Custom, Excise & Service Tax Tribunal
M/S. Yogesh Kumar vs C.C. New Delhi (Import & General) on 13 April, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Appeal No. C/53677/2015-CU(DB)
[Arising out of Order-in-Appeal No. 107/BBG/Policy/2015 dated 18.08.2015 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), New Delhi].
For approval and signature:
Honble Ms. Archana Wadhwa, Member (Judicial)
Hon'ble Shri B. Ravichandran, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Yogesh Kumar .Applicants
Vs.
C.C. New Delhi (Import & general) .Respondent
Appearance:
Shri Piyush Kumar, Advocate for the Applicants Shri K. Poddar, DR for the Respondent CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Hon'ble Shri B. Ravichandran, Member (Technical) Date of Hearing: 13.04.2016 FINAL ORDER NO. 51789-CU(DB) Per Archana Wadhwa:
The present appeal is against the impugned order of Commissioner of Customs (General) New Custom House New Delhi vide which he has revoked the appellants CHA license and has further ordered forfeiture of the whole amount of security deposit. In addition, penalty of Rs. 50,000/- stands imposed under Regulation 22 of the Customs Brokers Licensing Regulation 2013.
2. After hearing both the sides we find that the appellant co. was licensed custom broker filed shipping bills for and on behalf of some of the exporters. On the basis of certain intelligence received by the revenue that some of the exporters attempted to claim huge amount of drawback by resorting to over valuation of said exported goods, investigations were initiated against them. During the course of investigation, statements of various persons were recorded. In as much as the present appellant had handled shipping bills of M/s. Sansam Enterprises, the statement of the appellant representative were also recorded, wherein he admitted filing of the shipping bills on behalf of M/s. Sansam Enterprises and attended to the clearance of the subject goods. It also came on record that the exported goods were examined 100% as per the declared description, quantity, value, drawback and sub-serial no. etc and it was only thereafter that let export order was passed. The CHA further deposed that as there was some dispute with the exporter as regards their payments, they discontinued the business with them.
It is seen that based upon the result of the above investigation, the appellant was served with a show cause notice dated 09.10.2012 proposing to impose penalty upon him in terms of the provision of the Customs Act. The said show cause notice culminated into an order passed by the Additional Commissioner imposing penalty of Rs. 5 lakhs under section 117 of the Customs Act. The Additional Commissioner also recommended suspension of the CHA license in terms of the Regulation 20 of the Customs House Agent Licensing Regulation 2004.
3. It is seen that the said order of the Additional Commissioner were appealed against by the assessee before Commissioner (A), who set aside the order of Original Adjudicating Authority by observing in para 8,9 & 10 as under:
8. The crux of the findings of the learned Additional Commissioner leading to imposition of penalty appears to be that it was incumbent upon the CHA to verify the credentials of the firm and their partners by physically visiting their office/residential premises which in my considered opinion is misconceived as neither CHALR 2004 nor Circular 09/2010-CUS prescribed such personal visit during the relevant time. The circular only required the CHA to verify the credentials by using reasonable means and I observe that the documents obtained by the appellant and verification therefore from their website was sufficient compliance to the requirement prescribed in Circular regarding KYC norms to be adhered by a Customs House Agent.
9. It appears that the exporters in the instant case have successfully hoodwinked the system and obtained the Election Identity Card in their names, PAN cards from the IT Department in the name of the firm as well as in the names of the individual partners, opened an account in a Bank and obtained IEC in the name of the firm giving incorrect addresses. The fact that all these documents furnished by the exporter are still valid and appear on the respective websites further shows that the conduct of the appellant cannot be faulted.
10. Thus, I find force in the submission of the learned Counsel that the appellant had sufficiently complied with the requirement of Regulation 13 of the Custom House Agent Licensing Regulation, 2004 and the Circular No. 9/2010 dated 08.04.2010 by obtaining the requisite documents and verifying the same from the respective website before accepting the assignment and hence cannot be held guilty of violation of the provisions of Regulation 13 or liable to imposition of penalty under section 117 of Customs Act, 1962 or for suspension of license. The findings of the ld. Additional Commissioner being contrary to the stipulations of CHALR 2004 or the circular 09/2010 and therefore unsustainable in law.
