Custom, Excise & Service Tax Tribunal
Fairdeal Enterprise Pvt Ltd vs Kolkata(Admn Airport) on 19 September, 2018
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
EAST REGIONAL BENCH : KOLKATA
Appeal No.C/78279/2018
(Arising out of Order-in-Original No. KOL/CUS/Airport/ADMN/17/2018 dated
11.07.2018 passed by the Commissioner of Customs (Airport & Admin.),
Kolkata)
M/s Fairdeal Enterprise Pvt. Ltd.l ...APPELLANT(S)
VERSUS
Commissioner of Customs (Airport & Admin.), Kolkata
...RESPONDENT
(S) APPEARANCE Shri Shri S. K.Meheta, Advocate for the Appellant Shri S.Guha, AC (AR) for the Revenue CORAM:
HON'BLE SHRI P. K. CHOUDHARY, JUDICIAL MEMBER HON'BLE SHRI BIJAY KUMAR, TECHNICAL MEMBER Date of Hearing/Decision : 19.09.2018 ORDER NO.FO/76822/2018 Per Shri Bijay Kumar :
The appellant being aggrieved with the Order-in-Original No. KOL/CUS/Airport/ADMN/17/2018 dated 11.07.2018 has filed the present appeal. The issue involve in this appeal regarding the revocation of licence granted to the appellant under Regulation 20 of Customs Brokers Licensing Regulation, 2013 (now Regulation 17 of Customs Brokers Licensing Regulation, 2018) against the appellant. The appellant is the holder of Customs House Brokers Licence No.F5 (AAACF6464CCH001) issued by the Commissioner of Customs (Airport & Admin.), Customs House, Kolkata under Regulation 7(1) of CBLR, 2013 to transact Customs Clearance work within the jurisdiction of Kolkata 2 Appeal No.C/78279/2018 Customs Commissionerate. The Custom Broker was also permitted to work under jurisdiction of Delhi Customs. The validity of licence was up to 07.01.2026.
2. After receipt of office report from Order-in-Original No.34/KB/Prohibition/Policy/2017 dated 20.06.2017 passed by the Commissioner of Customs (General), NCH, New Delhi, which was received by the Commissioner of Customs House, Kolkata on 29.06.2018 the prohibition order of Delhi Customs was confirmed by Order-in-Original No.44/KB/Prohibition/Policy/2017 dated 19.07.2017 passed by the Commissioner of Customs (General), New Delhi and the same was also forwarded to the respondent Commissioner of Customs (Airport & Admin.), Kolkata.
3. Based on the above report from Delhi Customs and Order-in-Original confirming the prohibition, the respondent Commissioner of Customs (Airport & Admin.), Customs House, Kolkata suspended the licence of the appellant vide CB Order No.04/2017 dated 31.07.2017. Thereafter show cause notice was issued to the appellant by the respondent Commissioner of Customs (A&A), Customs House, Kolkata under Regulation 20(1) of CBLR, 2014 and an Inquiry Officer was appointed. The Inquiry Officer submitted its report dated 26.12.2017 to the respondent Commissioner. The appellant also submitted his representation before the Commissioner of Customs(Airport & Admin.), Kolkata. Based on the submission by the appellant the CHA licence of the appellant was revoked by the respondent Commissioner of Customs (Airport & Admin.), Kolkata vide Order dated 11.07.2018. It is against this order the appellant is in appeal before us.
4. The CHA licence of the appellant has been suspended by the respondent Commissioner based on the report received from the Delhi Customs House in pursuance of the investigations done by the DRI Headquarters, New Delhi intimation that the appellant has been involved in a case booked by it. The DRI Headquarter New Delhi, had detected a case of fraudulent availment of draw back by some fictitious firm. During the investigation it was found that the customs broker, the appellant and M/s. Pawan Kumar Tiwari has facilitated the 3 Appeal No.C/78279/2018 customs clearance of the exported goods of certain fictitious exporting firms. It was also found by the DRI that the appellant failed to comply with the obligation cast upon them by Customs Brokers Licensing Regulation, 2013. The preliminary investigation report of DRI intimated the involvement of the appellant.
5. Ld. Advocate on behalf of the appellant submits that the appellant appointed Shri Surendra Gupta as Manager to look after the functioning of Delhi Office and to supervise the jobs in respect of clearance of export/import consignments with the help of Delhi Customs authorized employees of CHA firm.
In the year 2016, the appellant attended the clearance of export consignments out of export documents of seven exporting firms were provided by one Shri Bijoy Goel and the documents pertaining to eight other consignments were received from Shri Yogesh Yadav who used to act as intermediary in between the exporters and the appellant. That Shri Vijoy Goel and Shri Yogesh Yadav as intermediary provided the export documents alongwith import export code number of the exporters issued by DGFT, New Delhi Letter of Authority of the exporters issued in favour of the appellant and KYC documents of the exporter as per CBEC Circular No.9/2010-Cus dated 08.04.2010. The appellant diligently acted on the basis of required documents, as prescribed under the Customs Act 1962, as well as under the Customs Broker Licencing Regulation 2013, for such export assignment.
The Shipping Bills with claim of Drawback under Section 75 of the Customs Act 1962 were processed in EDI System and exports were allowed by the 'proper officer' of Customs of Delhi Customs Commissionerate on being satisfied with the documents in terms of Section 50 of the Customs Act 1962. The exporters availed the drawback benefit after exports as per law through their respective banks.
