Dr. Rachna Gupta, J
1. The appellant, a Customs Broker has challenged the Order-in-Original No. 07/2022 dated 25.02.2022, whereby the Commissioner of Customs has
ordered revocation of the customs broker license of the appellant with forfeiture of the security deposit of Rs. 75,000/-under Regulation 14(b) of
Customs Broker Licensing Regulations, 2018, (hereinafter referred to as the CBLR, 2018) and has also imposed penalty of Rs.50,000/- under
Regulation 18(1) of CBLR, 2018. The brief facts of the case are as follows:
1.1 M/s. Vijender Singh, is a Customs Broker having CB License valid upto 17.03.2029. An intelligence was received that some exporters are using
fake IECs, fake manufacturing units and forged tax (GST) invoices for the exports of rotten cement concrete bricks declaring the same as “article
made of cement concrete specially designed custom made UV radiation and IR radiation heavy cooling properties, wave coated brick faced masonry
block made of cement concrete†for claiming huge amount of ineligible IGST Refund and Reward from Customs authority. On the basis of above
information, 02 containers, filed in the name of the exporter M/s. Della Enterprise were put on hold/detained at JNPT Port dated 16.11.2018.
Containers pertained to Shipping Bills No.8830161, 8830162, 8830164, 8830166 and 8830169 all dated 12.11.2018 and Shipping Bill No.8830165,
8830167, 8830168, 8830170 and 8830171 all dated 12.11.2018. All the Shipping Bills were filed by Customs Broker M/s. Seej India (CHA No.
11/810).
1.2 On examination of consignments put on hold, the goods contained therein were found to be ordinary rotten cement concrete bricks. Representative
samples of the goods were collected from both the containers randomly. The said samples were then sealed in the presence of panchas for further
investigation and to ascertain the composition and properties of the said goods for proper classification under RITC. From the data of past exports of
similar goods “article made of cement concrete specially designated custom made UV radiation and IR radiation heavy cooling properties wave
coated brick faced masonry block made of cement concrete†by the exporter M/s. Della Enterprise (IEC No. 0316512052), it was revealed that
during the period 09.10.2018 to 12.11.2018, a total of 35 shipping bills (including the 10 shipping bills examined 100% as mentioned above) with FOB
amount of Rs.13.71/- crores were filed in JNPT Port only and undue & ineligible IGST refund of Rs.1,65,43,926/- in respect of 15 such shipping bills
has already been claimed and availed from the exchequer. Further, IGST refund of Rs.3,12,51,710/- in respect of rest of 20 shipping bills has been put
on hold by this office vide letter dated 19.11.2018 in accordance with the CGST Rule 96(4) (b).
1.3 Based on the statements recorded specifically of Mr. Sashikant Marut Pal, the G-Card holder of the appellant and various document received and
retrieved during investigation that Show Cause Notice No. 22/2021 dated 07.09.2021 was served upon the appellant alleging him to be involved in the
noticed act of misdeclaration and overvaluation. The appellant was called upon to explain as to why CB License should not be revoked and part or
whole of the security submitted at the time of issue of their Registration, should not be forfeited in terms of Regulation 17 of CBLR, 2018 for
contravention of provisions of Regulation 10 (a), 10 (e), 10 (n), 10 (o) and 13 (12) of Customs Broker Licensing Regulation, 2018. Based on said show
cause notice inquiry report dated 01.12.2021 has also received in concerned commissionerate vide letter dated 02.12.2021. The proposal of the said
show cause notice and the inquiry report proposal has been accepted vide Order-in-Original No. 07/2022 dated 25.02.2022. Being aggrieved the
appellant is before this Tribunal.
2. We have heard Ms. Vidushi Shukla, learned Advocate for the appellant and Shri M.K. Shukla, learned Authorized Representative for the
respondent.
3. Learned counsel for the appellant submitted that the case against the appellant is that the G-Card Holder of the appellant namely Shri Shashikant
Maruti Pol has allegedly handled customs clearance of exports done by five exporters namely M/s. Trivano International, M/s. Artco India, M/s.
