining the authorisation from the importer and therefore they have violated the provisions of Regulations 1(4), 10(a), 10(d) 10(e) and 10(n) of CBLR, 2018 and accordingly recommended that the Customs Broker License is liable to be revoked alongwith imposition of penalty and forfeiture of the security amount. The matter was adjudicated by the Commissioner of Customs and relying on the voluntary statement made by the appellant under Section 108 of the Act concluded that CB did not verify the value of the goods before filing the subject bills of entry, he aided the importer in the undervalued import and thereby led to the attempt to importation of mis-declared / overvalued goods and therefore fails to comply with the obligations cast upon him under the provisions of CBLR, 2018. The Adjudicating Authority specifically observed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de letter dated 30.03.2022, inter-alia submitting that the delay in making the retraction was due to the reason that the copy of the said statement was not provided to him and it is only after the order of suspension dated 25.03.2022 was issued that he learnt about the same. We do not agree with the said contention of the appellant for the simple reason that if the appellant had bonafide reason that he was unable to make the statement he could have submitted his medical papers and sought some time to make the statement or else recorded the same while he signed the said statement. But he did not take any such action in that regard. On the other hand, we find that after the statement was recorded in question answer form, he in his own handwriting had stated:- I have carefully read my above statement typed by DRI off. on my request. I found the above statement typed as per my say. This is my true correct voluntary statement. I have tendered the above statement without any fear, force, coercion or inducement. This is my voluntary statement. I put my date signature on all pages in token of the correctness. Total 01 to 6 pages. So, therefore, to say that he was unaware of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant speaks much against him. This answers the contention of the appellant and we, accordingly, reject this submission. 10. The learned Counsel for the appellant has next argued that there is violation of the principles of natural justice in as much as he has not been allowed to cross examine the witnesses namely, Sanjeev Kumar and Atul Kapoor who have been alleged to have made the statements under section 108 of the Act and which have been relied upon by the department. We find that the statement of the appellant himself is sufficient to establish the substantive allegation of subletting the licence and therefore nothing much would have turned by allowing him to cross examine Sanjeev Kumar and Atul Kapoor. There are catena of decisions on the point that failure to provide an opportunity to cross examine the witnesses when there is already a confessional statement by a party, there is no violation of principles of natural justice. Reference is invited to the decision of Apex Court in Surjeet Singh Chabbra (supra) as quoted above. 11. We would also like to refer to the decision of this Tribunal in D. S. Cargo Agency vs. Commissioner of Customs, New Delhi, 2021 (376) ELT 72 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btained by threat or duress the burden lies upon the accused. We observe that there is nothing on record till date to satisfy the adjudicating authorities that the statement/confessions of the Directors of the Company were however made under threat or duress. Therefore, we are of the opinion that statements even if retracted can form the basis of conviction without examination of the persons making confessions in the manner as mentioned under Section 9D of Excise Act/138 of the Indian Evidence Act . 13. The learned Authorised Representative has referred to a decision in Kanishka Matta vs. Union of India -2020 (42) GSTL 52 (M.P.), by the High Court of Madhya Pradesh distinguishing the case where retracted confession has been used as a piece of corroborative evidence and not as evidence on the basis whereof alone a judgement of conviction and sentence has been recorded. The relevant para reads as under:- 24. Learned Counsel for the petitioner has placed reliance upon a judgment delivered in the case of Vinod Solanki v. Union of India and Another reported in (2008) 16 SCC 537 = 2009 (233) ELT 157 (SC) = 2009 (13) STR 337 (SC). Heavy reliance has been placed in paragraph No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement is binding on the appellant. 15. Similarly, the decision of the Bombay High Court in Kiran Nagindas Vora vs. Commissioner of Customs (Export), Nhava Sheva 2015 (322) ELT 97 (Bom.) is distinguishable as the statements recorded were retracted at the first available opportunity by an affidavit in the presence of the Magistrate, which is not so in the present case. 16. In the present case, we find that it is not the stand of the appellant that his statement has been recorded by the department under threat, duress or coercion. In the absence of any such plea the statement made by him under section 108 of the Act are binding on him and the same cannot be discarded on the ground that the same has been retracted. We are, therefore of the opinion that there is no violation of the principles of natural justice in denying the appellant an opportunity to cross examine the two witnesses in view of the voluntary confessional statement made by him under section 108 of the Customs Act. 17. The other contention raised by the appellant relates to the violation of the Regulation 1(4) of CBLR, which requires that no license shall be sold or otherwise transferred. The submission is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity has wrongly recorded that he had not obtained authorisation letter or KYC documents from the respective importers in view of the observations made in the enquiry report as:- 18.5 .......The noticee herein had obtained authorisation from all the importers mentioned in para 7 of the impugned show cause notice. The details of the Authorisation and KYC documents obtained by the noticee are detailed in Annexure A to these submissions. In addition, copies of all those KYC documents are also enclosed herewith in Annexure B . 