Custom, Excise & Service Tax Tribunal
Rvl Logistics I Pvt Ltd vs New Delhi on 15 October, 2020
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. II
Custom Appeal No. 50543 of 2019
(Arising out of Order-in-Original No. 64/MK/Policy/2018 dated 31 October, 2018
passed by the Commissioner of Customs (Airport & General, New Customs
House, Near IGI Airport, New Delhi-110 037)
M/s RVL Logistics (I) Private Limited Appellant
nd
G-1270, 2 Floor,
Chittaranjan Park,
New Delhi-110 019.
Versus
Commissioner of Customs Respondent
(Airport & General), NCH, New Delhi New Customs House, Near IGI Airport, New Delhi - 110 037.
Appearance Shri Prasant, Advocate - for the appellant Shri Sunil Kumar, AR - for the respondent CORAM:HON‟BLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) HON‟BLE MR. C.L MAHAR, MEMBER (TECHNICAL) Date of Hearing: 15.11.2019 Date of Decision: 15.10.2020 Final Order No. 50868/2020 Anil Choudhary:
This appeal is filed by CHA - RVL Logistics (I) Pvt. Ltd. whereby the impugned order-in-original penalty of Rs. 50,000/- have been imposed under Regulation 20(7) and 22 of CBLR, 2013 for the alleged act of omission and 2 C/50543/2019 commission. Further the proposal to revoke the custom broker licence was dropped.
2. RVL Logistics (I) Pvt. Ltd. (hereinafter referred to as the appellant or CB) are holding CB License No. R- 54/DEL/CUS/2007 valid up to 31.12.2027 issued by New Delhi Customs Commissionerate, is a licensed Customs House Agent/Customs Broker (CHA/CB). The CB is allowed to operate as CB in Mumbai in terms of Regulation 7(2) of the CBLR. 2013 and have been allotted CB No. 11/1606 (Code No. 1754) at Mumbai Customs.
3. The appellant filed 16 bills of entry under Section 59 of the Customs Act, 1962 for warehousing of the goods on behalf of M/s AAA Impex Services for clearance of „Micro SD Cards 128‟, during the period from June 2013 to November 2013 imported from M/s Octagon International FZCO, UAE. The clearance work was undertaken after following KYC procedures on reference from the Freight Forwarder M/s Radiant Maritime (India) Pvt. Ltd.
4. Out of the total 16 bills of entry, three consignments warehoused in September 2013 were entered for export to M/s Palayesh Gostar Hamoon Trading, Iran under 3 C/50543/2019 shipping bill no. 8387231 dated 11.11.2013 as detailed below:
B/E No./date Qty in Assessable Duty
Pcs value (Rs.) involved
(Rs.)
01 3205929/06.09.13 1000 1,33,60,342/ 22,51,805
02 3205941/06.09.13 1155 1,57,65,203 26,57,130
03 3206067/06.09.13 875 1,39,34,119 23,48,512
Total 3030 4,30,59,664 72,57,447
5. The aforesaid 03 Bills of Entry were facilitated under R.M.S. where no Assessment and no Examination was prescribed. The goods were classified under CTH 85235290 with duty @ NIL + 12% CVD + Education Cess + SAD and were declared as MICRO SD CARD 128. The goods were subsequently cleared and deposited at Bonded Warehouse, CWC, Vashi under preventive escort. Subsequently, M/s AAA Impex Services filed Shipping Bill No. 8387231 dated 11.11.2013 for re-export of Micro SD Cards 128 (total 3030 Nos.) and declared the value as Rs. 4,37,05,394/- (Rupees Four Crores Thirty Seven Lac Five Thousand Three Hundred Ninety Four only). At the time of re-export during examination of the said goods by the Shed Staff, it was found that the memory of the Micro SD Cards 128 was "Zero Free space and Zero used space". The print out was taken from the EDI system which 4 C/50543/2019 revealed that M/s AAA Impex Services has re-exported 04 consignments of Micro SD Cards 128 in the past also. These re-exported Micro SD Cards 128 were earlier imported and kept in the Bonded Warehouse at CWC, Vashi.
6. It further appeared that the consignments were declared as of Indian origin in the shipping bill and of UAE origin in the bill of entry, whereas the marking on the goods suggested that the goods were of Taiwan origin. Thus, it appeared that there is mis-declaration both at the time of import and again at the time of export as regards description, country of origin and value.
