Custom, Excise & Service Tax Tribunal
Prethvisha Logistics Pvt Ltd vs Kolkata(Port) on 18 July, 2024
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO.2
Customs Appeal No.77736 of 2018
(Arising out of Order-in-Original No.KOL/CUS/COMMISSIONER/PORT/40/2018 dated
27.04.2018 passed by Commissioner of Customs (Port), Kolkata.)
M/s. Prethvisha Logistics Pvt.Ltd.
(HMP House, 1st Floor, Room No.109 & 107, 4, Fairlie Place, Kolkata-700001.)
...Appellant
VERSUS
Commissioner of Customs (Port), Kolkata
.....Respondent
(15/1, Strand Road, Custom House, Kolkata-700001.) WITH Customs Appeal No.78877 of 2018 (Arising out of Order-in-Original No.KOL/CUS/COMMISSIONER/PORT/40/2018 dated 27.04.2018 passed by Commissioner of Customs (Port), Kolkata.) Shri Palash Banerjee, Director (HMP House, 1st Floor, Room No.109 & 107, 4, Fairlie Place, Kolkata-700001.) ...Appellant VERSUS Commissioner of Customs (Port), Kolkata .....Respondent (15/1, Strand Road, Custom House, Kolkata-700001.) APPEARANCE Shri K.K.Sanyal, Consultant for the Appellant (s) Shri Tariq Suliaman, Authorized Representative for the Revenue CORAM: HON'BLE SHRI R. MURALIDHAR, MEMBER(JUDICIAL) HON'BLE SHRI RAJEEV TANDON, MEMBER(TECHNICAL) FINAL ORDER NO. 76358-76359/2024 DATE OF HEARING : 08.07.2024 DATE OF DECISION : 18.07.2024 Per : RAJEEV TANDON :
M/s. Prethvisha Logistics Pvt.Ltd. and Shri Palash Banerjee had filed the impugned appeals assailing the Order-in-Original No.KOL/CUS/COMMISSIONER/PORT/40/2018 dated 27.04.2018 issued on 13.05.2018, being aggrieved by the imposition of penalty of Rs.20.00 2 Customs Appeal Nos.77736 & 78877 of 2018 Lakh each imposed on them under section 112a(ii) of the Customs Act, 1962.
2. M/s. Prethvisha Logistics Pvt.Ltd. is a CHA firm and Shri Palash Banerjee is the Director of the said firm, who have been undertaking import export jobs for around five years. The facts of the case are that the appellant had undertaken clearance job of import of nine consignments of various consumer goods, imported by M/s. Aakash Exports during the period May 2013 to August 2013. Out of nine consignments involved, in respect of 3 consignments covered vide Bill of Entry No.2128503 dated 14.05.2013, 2097821 dated 10.05.2013, 2125264 dated 14.05.2013 were duly assessed by the department and allowed clearance by the said officers. The importer said to have imported a variety of dutiable/consumer goods vide the said Bills of Entry. Out of the aforesaid three consignments, one consignment was actually cleared for home consumption and two consignments were awaiting physical examination, when DRI interdicted the said imports.
Subsequently, six more containers of the same importer that landed in due course and for which Bills of Entry had not been filed, by then were also examined and taken up for investigations. It was noticed that in addition to the said imported goods certain undeclared goods as well as goods in excess of the declaration were also found. In due course import documents for these six shipments were also filed through the above named CHA, the appellant herein.
3. It was evident from the investigations undertaken by the department that the subject imports were grossly mis-declared and undervalued. While appropriate action was also initiated under the Customs Act against the importer, the two appellants herein were also made noticees for imposition of penalty under section 112(a) as well as under section 114AA of the Customs Act read with provisions of Regulation 20 of the Customs House Agents Licensing Regulation (CHALR), 2004 for their purported acts of omission and commission.
3Customs Appeal Nos.77736 & 78877 of 2018
4. We have heard at length the Ld.Consultant for the appellant as well as the Ld.AR for the department and have also perused the case records.
5. At the outset, the relevant provisions referred to above are enumerated hereunder:
"SECTION 112. Penalty for improper importation of goods, etc.
