Custom, Excise & Service Tax Tribunal
M|S. Shuvam Enterprises vs Kolkata-Ii on 6 May, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO.2
Customs Appeal No. 75278 of 2023
(Arising out of Order-in-Original No. Kol/Cus/Airport/Admn/08/2023 dated 18.02.2023
passed by Commissioner of Customs (Airport & ACC))
M/s. Shuvam Enterprises
Kanchana Building,
7/1, Russel Street,
3rd Floor, Flat No.3B,
Kolkata-700 071
...Appellant
VERSUS
Commr. of Customs (Airport & Admn.)
15/1, Strand Road, Kolkata-700 001
.....Respondent
APPEARANCE Mr.Arijit Chakraborty, Advocate for the Appellant Mr.Tariq Suleman, Authorized Representative for the Revenue CORAM: HON'BLE SHRI R. MURALIDHAR, MEMBER(JUDICIAL) HON'BLE SHRI RAJEEV TANDON, MEMBER(TECHNICAL) FINAL ORDER NO. -76181/2025 Date of Hearing : 09.04.2025 Date of Decision : 06.05.2025 Per : RAJEEV TANDON :
The instant appeal is filed by the appellant aggrieved by the Order-in-Original No.-KOL/CUS/AIRPORT/ADMN/08/2023 dt.18.02.2023.
2. Vide the impugned order, the Commissioner of Customs has revoked the Customs Broker license of the appellant, besides imposing a penalty of ₹50,000 in terms of Regulation 18 of CBLR 2018 for violation of Regulation 10 (d) thereof.
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Customs Appeal No.75278 of 2023
3. The ld Counsel for the appellant submits that in April 2018, the appellant had attended to clearance of four export consignments of Indian gods for one Neeraj Marble & Tiles, Siliguri to Bhutan through LCS Jaigaon. Subsequent to exports, the Siliguri GST Commissioner, initiated investigations against the exports made by the exporter, for claim of GST benefit without physical exports against 29 shipping bills of which the impugned four shipping bills were attended by the appellant.
4. A show cause notice dated 15.02.2021 was issued to Neeraj Marbles & Tiles by the GST authorities, where Customs Broker was not made a party to. Subsequently a notice dated 7 June 2021 for imposition of penalty was issued to the appellant. As per the learned Counsel, the said show cause notice is still pending finalization. In the meanwhile, the Commissioner of Customs, issued a prohibitory order dated 28.06.2021, which after following the due process, culminated in the impugned order in original. Initially, the Customs Broker license of the appellant was suspended for violation of Regulation 10(d) and 10(e) of the CBLR 20181. It is the foremost plea of the appellant that while the exports were made on 23.04.2018 and 25.04.2018, their license has been revoked in terms of CBLR 2018, which came into force on 14.05.2018 and therefore the action of the Commissioner is patently wrong and uncalled for.
5. The learned AR on the other hand, supports the order and justifies the revocation of the Customs Brokers' licence by the Commissioner.
6. We have heard the two sides and perused the case records. We note, that the present case concerns, allegation of the involvement of the Customs Broker in the fraud perpetuated with regard to alleged paper exports to Bhutan through the said LCS.
1 The Regulation 3 Customs Appeal No.75278 of 2023
7. The contention of the department is that the exporter in conjunction with the Customs Broker availed investment exemption from GST on goods by showing them as exported to Bhutan, but actually selling the same in domestic market without issue of invoices. The department has alleged that the Customs Broker prepared fake shipping bills in favour of the exporter, causing huge evasion of GST and therefore the Broker had violated Regulation 10(d) of the Regulations as they had not advised the exporter to comply with the provisions of the Customs Act/Allied Act and also did not bring the wrongdoing to the notice of the department. It is also alleged by the department that the Customs Broker had violated Regulation 10(e) as the Customs Broker did not ascertain the correctness of information and did not advise his client to refrain from illegal acts of declaration. The learned Adjudicating Authority has relied on the enquiry officers report in support of his order.