That the DRI, New Delhi started a 'POST EXPORT' investigation, in respect of the export, as the IE Code holders, were not the actual exporters. That during course of investigation, DRI, New Delhi recorded the statements of Shri Surendra Gupta, Manager of the appellant company, Shri Vijoy Goel 4 Appeal No.C/78279/2018 who provided the export documents to Shri Surendra Gupta and Shri Amit Mallick who provided the export documents to Shri Vijoy Goel and Shri Manish Gupta who arranged for documents for obtaining IE Code form DGFT, New Delhi under Section 108 of the Customs Act 1962. But both the summons issued to the exporters at their IE Code address have been returned back by the postal authority with the remark left/not known. None of the exporters were available during the investigation, DRI, New Delhi came to the conclusion that the exporters were fictitious and fraudulently availed drawback benefit. Therefore it was concluded by the DRI, New Delhi that the CB firm was not justified in attending the clearance of export consignments on the basis of the documents, provided by the intermediary. Consequently, the DRI, New Delhi reported the matter to the Commissioner of Customs (General), New Delhi who granted permission to act at Delhi Customs Commissionerate for violation of Regulation 11(a), 11(n) and 17(9) of the Customs Broker Licencing Regulation 2013 on the plea that (i) CB firm has not obtained the Letter of Authority directly from the exporter in terms of Regulation 11(a) of the CBLR 2013, and therefore violated the same, (ii) Also they have not physically verified the functioning of the exporters at their declared address and (iii) Shri Surendra Gupta, Manager of Delhi Office has handled the customs documents without any authority from Customs Department. It was held that the appellant is fully responsible for the act of their employee namely Shri Surendra Gupta and thus violated the Regulation 17(9) of CBLR, 2013.
6. The appellant moved to the Hon'ble Cestat, New Delhi against the confirmation and the prohibition order as mentioned above and Hon'ble Cestat, New Delhi set aside the prohibition order vide Order No.58122/2017 dated 22.11.2017. The appellant submitted a copy of the order of Hon'ble Cestat, New Delhi to the Commissioner of Customs (Airport & Admin.), Customs House, Kolkata with a request to withdraw the suspension order dated 31.07.2017, but no action was taken. Show Cause Notice was issued to the appellant by the respondent for alleged violation of Regulation 11(a), 11(n) and 17(9) of CBLR,2013 and appointed an Inquiry Officer to examine the allegation without providing any relied upon documents. The Inquiry Officer submitted its report after the stipulated period of three months confirming the alleged violation of Regulation as mentioned above without 5 Appeal No.C/78279/2018 considering the submission made by the CB Firm on the basis of facts mentioned in the show cause notice. The appellant made a representation against the Inquiry Report dated 26.12.2017 to the respondent Commissioner in terms of Regulation 20(1) of the CBLR 2013 as the Inquiry has not been carried out in terms of Regulation 20(6) of CBLR 2013 and not to take into consideration of the same as the inquiry has not carried out in terms of Regulation 20(3) of CBLR 2013. Respondent Commissioner granted a personal hearing to the appellant in terms of proviso of Regulation 20(7) of CBLR 2013. The appellant made a request for providing relied upon documents, which was agreed upon by the respondent. The respondent Commissioner provided a copy of statements of Shri Surendra Gupta, Shri Manish Gupta and Shri Amit Mallick recorded by DRI under Section 108 of the Customs Act 1962 but no other particulars of the exporters were provided. It was also submitted to the respondent Commissioner that the Hon'ble Cestat, New Delhi has set aside the prohibition order vide its order dated 22.11.2017 which was the basis of suspension of their licence and issuance of show cause notice and Inquiry Report has been set aside and therefore the suspension of licence of the appellant need to be reviewed ignoring the inquiry report which was not in their favour. The respondent Commissioner have ignored the finding of the Hon'ble Cestat, New Delhi setting aside the prohibition order passed by the Delhi Customs and choose to revoke their CB Licence and ordered for forfeiture of security deposit vide Order-in-Original No. KOL/CUS/Airport/ADMN/17/2018 dated 11.07.2018 on the basis of inquiry report without considering the submission of the CB Firm. In view of the above it was vehemently argued by the Ld. Advocate that impugned order is not sustainable and to be set aside in the appeal.
It was also prayed before us that the appellant having office in Delhi and Kolkata and large number of employees who are rendered to be jobless in view of revocation of their licence.
6. Ld. DR on the other hand supports the impugned order and submits that since investigation by DRI is not completed as yet and therefore the revocation of the licence of the appellant is fully justified.
7. We have heard the rival submissions and perused the appeal records.
6Appeal No.C/78279/2018
8. The issue involves in this case is revocation of CHA licence granted to the appellant by the Respondent Commissioner for their alleged involvement of fraudulent drawback availed by their clients with their alleged help. The cause of action arose in Delhi Customs and prohibition order was issued to them, which resulted suspension and revocation of the appellant's licence in Kolkata Customs House. It is on record that Hon'ble Cestat, New Delhi (supra) has set aside the prohibition order issued by the Commissioner of Customs (General), New Delhi. It is also on record that the said order of the Cestat, New Delhi has been accepted by the Commissioner of Customs, Kolkata vide letter dated 04.12.2017 . No other evidence regarding involvement of appellant is on record before the respondent Commissioner. In view of the above we find that there is no justification for revoking the CHA licence of the appellant at the strength of allegation contained in the order of the Commissioner of Customs, Delhi, which has been set aside by Hon'ble CESTAT, New Delhi and Revenue has not preferred any appeal against the order. .
9. In view of the above we set aside the impugned order and allow the appeal, with consequential benefit if any.
(Operative portion of the order have already been pronounced in the open court.) S/d. S/d.
(P. K. CHOWDHARY) (BIJAY KUMAR)
MEMBER (JUDICIAL) MEMBER (TECHNICAL)
ss