-- Any person, -
(a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or
(b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable, -
(i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty [not exceeding the value of the goods or five thousand rupees], whichever is the greater;
[(ii) in the case of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten per cent. of the duty sought to be evaded or five thousand rupees, whichever is higher :
Provided that where such duty as determined under sub-section (8) of section 28 and the interest payable thereon under section 28AA is paid within thirty days from the date of communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent. of the penalty so determined;] 4 Customs Appeal Nos.77736 & 78877 of 2018 [(iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value thereof, to a penalty [not exceeding the difference between the declared value and the value thereof or five thousand rupees], whichever is the greater;
(iv) in the case of goods falling both under clauses (i) and (iii), to a penalty [not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest;
(v) in the case of goods falling both under clauses (ii) and (iii), to a penalty [not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest.]"
SECTION . 114AA. Penalty for use of false and incorrect material - If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods.] "REGULATION 20. Suspension or revocation of licence. - (1) The Commissioner of Customs may, subject to the provisions of regulation 22, revoke the licence of a Customs House Agent and order for forfeiture of part or whole of security, or only order forfeiture of part or whole of security, on any of the following grounds, namely :-
(a) failure of the Customs House Agent to comply with any of the conditions of the bond executed by him under regulation 10;
(b) failure of the Customs House Agent to comply with any of the provisions of these regulations, within the jurisdiction of the said Commissioner of Customs or anywhere else;
(c) any misconduct on his part, whether within the jurisdiction of the said Commissioner of Customs or any where else 5 Customs Appeal Nos.77736 & 78877 of 2018 which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station. (2) Notwithstanding anything contained in the sub-regulation (1), the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs House Agent where an enquiry against such agent is pending or contemplated."
6. The following table hereinbelow indicates the variance between the declared and determined value of the import cargo. The appellants have not challenged the value as determined by the Proper Officer under Section 14 of the Customs Act read with the provisions of the Customs Valuation Rules :
Sl B/E No. Declared Admitted Determined Total Diff. in N & Date value(Rs) duty(Rs) value(Rs) Duty(Rs) Duty o Confirmed( Rs) 1 2128503 4,33,663 1,20,289 95,20,402 27,07,602 25,87,313 14.05.201 3 2 2097821 3,89,669 1,10,747 77,44,394 22,02,506 20,91,759 10.05.201 3 3 2806407 25,91,991 7,37,162 74,14,650 21,08,727 13,71,565 25.7.2013 4 2923787 31,71,912 9,16,954 95,86,169 27,26,306 18,09,352 6.8.2013 5 2922947 27,65,256 7,99,778 77,28,058 21,97,860 13,98,082 6.8.2013 6 2125264 7,79,336 2,24,788 28,69,510 8,16,089 5,94,493 14.5.2013
7 2814129 9,48,447 2,74,561 31,61,280 9,19,685 6,45,124 25.7.2013 Grand Total : 1,10,80,274 31,84,279 4,80,24,463 1,36,78,775 1,04,97,688
7. As noted from case records, each of the said import shipments comprised of various consumer dutiable goods of a wide variety such as plastic showpieces, cutlery set, photo frames, 3D posters, head 6 Customs Appeal Nos.77736 & 78877 of 2018 massagers, packing paper, bouncing balls, binoculars, party poppers, table lamps, water bottles, writing boards, pen stands, paper holders, ladies purses, buckles, etc. However, in addition to some of these import goods as declared, a large variety and quantity of concealed goods were also found in the cargo containing glass chatons, car lamps, LED rechargeable lights, emergency lights, dolls, binoculars etc. amongst others - an elaborate entry of which constitutes a part of the show cause notice annexures (A1-A2-A3; B1-B2-B3; C1-C2, D1-D2; E1-E2; F; G; & H).