18.6 I have examined the documents and KYC documents in respect of M/s Alfa Overseas, ......... The aforesaid contents of the enquiry report dated 22.08.2022 has to be read in context with the statement dated 15.12.2021 wherein the appellant stated that import related documents are filed by Sh. Atul Kapoor and in response to Question No. 8 as to what documents he has brought, he stated:- Question 8 Please inform which documents you have brought today with yourself as sought vide summons dated 06.12.2021. Answer 8 I state that as sought by your summons dated 06.12.2021, I am subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpliance to the notice of Deputy/ Assistant Commissioner, as the case may be. 10(e) exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage. 21. The challenge to the violation of the aforesaid provisions by the appellant is that the Adjudicating Authority had not cited any evidence to demonstrate that the appellant had not advised the importers to comply with the provisions of the Act or other legal provisions or that he has not exercised due diligence to ascertain the correctness of the information which he has imparted to a client. The submissions made by the appellant needs to be rejected out rightly in view of his own admission that he did not know the proprietor, importer firm or had any KYC documents of the importers. In the absence of any knowledge, it is prima facie evident that there was no scope for the appellant to comply with these provisions, i.e. to advise his client to comply with the provisions and to exercise due diligence for ascertaining the correctness of the information. 22. Lastly, the submission of the appellant is that they could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right to carry on trade or profession in the background of Article 19 (1)(g) of the Constitution of India. v) The question of proportionality is of a great significance as the action is under a fiscal statue which may lead to a civil death. 24. As noted by the High Court of Delhi in Falcon Air Cargo and Travels (P) Ltd., vs. Union of India - 2002 (140) ELT 8 (Del.) that before choosing any of the two actions of suspension or revocation of licence under the regulations, it is necessary for the Commissioner /Tribunal to consider all relevant aspects and draw a balance sheet of gravity of infraction and mitigating circumstances. Keeping that in view we would now examine the facts of the present case. The main and substantial allegation against the appellant is that he had sublet his licence for monetary consideration. Having upheld the subletting of the licence by the appellant we have consequently upheld the other violations under regulation 10 (a), (n), (d) and (e) CBLR, 2018 as after submitting the licence the appellant was in no manner in control of the transaction and any actions thereof and therefore had no knowledge of either the importer firms or its Proprietor or the K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record is of the issuance of G-cards to non employees, as opposed to the active facilitation of any infraction, or any other violation of the CHA Regulations, whether gross or otherwise . Further, the Court observed:- 10 . Beginning with the facts, there is virtually no dispute. There is a concurrent finding of fact by the Commissioner and the CESTAT that the appellant did not have knowledge that the illegal exports were effected using the G cards given to V.K. s employees. There was no active or passive facilitation by the appellant in that sense. Undoubtedly, the provision of the G cards to non-employees itself violated the CHA Regulations. This is an admitted fact, but it is not the Revenue s argument (nor is it the reasoning adopted by the Commissioner or the CESTAT) that this violation in itself is sufficiently grave so as to justify the extreme measure of revocation. Not any and every infraction of the CHA Regulations, either under Regulation 13 ( Obligations of CHA ) or elsewhere, leads to the revocation of license; rather, in line with a proportionality analysis, only grave and serious violations justify revocation. In other cases, suspension for an adequate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Judicial Review of Administrative Action (1995), pp. 601-05, para 13.085; Wade Forsyth: Administrative Law (2005), p. 366; Mukul Kumar Choudhuri - (2009) 15 SCC 620]. What is otherwise within the discretionary domain and sole power of the decision maker to quantify the punishment, once the charge of misconduct stands proved, is exposed to judicial intervention if exercised in a manner which is out of proportion to the fault. Award of punishment, which is grossly in excess of the allegations, cannot claim immunity and remains open for interference under limited scope of judicial review. One of the tests to be applied, while dealing with the question of quantum of punishment, would be: would any reasonable person have imposed such punishment in like circumstances? Obviously, a reasonable person is expected to take into consideration the measure, magnitude and degree of misconduct and all other relevant circumstances, and exclude irrelevant matters before imposing punishment [Mukul Kumar Choudhuri - (2009) 15 SCC 620]. The CHALR enables both suspension and revocation of the license of a CHA for violation of any of the conditions specified therein. If any such ground exists, two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulated under the CHALR.Here the order of suspension of licence under Regulation 16 of CBLR, 2018 was issued on 25.03.2022 and since then the appellant is without any livelihood and therefore it would be extremely harsh if the order of revocation is continued further, moreover when he is no more a young man to start another source of income. We may also like to reiterate that the allegations of mis-declaration and under-valuation of goods, made by the department against the appellant does not survive for the reasons stated above and therefore revocation of licence being a grave punishment is not justifiable. We also find support from the decision cited by the Revenue in Service Bureau vs. Commissioner of Customs, New Delhi 2018 (363) ELT 949 (Tri. Del), where the contravention of Regulation 11(a), (d), (e) and (n) and Regulation 17(a) of Regulation, 2004 was held to have been established against the Customs Broker, however, this Tribunal observed:- 9. Keeping in view the Principle of Proportionality, in the peculiar facts and circumstances of this case, we are of the view that revocation of CB licence is too harsh a penalty to be imposed on the appellant. In our view, the end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same was pending before the advisory board. In this regard, it is informed that the COFEPOSA advisory board has opined that these exist sufficient grounds for the detention of Sh. Sanjeev Kumar alias Sanjeev Kumar Yadav. Accordingly, vide order dated 21.02.2022 (copy enclosed), the Central Government has confirmed the detention order of Sh. Sanjeev Kumar and ordered him to be detained for a period of one year from the date of his detention i.e. from 27.11.2021. 3. This is for your information and necessary action please. Encl: (as above) Sd/- (Deepak Kumar) Additional Director From the perusal of the said letter, we are unable to foresee as to whether the same can be treated as an offence report as defined in the Explanation to Regulation 17. Except for referring to the names of various importers in the Subject , nothing more has seen stated about the summary of investigation and the framing of charges relating to the allegations against the Customs Broker. So the present case has been initiated by the Department without complying with the mandatory requirement of furnishing the offence report as defined under the Regulations. This is one more reason which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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