8. Learned Counsel for the appellant has submitted before us that the enquiry officer took six months against the stipulated time of 90 days for completion of the enquiry as specified in Regulation 17(5) ibid. We find that this plea of the appellant has, however, been addressed in the order itself as noted in para 18.1 and has elaborated upon the fact of repeated adjournments sought by the appellant or his employee Bijender Singh. It is pointed out in the order that the GST Commissioner initiated investigations into the fraudulent exports and issued a notice to the exporting firm on 15.02.2021. Subsequently, a notice for penalty was also issued to the appellant. This led to the suspension of the Customs Broker's license vide order dated 19.07.2021 in terms of Section 60 for the violation of the aforesaid provisions of the Regulations.
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Customs Appeal No.75278 of 2023
9. It may be pertinent to refer to the findings of the Adjudicating Authority in para 18.4 where it is stated as under
18.4 Inquiry Officer tried to establish in his Inquiry Report that the goods have not been exported. Bhutan being Land Locked Country, export is carried out by Land Route. There is a possibility of diversion of goods enroute after granting LEO by proper officer of Customs by the exporter and sold in the Local Market. The funation of CB is over after LEO is granted. In Bhutan Government's letter dated 29.01.2021 regarding receipt of various consignments of M/s NMT Siliguri and others during the period from 23.04.2018 to 25.04.2018 through Jaigaon Land Customs Station some of the consignment attended by CB appear which has not been taken into consideration.
These submissions of the CB are based on suppositions without any factual basis. Besides the admission of Shri Bijender Singh, CB's representative, that no physical goods had been exported from Jaigaon LCS, the IO has established based on records viz.seized Shipping Bills, export information obtained from Jaigaon Land Customs Station and import details of Phuontsholing(in Bhutan & Port of Discharge of the goods) that exports did not take place. It has been shown that the details in the consignments actually received in Bhutan do not match the impugned Shipping Bills in terms of Quantity, description, value and even LEO date. It has also been brought on record that no Bank Realisation Certificate has been produced for proceeds against the purported 'exports'
10. For ease of reference, Regulations, 10(d) and 10(e) of the said Regulations are enumerated here under:
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Customs Appeal No.75278 of 2023
10. Obligations of Customs Broker. -- A Customs Broker shall --
(d) advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of non- compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be;
(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 baggage;
11. In order to appreciate the complete factual matrix and its analysis as carried out by the Enquiry Officer, the following paras of his report are scanned herein below:
Table-A(Goods that have been exported from India as per declaration in SB):
Inquiry Report under C.B.L.R 2018 in the matter of C.B M/s. Shuvam Enterprises Sl. Challan Shipping Date Invoice Date Amount Item Chapter CTH Qty LEO date No. No. Bill No. No. No Descrip (Kg ) tion
1. ABLFS5 4384028 23/4/20 80 20/4/20 18 310341 1 Vitrified 69074010 600 0 23/4/20 18 594BCH 18 Tiles 001 2 Vitrified 69074010 Tiles
2. ABLFS5 43845 61 23/4/20 92 20/4/20 435400 1 Vitrified 69074010 100 23/4/2018 594BCH 18 18 Tiles 00 002 2 Vitrified 69074010 3 Ceramic 69074010 wall Tiles
3. ABLFS5 4384227 23/4/20 1/1 20/4/2018 485000 1 Vitrified 69074010 900 0 23/4/2018 594BCH 18 Tiles 003 2 Vitrified 69074010
4. ABLFS5 4438354 25/4/20 88 20/4/20 18 465025 1 Vitrified 69074010 700 0 2/5/2018 594BCH 18 Tiles 004 2 Vitrified 69074010 Tiles 3 Vitrified 69074010 Tiles 6 Customs Appeal No.75278 of 2023 Table-B(Goods that have been received in Bhutan at Phuentsholing Gate ): as per RUD 6 of the SCN dated 24.09.2021 Check Supplier Entry Market Chapter Btc Code Full Btc Quantity ST Ass post Name Date Source Description Id Description Unit Value Name Phuentsho NIRAJ 26/4/2018 Open Articles of 6802.21. Marble, KG 6800.00 890000.00 ling Gate MARB stone, 00 travertine, M LE & plaster, alabaster TILES cement, asbestos, mica or similar materials.
Phuentsho NIRAJ 23/4/2018 Open Articles of 6810.19. Other NMB 1967.83 1213680.00 ling Gate MARB stone, 00 LE & plaster, TILES cement, asbestos, mica or similar materials.
