Custom, Excise & Service Tax Tribunal
Parthiv Vijaykumar Dave vs Ahmedabad on 31 December, 2021
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
REGIONAL BENCH- COURT NO.3
Customs Appeal No.10955 of 2021
(Arising out of OIO-AHM-CUSTM-000-COM-011-21-22 dated 10/11/2021 passed by
Commissioner of CUSTOMS-AHMEDABAD)
PARTHIV VIJAYKUMAR DAVE ........Appellant
04 Hariharanand Society Nr Rajwadu Malav Talav Jivraj Park Road, Ahmedabad
Ahmedabad, Gujarat
VERSUS
C.C.-AHMEDABAD .......Respondent
Custom House, Near All India Radio Navrangpura, Ahmedabad, Gujarat APPEARANCE:
Shri D.K.Trivedi, Advocate for the Appellant Shri Dharmendra Kanjani, Superintendent (AR) for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. RAJU Final Order No. A/ 12640 /2021 DATE OF HEARING: 29.11.2021 DATE OF DECISION: 31.12.2021 RAJU This appeal has been filed by M/S. PARTHIV VIJAYKUMAR DAVE against order of Commissioner revoking his customs broker license under Regulation 17 of the CBLR, 2018 and imposition of penalty of Rs.50,000/- under Regulation 18 of CBLR, 2018.
2.1 The facts of the case are that the appellant is a custom broker and an allegation was made that he violated the Customs Broker Regulations in respect of import of old and used Multi-Function Digital Devices at Pipavav Port. The revenue has alleged that MFDD's are restricted as per DGFT Notification No.35 (RE-2012)/2009-2014 dated 28.02.2013 and requires mandatory authorization from DGFT. DRI had initiated investigations and had alleged that one Shri Pratik Gautambhai Babaria had been importing the said goods in the name of various firms such as (i) M/s. PYPYE Techserv Private Ltd. (ii) M/s. Skylark Office Machines (iii) M/s. Dark Line Copier (iv) M/s. Copy Care Enterprise (v) M/s. Vardhman Overseas and (vi) M/s. Trade World. It was alleged that the appellant had acted as Customs Broker in
2|Page C/10955/2021 respect of import consignments of M/s. Vardhman Overseas and M/s. Trade World.
2.2 Premises of M/s. Trade World were searched on 16.03.2018 by DRI and statement of Shri Pankaj Moreshvar Dhanmeher, Proprietor of M/s. Trade World was recorded on 16.03.2018. Shri Pankaj Moreshvar Dhanmeher stated that he was the proprietor of the said firm only on paper and he did not look after any of its work. He also stated that one Shri Vishal Anant Gamre (Domre) took away some papers related to that firm, signed by Shri Pankaj Moreshvar Dhanmeher in November, 2017 and he got Rs.5000/- cash in return. He further stated that he did not know the address of the Shri Vishal Anant Gamre (Domre) and met him through his friend Shri Bhavesh Tulsidas Tandel.
2.3 The premises of M/s. Vardhman Overseas were also searched by DRI and statement of Shri Sunil Pandhare, proprietor of M/s. Vardhman Overseas was recorded. He also stated that he had given his documents to one Shri Vishal Anant Gamre (Domre) who met him through his friend and got Rs.1,000/- in return. He also was promised that they will help in setting up his business. He also stated that Shri Vishal Anant Gamre had taken signatures of Shri Sushant Sunil Pandhare on 10 blank papers. Shri Sushant Sunil Pandhare had also opened a current account of the firm in UBI in January, 2018, on the insistence of Shri Vishal Anant Gamre (Domre) and also handed over 15 blank cheques with his signatures to Shri Vishal Anant Gamre (Domre).
2.4 On the basis of above evidence, revenue came to the conclusion that M/s. Vardhman Overseas as well as M/s. Trade World were dummy companies and were being used to fraudulently import old used photocopiers/MFDDs.
03. The investigation was extended to the appellant and statement of Shri Jayanti Mohanbhai Waghela an employee was also recorded. Statement of appellant was also recorded on 06.03.2018. On the basis of the above investigation, charges were leveled for violation of Regulation 10(a), 10(d) & 10(n) under Regulation 16, 17 & 18 of CBLR, 2018 was initiated.
3.1 The first charge leveled against the noticee for violation of Regulation 10(a) of CBLR, 2018 which reads as follows:-
"The Customs Broker shall obtain an authorization from each of the companies, firms or individuals by whom he is for the time being employed as a Customs Broker and produce such authorization whenever
3|Page C/10955/2021 required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be ;
It was alleged that the appellant had failed to produce various Authorization letter appointing him as Customs Broker from each import enumerated in the offence notice. It was alleged that the Authorization letter submitted by the Noticee in his defense reply were not dated and did not contain basic details such as Bill of Lading No./Invoice No. etc and some documents were not legible. The impugned order relies on the admission made by the appellant that they were not in direct contact with the importers except one importer and also on the fact that the search by DRI had revealed that two of the importer clients of the noticee were non-existent/fake entities. The impugned order holds that the Authorization produced by the appellant were manufacture evidence. The impugned order also relied on the fact that the Inquiry Officer confirmed the contravention of the said Regulation by the Noticee.