7. Following investigation, show cause notice was issued to the importer - M/s AAA Impex Services and others dated 11 March, 2015 proposing to hold the goods attempted to be re-exported by resorting to mis- declaration with total FOB value of Rs. 4,37,05,394/- liable to confiscation under Section 113 (h)&(i) of the Customs Act with further proposal to notionally confiscate the previous re-exports covered under the four shipping bills dated 15 June to 18 July, 2013 having total FOB value of Rs. 5,29,14,425.86 as the value addition was less than 15% in contravention of para 2.35 of FTP 2009- 5 C/50543/2019 2014, with further proposal to impose penalty on partner of M/s AAA Impex Services Mr. Akshaya Singhal. The said show cause notice also proposed to impose penalty on the appellant CB - RVL Logistics (I) Pvt. Ltd. and its Director Mr. Shijo Chummar under Section 114(iii) and 114 AA of the Customs Act. The said show cause notice was adjudicated by the Additional Commissioner vide order in original dated 31 October, 2016 ordering absolute confiscation of goods under Shipping Bill No. 8387231 having FOB value 4,37,03,394/- under Section 113(h)(i) of Customs Act along with order for notional confiscation of goods exported earlier vide aforementioned shipping bill in June/July, 2013. Further penalty was also imposed on M/s AAA Impex Services and its partner Mr. Akshaya Singhal. Penalty of Rs. 20 lakhs was also imposed on the appellant CB - RVL Logistics (I) Pvt. Ltd. and Rs. 10 lakhs on its Director Shri Shijo Chummar under Section 114AA of the Act.
8. The appellant CHA had appealed against the earlier order in original dated 31.10.2016 wherein penalty on the CHA company was reduced and penalty on its Director was set aside and CB firm is in further appeal before this Tribunal.
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9. Thereafter show cause notice dated 14 May, 2018 was issued on the appellant - CB referring to the aforementioned bills of entry and shipping bills filed for M/s AAA Impex Services. Pursuant to investigation and enquiry emerged that M/s Optagun International in collusion with M/s AAA Impex Services have participated in Hawala operations of currency in terms of para 2.35 of FTP 2009-2014 by export of such goods to Iran which have been imported against payment of convertible currency is permissible against payment in Indian rupees subject to at least 15% of value addition. But without such compliance M/s AAA Impex Services had attempted to improperly re-export the goods by resorting to mis- declaration as regards country of origin and also value at the time of both import and export. Further, the goods were held liable to confiscation under Section 113(h)&(i) of the Customs Act.
10. It is further alleged that appellant CHA has erred and not complied with the provisions of Regulation 11(e) and
(n) of CBLR,, 2013 as apparently they have not exercised due diligence to ascertain the correctness of information which they imparted to their client with reference to the work related to M/s AAA Impex Services and further they 7 C/50543/2019 have not observed KYC norms with respect to their client. Accordingly, enquiry officer Ms. Anamika Singh, Deputy Commissioner of Customs was directed to enquire and submit report and further it was proposed for the alleged violation of Regulation 11(e) and (n) of CBLR, 2013, as to why not CBLR licence be not revoked and part or the whole of the security deposit be not forfeited with further proposal to impose penalty under Regulation 20(7) read with Regulation 22 of CBLR, 2013.
11. The appellant appeared before the enquiry officer and contested the allegations. However, the enquiry officer recommended for further action in the matter, as it appeared that the appellant have contravened the provisions of Regulation 11(e) and (n) of CBLR, 2013 vide enquiry report dated 10.8.2018.
12. Vide the impugned order, the adjudicating authority on contest, the learned Commissioner was pleased to impose penalty under Regulation 18 read with Regulation 20(7) and 22 of CBLR, 2013, dropping the proposal of revocation and forfeiture of security deposit. Being aggrieved the appellant - CB in appeal before this Tribunal.
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13. Learned Counsel for the appellant urges that the findings of the enquiry officer are not sustainable on merits. Enquiry report is based on the premises that the appellant failed to convey cargo clearance related information for export, and thus they did not exercise due diligence in discharging their obligation under Regulation 11(e) of CBLR. Further, the appellant did not verify the antecedents, correctness of IEC number, identity of their client and functioning of the client at the declared address and thus failed to comply with the provisions of KYC under Regulation 11(n) of CBLR, 2013. It is further urged that the enquiry officer has primarily reproduced the findings in the earlier order in original dated 5.11.2016 in the case of the importer and in the case of M/s AAA Impex Services and mechanically confirmed the allegations in the show cause notice, which is fit to be rejected. Further, the observations of the enquiry officer that the role of customs broker is important in filing the document for clearance and they should verify the authenticity and correctness of the documents to ensure compliance, thus there is violation of Regulation 11(e) of CBLR, 2013.