Phuentsho NIRAJ 25/4/2018 Open Ceramic 6907.21.00 Of a water KGM 500.00 71,680.00
ling Gate MARB Products absorption
LE & coefficient
TILES by weight
not
exceeding
0.5%
Phuentsho NIRAJ 25/4/2018 Open Ceramic 6907.21.00 Of a water KGM 230.00 14,400.00
ling Gate MARB Products absorption
LE & coefficient
TILES by weight
not
exceeding
0.5%
Phuentsho NIRAJ 23/4/2018 Bond Ceramic 6907.21.00 Of a water KGM 195.00 60,937.50
ling Gate MARB Products absorption
LE & coefficient
TILES by weight
not
exceeding
0.5%
1. The Seized Shipping Bills, export information obtained from Jaigaon Land Customs Station and import details of Phuontsholing in Bhutan & Port of Discharge of the goods) were reconciled. Table A is based on Shipping Bills details declared by the Exporter with the help of CB. Table B is based on goods received at import location in Bhutan i.e Relied upon documents No. 6 of the SCN dated 24.09.2021 is a report of Royal Government of Bhutan, evidencing date-wise receipt of the consignment from India which is indicating the name of check post, exporters, entry date, description of goods, and chapter heading of Bhutan Customs and weight etc. It is observed that the said details are mismatching in terms of QTY, description, value and even LEO date (In case of SB 4438354 dated 25/4/2018, the LEO date is 02/05/18 in system, whereas all the 5 consignments exported to 7 Customs Appeal No.75278 of 2023 Bhutan have reached Bhutan before 26/04/2018. Therefore, the data appears not reliable wrt to ground situation. This is also corroborated by Shri Chandan Chatterjee letter dated 08.02.2022. He has stated that "Regarding variation of weights and value it may be mentioned that perhaps the same has been recorded as per declaration of the Bhutan Importer made at the time of clearance of the goods from Bhutan Customs and not as per Indian export documents. The difference of weight and value may kindly be ignored'. Since Shri Chandan Chatterjee himself has not relied upon this data, therefore his claim vide submission dated 08.02.2022 that 4 consignments have reached Bhutan cannot be relied based on same data. Subsequently the CB also cannot ask for relief on the basis of this data.
2. Shri Bijender Singh is the employee of the alleged CB; who has been alleged to have made fake SB/documents in favor of the exporters. Shri Bijender Singh, vide statement dated 19/06/2019 had accepted his involvement in the fraud. Now, Shri Bijender Singh vide statement dated 03.01.2022 has stated that he had completed all the customs formalities and handed over the goods for export and that he did not notice any discrepancy in shipping bills vis-à-vis goods. Shri Bijender Singh, vide voluntary Affidavit dated 06/07/2019 and statement dated 03.01.2022, has refuted his earlier statements and stand of his involvement in the fraud. After going through the earlier statement dated 19/06/2019 of Shri Bijender Singh, it is seen at answer to question 11, he has stated that his only source of income is this job and requested to not to initiate any action against him. From this, it appears that, Shri Bijender Singh was under obligation and pressure to not to lose his job / source of his only income, thereby the voluntary Affidavit dated 06/07/2019, in favour of his employer/CB, cannot be said to be voluntary. So appears case with statement dated 03.01.2022.
3. Shri Sanjay Agarwal use to get @3% to 4% of the invoice value as commission which he admitted vide statement dated 18/06/2019 and 08/08/2019, Shri Ram Bhagat Sharma agreed to it, vide statement dated on 8/11/2019 and 14.02.2020. 8
Customs Appeal No.75278 of 2023 Shri Sanjay Agarwal or Shri Bhagat Ram Sharma has not backtracked from their stands or statements nor have they filled any appeal against this matter. It is neither contended by the CB that Shri Sanjay Agarwal or Shri Bhagat Ram Sharma have denied that the said violation of evasion of payment of GST. It is worth mentioning that neither Shri Chandan Chatterjee nor Shri Bijender Singh has requested for cross examination of Shri Sanjay Agarwal or Shri Bhagat Ram Sharma and that they both have merely denied all the allegations of the SCN dated 24/09/21. But they have not submitted or brought on record any evidence regarding their non-involvement with above lapses in export as admitted by Shri Sanjay Agarwal and corroborated by Shri Bhagat Ram Sharma in their statements and alleged in the aforesaid SCN.