3.2 The second charge made in the notice related to violation of Regulation 19(d) of the CBLR, 2018 which reads as under:-
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;
The charge is based on the allegation that the appellant had not guided the importers to obtain Authorization from DGFT. It was alleged that the goods could not have been imported without authorization from DGFT. It was alleged that the appellant failed to ensure compliance of the mandatory nature of such authorization from DGFT. The defense of the appellant was that they had advised the importers to obtain authorization however, filed the Bills of Entries on fastrack basis. The said Bills of Entries were assessed by the proper officer and issued out of charge. The impugned order holds that the appellant should have ensured the compliance in respect of authorization before filing the Bill of Entry. It was alleged that he failed to bring the matter to the notice to the concerned jurisdictional Deputy Commissioner or Assistant Commissioner of Customs as required by Regulation 10(d) of CBLR, 2018. It was also held on the basis of the statements of Shri Jayanti Mohanbhai Waghela that the appellant had filed Bills of Entries for parts and accessories of Printers/photocopiers and the description and classification declared in the Bill of Entry was incorrect. On
4|Page C/10955/2021 the above grounds, the charges for violation of Regulation 10(d) of CBLR, 2018 was upheld.
3.3 The third charge made in the notice related to violation of Regulation 19(n) of the CBLR, 2018 which reads as under:-
The Customs Broker shall verify correctness of Importer Exporter Code (IEC) number, Goods and Service Tax Identification Number (GSTIN), identify of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, date or information;
It was alleged that the appellant had not verified the GSTIN and IEC Number. The appellant contended that he had verified IEC Number provided by the importer in the EDI System and confirmed that they were operational in nature, live and not black listed or suspended. He had also contended that the importers were regular importers of various goods. As regards verification of GSTIN, the appellant claimed that the same were furnished together with KYC and therefore, it is not proper to call for the data again. It was also asserted that no physical verification of declared address was required as part of responsibility of the Customs Broker. The impugned order asserts that during the search operation by DRI on the premises of M/s. Trade World and M/s. Vardhman Overseas, it was found that the said firms were dummy firms being used for import of old and used Photocopiers/MFDDs. The impugned order holds that the KYC Documents were not obtained directly from the imports but through another person. On the basis of above assertion, it was held that the appellant had assisted dummy/fake importers in importing restricted items. It was also pointed out that in a different case against the appellant in Chennai Commissionerate also the appellant had failed to obtain the KYC Documents from the importers. In the said case, it was pointed out that the penalty of Rs.2 Lacs was imposed on the appellant for violation of Regulation 10(n) of CBLR, 2018 against the said order confirmed the charges, appeal has been filed on various grounds.
04. We have considered rival submissions. The first ground raised in defense by appellant relates to failure to follow principles of natural justice. It was argued that relied upon documents in regard to alleged violation committed at Jamnagar Customs were not provided to the appellant. The AR for revenue has argued that there were any two documents relied in the proceedings. It is seen that the appellant had vide letter dated 22.06.2018, 05.07.2018, 11.01.2019, 27.01.2021 had asked for relied upon documents.
5|Page C/10955/2021 In letter dated 22.06.2018, the following relied upon documents were asked for
(i) Statement of Shri Jayantilal Mohanbhai Waghala G card holder at Pipavav as referred in para 2.3 recorded by the officer of DRI.
(ii) Statement of Shri Sagar Bhudeliya H Card Holder at Pipavav referred in para 2.4 recorded by DRI.
(iii) Statement of Shri Parthiv Vijaykumar Dave F Card holder recorded by DRI.
(iv) Copy of Panchnama dated 16.03.2018 drawn by DRI at the premises of Trade World referred at Para 2.6
(v) Copy of Panchnama dated 16.03.2018 drawn by DRI at the premises of M/s. Vardhman Overseas.
(vi) Offence Note received from Jamnagar Customs.
(vii) Offence Note received from Chennai Customs.
It is seen that these documents which form the basis of the entire proceedings have not been supplied to the appellant consequently, vitiated the entire proceedings on the ground of failure to follow principles of natural justice.
4.1 It was pointed out that cross examination of witness has not been provided. The appellant had sought cross examination of witnesses as can be seen from Para 10.1 of Inquiry Report but the same was not allowed.
4.2 It was argued that the principles of natural justice has been violated in so far as the relied upon documents have not been given to the appellant moreover, despite repeated request of cross examination of witness, the same was not allowed. It was further argued that the Show Cause Notice issued by DRI is without authority in view of the decision of Hon'ble Apex Court in the case of M/s. CANON INDIA.-2021 (376) ELT 3 (S.C.). It was also argued that charges based on the offence note from Chennai Customs are misplaced as the said matter is sub-judice and is pending before the Tribunal at Chennai.
4.3 Another ground raised by the appellant is failure of revenue to observe the time limit prescribed under Regulation 17 of the CBLR, 2018. The appellant has particularly relied on the alleged violation of Regulation 17(1), 17(5) & 17(7) of CBLR, 2018. It is seen that there are decisions of Tribunal as well as High Courts which hold opposite view. There are decisions of Tribunal as well as High Courts which say that the time limit prescribed
6|Page C/10955/2021 under Regulation 17 are mandatory in nature whereas, there are also decisions which hold that the time limit prescribed under Regulation 17 are directory in nature. There is no decision of Hon'ble High Court of Gujarat on this subject. In view of that since we are deciding the issue on the first principle of failure of revenue to follow the principle of natural justice, we are not going into the issue of time limit prescribed under Regulation 17 of CBLR, 2018.
4.4. In view of the facts, as the relied upon documents were not given to the appellant and also the cross examination of witnesses was denied we hold that the impugned order has been passed violating principles of natural justice.
05. Thus, the impugned order is set aside and the matter is remanded to the adjudicating authority for afresh adjudication after providing all relied upon documents as well as cross examination of witness that adjudicating authority wishes to rely upon. The appeal is allowed by way of remand.
(Pronounced in the open court on 31.12.2021) (RAMESH NAIR) MEMBER (JUDICIAL) (RAJU) MEMBER (TECHNICAL) Mehul