Kalyani Enterprises, M/s. Intercraft International and M/s. Saachi Exports at Nhava Sheva, Mumbai and accepted the documents from Shri Sitaram
Jadhav and not directly from the IEC holders. It is further alleged that Sh. Shashikant Maruti Pol has performed customs clearances without
verification of KYC documents and genuineness of the exporters who were allegedly involved in purported IGST refund fraud. It has been alleged
that since Shashikant Maruti Pol, G Card Holder of the Appellant CHA firm has failed to perform his duties specified under CBLR, 2018, hence the
appellant is held liable for contravention of provisons of Regulation 10(a), 10(e), 10(n), 10(o) and 13(12) of the CBLR, 2018. Based on these
allegations, vide impugned order the adjudicating authority has revoked appellant’s CB license, imposed penalty and has forfeited security deposit
furnished by the appellant. The order dated 25.02.2022 is challenged on following grounds.
(i) Appellant was never informed by his G-card Holder about the exports.
(ii) G-Card Holder accepted that he has done customs clearance.
(iii) CBLR proceedings initiated on the basis of SCN dated 09.10.2020 issued under Section 124 of the Customs Act, 1962.
(iv) It is also submitted that no allegation of any connivance of appellant with exporters or the G-card Holder.
(v) Any violation, it attribute to the G-card Holder.
(vi) Above all livelihood of appellant is impacted.
3.1 To support his submissions, learned counsel has relied upon the following decisions:
(i) Buhariwala Logistics Vs. Commissioner of Customs (I&G), New Delhi reported as 2016 (331) ELT 633 (Tri.-Del.)
(ii) Kirti Cargo Vs. Commissioner of Customs (Gen.), New Delhi reported as 2016 (33) ELT 107 (Tri.-Del.)
(iii) Kunal Travels (Cargo) Vs. Commissioner of Customs, New Delhi reported as 2017 (354) ELT 447 (Del.)
Accordingly, order under challenge in prayed to be set aside and appeal is prayed to be allowed.
4. To rebut these submissions learned Departmental Representative has reiterated the discussions and finding given in the impugned order. In addition
learned Departmental Representative has made following submissions:
(i) Admission of Irregularities: Shri Shashikant Maruti Pol, as the Power of Attorney holder of Customs Broker M/s Vijender Singh, admitted to
facilitating customs clearance for exports without verifying the addresses and genuineness of the exporters. This admission indicates a clear disregard
for the regulatory requirements and raises questions about the integrity of the customs clearance process.
(ii) False Representation of Office Premises: The investigation revealed that the office premises of M/s Vijender Singh were misrepresented as a Pan
Shop. This misrepresentation not only raises suspicions about the legitimacy of the customs broker but also suggests a deliberate attempt to conceal
their activities. Shri Hardasani Haresh Jamiatrai's statement further corroborates the fraudulent nature of the operation.
(iii) Violation of Customs Act, 1962: Custom Broker's failure to perform his duties as specified under the Customs Broker Licensing Regulations, 2018,
directly contravenes Section 50 of the Customs Act, 1962. By not verifying the correctness of Importer- Exporter Code (IEC) numbers, Goods and
Service Tax Identification Numbers (GSTIN), and the identity and functioning of clients at declared addresses, Pol facilitated fraudulent exports aimed
at claiming ineligible IGST refund amounts.
(iv) Liability for Penalty: Based on the violations outlined in the statement, Shri Shashikant Maruti Pol and based on investigation CB violated
Regulation 10(a), 10(e), 10(n), 10(0), and 13(12) of the Customs Broker Licensing Regulations, 2018. Also penalties were proposed for alleged
violation of provisions of Customs Act, 1962 due to CB's conscious and intentional involvement in assisting fraudulent exports and his failure to fulfill
his duties as a customs broker.
(v) The investigation also revealed that the exporters were involved in several other cases of commercial fraud in the past. The Customs Broker was
found to be a habitual offender, as evidenced by a previous order imposing a penalty for failure to comply with CBLR, 2018.
(vi) In conclusion, the Customs Broker is alleged to have violated multiple regulations of CBLR, 2018, including Regulation 10(a), 10(e), 10(m), 10(o),
and 13(12), and is liable for strict action under the regulations.
4.1 To support his submissions, learned Departmental Representative has relied upon the following decision:
(i) Millenium express Cargo Pvt. Ltd. Vs. Commissioner of Customs, New Delhi reported as 2017 (346) ELT 471 (Tri.-Del.)
(ii) Commissioner of Customs Vs. G.M. Ganatra & Co. reported as 2016 (33) ELT 15 (SC)
(iii) Baraskar Brothers Vs. Commissioner of Customs (General), Mumbai-2009 (244) ELT 562 (Tri.Mumbai)
(iv) Commissioner of Customs, Jaipur Vs. Naresh Kumar Meena, 2018 (360) ELT 60 (Raj.)