8. In several cases it has been brought out from the facts of the case that the description in quantity of goods declared in the Bills of Entry are at complete variance with the IGM declaration and the declaration in the Bill of Lading as were obtained from respective CFS. However, the Bills of Lading subsequently submitted by the importer matched with the Bill of Entry in respect of the description of the goods. Therefore, leading to the obvious conclusion that the Bills of Lading submitted by the importer were manipulated and subsequently 'glass chaton was added thereto. Likewise, the RSP of some of the items declared in the Bill of Entry did not tally with the MRP labels that were found physically affixed on the goods. Similarly in certain cases while description of goods were found as per declaration, but the number of cartons found were far in excess thereby establishing the fact of non- declared goods. The annexures to show cause notice indicate by way of comparative charts the goods that were declared vis-à-vis the goods that were found far in excess of the declaration.
9. The department's case being that the imports were made resorting to illegal acts like concealing of high-valued goods and gross misdeclaration of description, quantity and value of goods imported, supporting the same by way of fake and bogus, manipulated and forged documentation like invoices and packing lists etc. 9.1 Cyber forensic examination of the laptop seized from the Director of the CHA firm Shri Palash Banerjee, the appellant herein was also undertaken and it was ascertained that most of the files were not in 7 Customs Appeal Nos.77736 & 78877 of 2018 readable condition as they appear to have been deleted after formatting while in some cases files were found to be maintained in apparently unknown softwares. Nonetheless, the documents as could be read out and taken from hard-discs revealed at least, in 9 cases excel sheet under heading 'packing list' containing values of different mixed items and other particulars under column heading of description, item no., Pcs/Ctn, qty, price, amnt, t. amnt, CBM, shop No., Ph. No., Payment terms, S/M, carton no. pertaining to some of the previous imports made by the said importer, handled by the appellants as a Customs Broker. However, one such excel sheet maintained for goods imported vide container No.KKFU 7279459 (Bill of Entry No. 551289 dated 13.07.2010) was also retrieved. In the said excel sheet, number of the container is mentioned; date of loading is given as 'June 10', and the value of the goods has been mentioned as 376616 RMB equivalent to Rs.26,36,312/- (approx.). Upon verification it was found out that the said goods imported vide above referred Bill of Entry by the importer M/s. Aakash Exports, through the appellants, were supplied by M/s. Nero Overseas, China and declared as US Dollar 6128.72 i.e. to say the goods were assessed for Rs.4,34,058/- against the actual value of the goods being Rs.26,36,312/- (approx.) as aforesaid. Likewise similar stories were repeated in respect of other import consignments. The proprietor of the importing firm Shri Rajkumar Naptha in the course of investigations admitted to his complicity in facilitation of undeclared, misdeclared goods. In the adjudication undertaken of the subject imports, the declared transaction value under section 14(1) of the Customs Act, 1962 in each of these cases was rejected and the goods re-assessed at values as arrived at by the department in accordance with the prescriptions of the Valuation Rules. Offending goods were confiscated, allowed redemption and the importer amongst others also subjected to penal liabilities.
10. As the importer is not in appeal before us, the facts pertaining to the matter of import, connected with the importer, are not being 8 Customs Appeal Nos.77736 & 78877 of 2018 elaborated any further and the following paras dwell on the role of the CHA and the Director of the firm who are the appellants herein.
11. The Ld.Commissioner vide his order observes the following :
"48. As regards to the culpability of M/s. Prethvisha Logistics Pvt. Ltd, the CHA firm and Shri Palash Banerjee, the Director, I find that he has admitted that they were doing the job of the importing firm for the last five years and the main person of Akash Exports was Sri Raj Kumar Nahata; that there would be 7- 8 consignments of M/s. Akash Exports which were pending for clearance; out of those, he received full set of documents i.e. Invoice, Packing Lists and Bills of Lading for three consignments and accordingly Bills of Entry were filed; that for the rest he had received copy of IGM details and Bills of Lading only; that he received the copies of invoices bearing No.YIG/AKS/741 dated 23.04.13 and YIG/AKS/739 dated 23/04/13 ( in respect of Bills of Entry No.1218503 dated 14.05.13 and 2097821 dated 10.05/13, respectively) and Packing Lists through e-mail or hard copy by hand from the importer and the invoices came to him in unsigned condition; that he filed Bills of Entry on the basis of these documents and Customs clearing was processed; that so far he remembered in most of the consignments of M/s. Akash exports, the invoices and packing lists were unsigned; that M/s. Akash Exports usually did not give them the original signed copy of Invoices.