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14. Learned Counsel further urges that Regulation 11(e) requires a custom broker to exercise due diligence to ascertain the correctness of the information which he imparts to a client with reference to any work related to clearance of cargo or baggage. Further, it is urged that there is no specific lapse on the part of the appellant CB. Further as per the facts on record the appellant CB did not impart any information to their client which resulted in alleged mis-declaration. Neither any case of collusion or abetment is made out. In fact the appellant communicated every communication from the department to their client, as regards clarification sought from time to time. There is no case of any mis-guidance or any mala fide on the part of the appellant CB. Thus the charge of violation of Regulation 11(e) is not established and fit to be set aside.
15. As regards the charge of Regulation 11(n), the said regulation provides that a CB shall verify the antecedent, like correctness of IEC number, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. Learned Counsel urges that there is no dispute as regards identity of the importer, correctness of 10 C/50543/2019 their IEC number. Further, there is no case of dubious antecedents of the client - M/s AAA Impex Services. The appellant have relied upon the IEC number and other KYC documents received by them through the reliable intermediary M/s Radiant Maritime India Pvt. Ltd. Further the appellant CB had procured and furnished the requisite documents like KYC details in the prescribed format, authorisation letter, self attested copy of IEC, self attested PAN, letter of registration with Sahar Customs, Bank AD code letter, bank statement copy and VAT registration copy, which are our record. The learned Commissioner in the impugned order have acknowledged the identity of the client of the appellant, correctness of IEC number and obtaining of KYC documents. There is no lapse pointed out as regards the identity and antecedent of the client and functioning at their declared address. Further from the very beginning of the enquiry by the customs department the partner of the importer - M/s AAA Impex Services have participated in the investigation and also in the adjudication proceedings. Thus the finding recorded by learned Commissioner as regards violation of Regulation 11(n) of CBLR is not sustainable and fit to be set aside.
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16. Further, the learned Counsel urges that the information filled in the clearance documents like description, value, country of origin etc. have been entered as per the information and documents provided by the client. There is no case of any forgery or fraud committed by the appellant CB. Neither any case of collusion or abetment is made out with respect to the mis-declaration found, which is wholly attributable to client - M/s AAA Impex Services. It is further a matter of record that their client - M/s AAA Impex Services have not disowned any of the documents of clearance. Nor there is any allegation by the client of any mis-declaration made at the instance of the appellant CB. Further under the facts and circumstances, there is no way the appellant could have verified the description, value or the country of origin, and the same were as per document provided to them. Further, there is no allegation nor any case made out that the appellant CB has knowingly used any documents which are not true or dubious. Further there was no apparent reason for the appellant to doubt any of the documents provided to them by their client. Moreover under the scheme of the CBLR, 2013, the appellant CB is required to vigilant and if anything irregular comes in his knowledge, than to advise his client 12 C/50543/2019 properly and if required to inform the appropriate custom authority. Further, the allegation of collusion is also not made out. There is no case of any illegal gains made by the appellant CB. Thus, the charges against the appellant are not proved and the same are based on assumptions and presumptions. Further in the facts of the case there is no loss of revenue to the exchequer and accordingly, penalty imposed is fit to be set aside.
17. Learned Authorised Representative for Revenue Shri Sunil Kumar relies on the impugned order and also filed para-wise reply to the appeal in support of the impugned order.
18. Having considered the rival contentions, we find the charge of violation under Regulation 11(n) as regards compliance of KYC norms is not established as admittedly the appellant have received several documents from their client viz. PAN card, KYC details in prescribed format, authorisation, self attested copy of IEC etc. which corroborate the genuineness of their client - M/s AAA Impex Services and their working at their given address. Further, there is no document which raises suspicion. Accordingly, we hold that the charge under Regulation 11(n) is not established. As regards the charge under 13 C/50543/2019 Regulation 11(e), we find that there is no act of omission or commission which indicates lack of due diligence to ascertain the correctness or any information imparted by the appellant to their client with reference to the work handled by them. Further, we find there is no case made out of any collusion or abetment. Further, no case of any illegal gains on the part of the appellant CB is made out, indicating their collusion as alleged. Further no case is made out that the appellant CB have knowingly allowed the alleged mis-declaration by their client. It is established principle of law that mere facilitation without knowledge of consequences, would not amount to abetting an offence.
19. Accordingly, we allow this appeal and set aside the impugned order. The appellant is entitled to consequential benefit in accordance with law.
(Pronounced in Court on 15.10.2020) (Anil Choudhary) Member (Judicial) (C.L. Mahar) Member (Technical) RM