(v) Jasjeet Singh Marwaha Vs. Union of India, 2009 (239) ELT 407 (Del.)
(vi) Skytrain Services Vs. Commr. of Cus. (Airport & General), New Delhi reported as 2019 (369) ELT 1739 (Tri. Delhi)
Accordingly, appeal is prayed to be dimissed.
5. Having heard both the sides, perusing the record, following chronology is observed:
(i) 25.02.2022: Revocation Order-in-Original No. 07/ZR/Policy/2022
(ii) 01.12.2021: Inquiry Report
(iii) 07.09.2021: Show Cause Notice proposing Revocation
(iv) 23.07.2021: Suspension confirmed
(v) 15.07.2021: License of appellant suspended
(vi) 09.10.2020: Offence Report is SCN issued under Section 124 of the Customs Act.
6. Based thereupon and other facts, the issue to be adjudicated is whether appellant has violated provisions of Regulation 10(a), 10(e), 10(n), 10(o) and
13(12) of the CBLR, 2018 for some export clearances attended by its G-Card Holder on behalf of some exporters who were found to be using fake
IECs and have claimed huge IGST refund on later occasion.
7. Foremost we peruse the said legal provisions:
Regulation 10(a): obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as a
Customs Broker and produce such authorisation whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of
Customs, as the case may be
Regulation 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 haggage.
Regulation 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:
Regulation 10 (o): inform any change of postal address, telephone number, e-mail etc. to the Deputy Commissioner of Customs or Assistant
Commissioner of Customs, as the case may be, of all Customs Stations including the concerned Deputy Commissioner or Assistant
Commissioner of the Commissionerate who has granted the license immediately within two days:
As per Sub-regulation 12 of Regulation 13 of CBLR 2018, the Customs Broker shall exercise such supervision as may be necessary to
ensure proper conduct of his employees in the transaction of business and he shall be held responsible for all acts or omissions of his
employees during their employment.
8. We now observe that the original adjudicating authority has passed the impugned order based on following grounds:
(i) Regulation 10(a): The regulation requires a Customs Broker to obtain authorization from each company, firm, or individual for whom they are
employed and produce such authorization when required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs. However,
in this case, Shri Shashikant Pol, a G Card holder and Power of Attorney holder of the CB firm, admitted to clearing exports for multiple firms without
proper authorization, indicating a violation of this regulation.
(ii) Regulation 10(e): This regulation mandates a Customs Broker to exercise due diligence to ascertain the correctness of any information they impart
to a client regarding clearance of cargo or baggage. However, it was found that the Customs Broker did not interact with the exporters directly,
instead dealing with a syndicate, and failed to ascertain the correct nature and value of the exported goods.
(iii) Regulation 10(n): According to this regulation, a Customs Broker must verify the correctness of the Importer Exporter Code (IEC) number, Goods
and Services Tax Identification Number (GSTIN), identity of the client, and functioning of the client at the declared address using reliable,
independent, and authentic documents. The Customs Broker in this case failed to verify the addresses and genuineness of the exporters, as admitted
by Shri Shashikant Pol.
(iv) Regulation 10(o): This regulation requires a Customs Broker to inform any change of postal address, telephone number, email, etc., to the Deputy
Commissioner of Customs or Assistant Commissioner of Customs of all Customs Stations. The Customs Broker in this case failed to fulfill this
obligation, as indicated by discrepancies regarding the office premises in Mumbai.
(v) Regulation 13(12): A Customs Broker is required to exercise necessary supervision to ensure the proper conduct of their employees in the
transaction of business and will be held responsible for all acts or omissions of their employees during their employment. However, it was found that
Shri Shashikant Maruti Pol, a G-card holder and employee of the CB, was involved in fraudulent exports without proper verification of documents.
9. We have perused the entire record of the appeal and have observed as follows:
9.1 Appellant, the sole proprietor of Customs Broker M/s. Vijender Singh has acknowledged that he personally had not ever undertaken any clearance
works in Mumbai. Shri Shashikant Maruti Pol is the authorized G-Power of Attorney holder of Customs Broker M/s. Vijender Singh in Mumbai. He
has been operating in Mumbai since 2012. He does not know any of the exporter personally viz M/s. Saachi Exports India, M/s. Trivano International,
M/s. Artco India, M/s. Kalyani Enterprise and M/s. Intercraft International, Shri Shashikant Pol will produce KYC documents of the said exporters
within 05 working days but those were never produced. The details of goods and S/Bs of the export consignments were also not forwarded to him by
Shri Shashikant Pol.
