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TMI Blog2023 (10) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... Overseas having IEC No. BREPS9544C to have fraudulently availed IGST drawback and refund by using bogus manufacturing registration, GST invoice, where no GST duty was being paid to the exchequer but inadmissible refund was being claimed, on the basis of the said bogus invoices which were being disbursed equally to the FOB value of the shipping bill. It was revealed that the said exporter having declared IEC address as Barwalan, Shiv Shakti Ganga Mandir, Moradabad-244001, had filed 08 shipping bills during the period August and September, 2018 with FOB amount of Rs. 2,10,14,834.8/- and claimed the IGST refund of Rs. 54,90,378/- for the export of goods i.e. "Clutch Plates & Glass Items, decor glass". The appellant also got it disbursed from the Government Exchequer. The said amount has been withdrawn to the current bank accounts of appellant with M/s Kotak Mahindra Bank Limited, Muradabad and M/s Allahabad Branch, Civil Lines Muradabad. (ii) The exporter had two consignees/buyers based in UAE. It was also revealed that all the said 8 shipping bills were filed through the Customs Broker, namely, M/s Aradhya Exporter & Import Consultant Pvt. Ltd., the present respondent. The said cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voices and IEC. The exporter had already fraudulently claimed IGST refund, despite the fact that the same was ineligible and more so because there is non-realization of full amount of export proceeds from the foreign buyer. Investigations have sufficiently proved that the exporter firm was existing only on papers. It was created in the name of one Shri Sirajul Kallu, the IEC was obtained and the bank account was also opened in the name of said Shri Sirajul Kallu, who had never appeared before the authorities. One Shri Zoheb Moin, had appeared for the exporter as its authorized representative and twice his statement was recorded. It is submitted that he could not satisfactorily explain the findings of the investigation report. The customs broker also failed to appear except that his G-Card, Shri Vinay B. Rane appeared and got his statement recorded. Perusal of these statements is sufficient to show that the customs broker has failed to exercise the due diligence and to verify the correctness of IEC and GSTN. The licence was rightly suspended vide order dated 15.09.2020. The suspension has wrongly been revoked vide the impugned order-in-original dated 05.10.2020. The said order is, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 09/2010 dated 08.04.2010. It is thus impressed upon that the allegations that CB handled exports of non-existent exporter involving inadmissible IGST refund of more than Rs. 54.90 lakhs was wrongly been made the basis for suspension of the CB's licence by the Mumbai Commissionerate. The suspension has rightly been revoked for want of non-involvement of the customs broker who duly complied with the KYC norms and exercised requisite due diligence. Thus, it has rightly been held in the order under challenge that CB has not violated Regulation 10(e) and 10(n) of CBLR, 2018. While relying upon the decision of this Tribunal in the case of Commissioner of Custom, New Delhi vs. M/S CRM Logistics Pvt Ltd. vide Final Order No. 52053-52054/2021 dated 03.12.2021 the appeal is prayed to be dismissed. 10. Having heard the rival contentions and perusing the entire record, we observe and hold as follows. 11. The question to be adjudicated is: (i) whether the respondent customs broker M/s Aradhya Export has violated Regulation 10(e) and 10(n) of CBLR, 2018. To adjudicate the same we observe following to be admitted and apparent facts on record; (ii) Respondent CB was granted licence initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any information which he imparts to a client with reference to any work related to clearance of cargo or baggage; 12. For the violation of this Regulation what is important to be brought on record is that there was certain information imparted by the customs broker to the exporter and that the said information was incorrect. We do not find from the above facts nor from the other record of the impugned appeal that there was any such information given by the CB to the exporter which was later found false. These observations are sufficient for us to hold that violation of Regulation 10(e) of CBLR, 2018 is not apparent against the CB. The original adjudicating authority in paragraph 25.1.1 of order under challenge has appreciated the reply of the customs broker where it was stated that CB has never imparted any incorrect information to the exporter nor even it is apparent from the statement of the G-card holder of CB that certain information was imparted to the exporter which was later found false. Once there is nothing on record to show not even in the show cause notice as to what information was imparted by CB to the exporter alleging violation of Regulation 10(e) has no meaning. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned in IEC or at least to prove that he has verified the authority of exporting firm in favour of Shri Imran Khan. Nothing has been produced by CB to prove the same except the postal receipts between the two addresses. Otherwise also merely because CB obtained requisite documents does not tantamount to fulfillment of requirement of the Regulations relating to the features to be verified. The CB has not even claimed that it verified the existence of importer except stating about receiving documents from one Shri Imran Khan. There is apparent violation of Regulation 10(n). We draw our support from the decision of this Tribunal in the case of Millenium Express Cargo Pvt Ltd. Vs. Commissioner of Customs[2017 (346) ELT 471 (Tri.-Del.)]. 15. Further, we observe that it is also coming from the apparent admission in the statement of G-card holder of CB that the CB was consciously and intentionally involved in assisting the fraudulent exports, to our opinion the delivery/ the service receipts from or at the address given in IEC has no meaning. It was more so required for CB to bring on record the cogent evidence when so named Shri Imran Khan failed to appear before the investigating a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exporting firm is alleged as fake/ non-existent and the CB is also alleged to have connived, the onus was of CB respondent to bring on record all requisite details to prove a valid chain of supplier, importer, CB and consignees abroad. Absence of such details on record supports our opinion to hold that the adjudicating authority has wrongly exonerated the CB from allegations of violating of Regulation 10(n). From the above discussion, we hereby accept all the grounds raised by the respondent/assessee in their cross-objection. We, accordingly, hold that the order under challenge, to that extent, is liable to the set aside. 18. At this stage comes the question of proportionality of punishment as to whether the revocation of customs broker licence will be proportionate punishment to the alleged violation by said CB of Regulation 10(n). 19. For the purpose it is foremost necessary to appreciate the role of custom broker. Hon'ble Supreme Court in the case of K M Ganatra. Hon'ble High Court of Calcutta in the case of Welcome Air Express Pvt Ltd. Vs. Commissioner of Customs. (Airport & Administration)[ 2022 (380) ELT 544 (Cal) while considering the decision of Hon'ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction of business by the Custom House officials. 20. In the present case from the above discussion it has come on record that M/s Fine Overseas is a firm existing only on the papers which was created in the name of Shri Sirajul Kallu. The exporter was not existing at the address mentioned in the IEC. The IEC and bank accounts were obtained for facilitating the fraudulent exports to avail ineligible IGST refund / drawbacks. From the RBI remittances report regarding accepted realization of exports by M/s Fine Overseas during the relevant period it has come on record that remittance of Rs. 41,575 USD against one shipping bill was realized as against an amount of Rs. 2,10,14,836/- for 8 shipping bills. To our opinion and in light of the unretracted admission of respondents/ CB's G-card Holder about involvement of CB in this transaction we hold that this is a case of not merely the violation of Regulation 10(n) but a case of fraud committed by CB and fraud vitiates everything. The cardinal principal which is enshrined in section 17 of the Limitation Act is that fraud nullifies everything. 21. This Tribunal in the case of M/s Swastic Cargo Agency Limited vs. Commissioner of custom 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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