48.1 I find that M/s. Prethvisha Logistics Pvt.Ltd. Agency, the CHA firm, have aided and abetted the acts of smuggling by M/s.Akash Exports. They had the copies of Bills of Lading and invoice for the containers for which no Bill of Entry was filed. They submitted improper documents such as unsigned Invoices and Packing lists in relation to import of the said three import consignments. As CHA, it is their obligation under Regulation 13 of the Customs House Agents Licensing Regulations 2004 [now Regulation 11 of CBLR, 2013] to advise their client to comply with 9 Customs Appeal Nos.77736 & 78877 of 2018 the provisions of the Customs Act, but they have not discharged their obligations under CHALR'04 [NOW CBLR, 2013]. They handled import consignments on the basis of unsigned documents which is illegal. They had similarly handled a large number of past consignments of M/s. Akash Exports which too would have been cases of smuggling and evasion of duty as the subject case. In other words the CHA was well complicit in all such cases of imports by M/s. Akash Exports. The case of Bill of Entry NO.551289 dated 13.07.2010 corresponding to Container No.KKFU7279549 is a clear example where forensic evidences prove such systematic undervaluation done in past cases. 48.2 I therefore, find that the CHA, M/s. Prethvisha Logistics Pvt.Ltd. and Shri Palash Banerjee, Director, Prethvisha Logistics Pvt.Ltd. for their act of omission and commission and also for abetment of doing of the illegal import have rendered themselves liable for penal action under Section 112(a) & 114AA of the Customs Act, 1962."
12. It is therefore brought out from the records that the present case is by and large a case of smuggling of dutiable goods, grossly mis-declaring their value, quantity, description including non- declaration of items like chatons imported in the guise of a bonafide import shipment. The facts of the case point out that such a nefarious act on the part of the importer along with his cahoots, to which the appellants were also a party, were being perpetuated for quite a long time, but as the saying goes no crime can remain unnoticed for far too long and it will come to light one day. So be it, the aforesaid act of smuggling. In two of the above referred shipments, the act of smuggling was completely exposed while in at least three other cases the importer along with his cronies, including the appellant and with his active connivance could manage to file Bills of Entry much after DRI's intervention of the cargo, having been left with no option but to declare the contents truthfully. As evident from the table incorporated 10 Customs Appeal Nos.77736 & 78877 of 2018 in Para 6 large scale undervaluation of import goods is obvious. The extent of duty defrauded is anybody's guess as the importer had been regularly importing these goods for quite a bit of time. The forensic evidence retrieved to whatever extent is sufficient enough to establish the scale of undervaluation. This, was undertaken both in respect of past shipments as well as the current imports relevant to the present case, personally benefiting the importers along with others involved and defrauding the Government of its legitimate dues.
13. In view of the aforesaid we are of the view that the appellants have not been able to justify a case for waiver of penalty. However, considering the facts and circumstances of the case, that the appellant was playing upon the instructions of the importer though with self- serving intents; the fact that the appellants failed to discharge their obligation in law, the fact of filing the Bill of Entry on the basis of unsigned invoices and such other considerations as brought out in the investigations, the fact that digital mapping and cyber forensic examination and imaging of the appellant's hard disks and CPUs and laptops seized from their office revealed explosive documentary evidence exposing the entire racket, no case for completely setting aside the penal liabilities imposed is made out by the appellants. We feel that ends of justice shall be met by imposing penalty of Rs.4.00 Lakh (Rupees Four Lakh only) on M/s.Prethvisha Logistics Pvt.Ltd. and Rs.1.00 Lakh (Rupees One Lakh only) on Shri Palash Banerjee under Section 112(ii) of the Customs Act.
14. The appeals are disposed off in aforesaid terms.
(Order pronounced in the open court on 18 July 2024.) Sd/ (R. MURALIDHAR) MEMBER (JUDICIAL) Sd/ (RAJEEV TANDON) MEMBER (TECHNICAL) sm