9.2 The G-card holder Shri Shashikant Maruti Pol, acknowledged that he got the Power of Attorney of M/s. Vijender Singh in the year 2012. He had
done the Customs clearance of exports done by M/s. Trivano International (IEC-3315900973), M/s. Artco India (IEC-2908000091), M/s. Kalyani
Enterprises (IEC-AJQPJ2299F) amd M/s. Intercraft International (IEC-2906003239). The customs clearance works of these exporters were given by
Shri Sitaram Jadhav, who introduced himself as a forwarder and he personally submitted the documents like invoices, packing list etc. he did not
receive any test report of the specifications of goods. He did not verify the authority of Shri Sitaram Jadhav regarding the export of all above said
goods having description ‘articles made of cement concrete specially designed customs made UV radiation and IR radiation heavy cooling
properties masonary bricks. He did not verify the addresses and genuineness of all these exporters. He stated that he would submit KYC documents
of all these 04 exporters received from Shri Sitaram Jadhav within 03 days but failed to submit the same. He did not know any person other than Shri
Sitaram Jadhav regarding the export of the above said goods to UAE. He accepted that he had not fulfilled the obligations of Customs Broker in the
verification/confirmation/genuineness of these above exporters.
9.3 On checking of IEC of M/s. Della Enterprises it was found to be a dummy firm created in the name of Shri Veerchand Kisturchand Jain. The IEC
holder Shri Veerchand Kisturchand Jain has denied any connection with M/s. Della Enterprise and also denied having exported any goods. It is found
that the declared premises of the exporters are fake and also no business activities were found in the places of business addresses provided in GSTIN.
Persons involved exporting these consignments were also found to be involved in several cases of commercial fraud in the past. Hence it is clear on
record that a group of syndicate with the said bogus IECs has availed ineligible IGST refund on the basis of bogus invoices, wherein fact remains is
that no IGST had been paid to the exchequer in respect of such invoices. The CHA in connivance of other exported the goods on the name of such
IEC's and have syphoned the IGST refund amount received into the account of the fictitious exporter, in respect of such exports. The bogus IECs'
were used to hide the identity of the actual beneficiary of such fraudulent activity and to escape detection of their direct involvement by the Customs
authority. As per Rule 12 of Foreign Trade Regulation Rules 1993 ""any person using someone else's Importer-Exporter Code shall be held liable for
violation of this rule and shall accordingly be liable for penalty under sub-section (2) of Section 11 of the rule.
9.4 The Radioactivity Measurement Laboratory, Radiation Safety System Division, Bhabha Atomic Research Centre, Trombayhas confirmed vide
Ref. No. RSSD/RKL/2018 dated 17.12.2018 that “No detectable radioactivity was found in these concrete bricks’ as mentioned in the shipping
bills descriptions. Whereas in the Chartered Accountant Certificate submitted by the exporter to the Customs Authority, break-up of the chemical
composition of the goods with valuation are mentioned to certify the assessable value/cost of the goods. As the chemical (Plexiglas Resin), which
covers the major cost of the goods declared by Chartered Accountant in his certificate, is normally used in ""optical glass"" and has no relation with ""UV
radiation, IR radiation heavy cooling properties"", the certificate is wrong on face of its record.
9.5 The observations not only establish that the goods in question were rotten cement bricks but were mis-declared to be high valued custom made
UV, IR radiation bricks of cooling properties. It is also on record as the admission of Shri Shashikant Maruti Pol, the G-card holder of the appellant
that the alleged act was done with his connivance and he had complete knowledge about the modus operandi of the syndicate involved in alleged
misdeclaration and overvaluation to get ineligible duty drawback. Admissions are the best evidences which need no further proof. Thus, it is clear that
G-card holder has violated the above quoted provisions of CBLR. The G-card hold is none but a customs broker of the CHA/appellant, hence
appellant is responsible for the act of his agent. In an another appeal of this appellant only bearing No. 50097/2020 decided vide Order No. 50035/2024
dated 10.01.2024 it has already held that the appellant has failed to comply with the obligations under the CBLR Regulations.
10. In light of entire above discussion and the decision of this Tribunal with respect to present appellant only, we do not have any reason to differ from
the findings in the order under challenge. Accordingly, order under challenge is upheld and appeal is dismissed.
[Order pronounced in the open court on 04.10.2024]