4. The details are mismatching in terms of OTY, description, value and even date wrt Table A vis-à-vis Table B above. There is no evidence that BRC has realized nor is anything favorable bought on record in this regard by the CB, who was given the opportunity. The CB had the opportunity to ask for cross examination of transporter in this case 'V' Trans', V. Transport' indulged in export of aforesaid consignments to substantiate his claim of genuine export. In the submission dated 26/10/2021 the CB while stating the facts of the case has himself at point 8(vii) stated that Shri Ram Bhagat Sharma, proprietor of M/s NMT has admitted the guilt and started payment of GST so evaded by mis-declaration. Further CB vide submission dated 26.10.2021 at Para 4(A)(iii), has claimed that he came to know during investigation conducted by DGGI about the fraud. Vide the same submission at Para 5, the CB has stated that, Moreover, this is a case of evasion of CGST /SGST under GST Act 2017 by mis-declaration. From this, it is ample clear admission that a fraud has taken place. All the above points discussed circumstantially corroborate the allegation in SCN that the goods were not exported properly to the destination. The provisions for export and claiming GST benefit have breached based on the circumstantial details available, before the Inquiry Officer and subsequently the declaration of GST in shipping bill has been 9 Customs Appeal No.75278 of 2023 breached. This infers that there is violation of Section 50(2) and 50(3) of The Custom Act, 1962. Also, any violation of allied act is duly considered under CBLR 2018. As per regulation 10(d) of CBLR, 2018 a Customs Broker shall advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be. So the claim of CB at submission dated 26.10.2021 at Para 5, it is case of GST violation so this cannot be treated as offence under the Custom Act, 1962 and there is no violation of CBLR, 2018; is not right.
12. We note that the appellant has not been able to furnish adequate evidence to justify his innocence. The Hon'ble Apex Court in the case of Commissioner of Customs v KM Ganatra and Company in Civil Appeal number 2940 of 2008 had held that the Customs Broker is supposed to safeguard the interest of both the importers and the customs. A lot of trust is kept in the CHA both by the import- export community as well as by government agencies. To ensure appropriate discharge of such trust, the relevant regulations are prescribed, which lists out the obligations of the Customs House Agent (now Customs Broker). Any contravention of such obligation, even without intent would be sufficient to invite upon the CHA/CB punishment as listed in the Regulations. We also find that there is nothing in the defence of the appellant to indicate as to how he ensured compliance of the Regulation said to be contravened. Government evidence furnished through Bhutan agencies, as well as failure of any remittance received is good enough for reason to establish delinquency/complacency in the matter, on the part of the Customers Broker. The fact that details of export documents tendered, do not match with the reports received from Bhutan Customs vis-a-vis with the export documents is a clear pointer to the anomalous situation. The Customs Broker has not been able to prove 10 Customs Appeal No.75278 of 2023 his innocence. His culpability is evident. As held by the Delhi High Court in the case of Asthiana Corporation Services v Commissioner of Customs IGI.(2014.(30.) ELT161.) punishment to be meted out should be in proportion to the gravity and nature of infarction by the CB. The licence is the bread and butter of the Broker, it is his livelihood, besides giving employment to a few others. Revocation of a license is a grave punishment as it deprives, the person concerned of his means of a living and therefore, such revocation can only be justified in extremely grave and serious matters. In the circumstances of the present case, we feel that Customs Broker license has now been under revokation for almost 2 years plus and the CHA deprived of business and livelihood.
13. In view of our discussions supra and under the circumstances, we feel it would not be in the fitness of things to continue any further with the revocation of the license. We therefore direct the license of the Customs Broker be revived forthwith. The forfeited amount of security of ₹50,000/- shall be retained by the authorities and the Customers Broker shall have to tender requisite security amount afresh, upon revival of the said licence. We also order that the penalty of ₹50,000/- imposed under Regulation 18 on the appellant be reduced to ₹10,000. Appeal filed by the appellant is thus disposed of.
(Pronounced in the open Court on 06.05.2025) Sd/-
(R. MURALIDHAR) MEMBER (JUDICIAL) Sd/-
(RAJEEV TANDON) MEMBER (TECHNICAL) SB