4. Thereafter, the appellants were issued a show cause notice dated 05.03.2015 under regulation 22 proposing revocation of their license of the CBLR on the same ground, which were the subject matter of the show cause notice issued under the Customs Act. An enquiry officer was appointed and the appellant contested the charge before the said enquiry officer, who however did not favour with the same and affirmed the proposed allegation vide his enquiry report dated 25.05.2015. Based upon the said enquiry report the Commissioner revoked the license vide the present impugned order.
5. The Ld. Advocate appearing for the appellant has drawn our attention to the present impugned order wherein the Adjudicating Authority has simpliciter adopted the result of enquiry report and without independently examining the issue. As regards KYC (Know your client) norms, it was contended that the appellant had verified the veracity of telephone bill, pan card and IEC from the respective website which was sufficient compliance to the stipulation of the Customs House Agent Licensing Regulation 2004 as also of Customs Brokers Licensing Regulation of 2013 and the circular no. 09/2010-CUS. Ld. Advocate has also drawn our attention to the independent findings of the Commissioner (A) order passed challenging the imposition of penalty imposed under section 117 of the Act. The said order of the Commissioner (A) setting aside the penalty on the appellant stands accepted by the Revenue and no appeal stands filed. As such by drawing our attention to various decisions of the Tribunal as also by High court, it stands held that the appellants revocation of CHA licenses was neither called for nor justified.
6. Shri K. Poddar, appearing for the Revenue draws our attention to the fact that the investigation made by the Revenue revealed that the exporter was not in existence at the address given by him. Further, IEC code and pan card number were also obtained by the exporter fraudulently. In such a scenario commissioner has rightly held that the customs brokers has not followed KYC norms properly and has not made detailed efforts to find out the genuinity of the exporter. Accordingly Ld. DR supports the impugned order of Commissioner.
7. After appreciating the submission made by both the sides we find that there is no dispute about the fact that based upon the same investigation, penal proceedings were initiated against the appellant under the customs act. Such penal proceedings resulted in passing of an order by Commissioner (A) vide which imposition of penalty was set aside. We have already reproduced relevant portion of the order of Commissioner (A). We are informed that the said order stand accepted by the Revenue and there is no further appeal.
8. Once there is a finding by other wing of the same Department to the extent that the appellant had made efforts to find out the genuinity of the exporter by looking into the website, where the appellants IEC code as also pan card number are reflected, we find no justifiable reason for the Commissioner to deviate from the said finding.
9. Otherwise also we note that it is not Revenues case that the said document which stands examined by the CB from the respective website are not available at such website. Even in terms of Circular no. 09/2010-CUS, a CHA is required to verify the credentials by using reasonable means and such reasonable means would relate to verification of documents obtained from the exporter and verification of the same from the website. Which particular proper norms prescribed under the law or the procedure prescribed by any circular does not stands followed by the CHA? There is no answer to the said question in the impugned order. Otherwise also we find that no discrepancy stands detected in the exported goods vis-a-vis their description and quantity etc. Even the value declared by the exporter was accepted by the Revenue, after 100% examination of goods and the let export order was issued by the Customs Authorities.
10. It is only subsequently, by way of detailed investigation that the charge of over valuation was made against the exporter. In such a scenario we really fail to find out any lapses on the part of the CB so as to impose him with a lifelong ban from conducting the business. For the above proposition we may refer to Honble High Court of Delhis order in the case of Ashiana Cargo services 2014 (302) ELT 161 (Del), vide which the minority order of the Tribunal was upheld by setting aside the majority order. The said decision of the Delhi High Court further stands approved by the Honble Supreme Court reported as 2015 (320) ELT 161 (Del).
We also find that in the case of Rajiv Suri Vs. CCE New Delhi Tribunal vide his final order no. C/432/2011-CU (DB) Tribunal has set aside the order of suspension on the ground that there was favourable findings of the Commissioner (A) in respect of penalty imposed upon the CHA under the Customs Act.
11. As such, we find that the impugned order is required to be set aside. Accordingly, we allow the appeal with consequential relief to the appellant by setting aside the revocation of his license, the order of forfeiture of the deposit made by him as also by setting aside the penalty of Rs. 50,000/- imposed upon him.
[Operative part of the order pronounced in the open Court] (B. Ravichandran) (Archana Wadhwa) Member (Technical) Member (Judicial) Bhanu 7 C/53677/2015-CU(DB)