Custom, Excise & Service Tax Tribunal
International Cargo Services vs Ahmedabad on 11 April, 2022
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
REGIONAL BENCH- COURT NO.3
Customs Appeal No.10910 of 2021
(Arising out of OIO-AHM-CUSTM-000-COM-008-21-22 dated 12/10/2021 passed by
Commissioner of CUSTOMS-AHMEDABAD)
INTERNATIONAL CARGO SERVICES ........Appellant
403 404 405 Himadri-Ii Old High Court Lane
Ahmedabad, Gujarat
VERSUS
C.C.-AHMEDABAD .......Respondent
Custom House, Near All India Radio Navrangpura, Ahmedabad, Gujarat APPEARANCE:
Shri Uday Madhukar Joshi, Advocate for the Appellant ShriPrakash Kumar Singh, Superintendent (AR) for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. RAJU Final Order No. A/ 10328 /2022 DATE OF HEARING: 07.03.2022 DATE OF DECISION: 11.04.2022 RAMESH NAIR M/s International Cargo Services (the Appellant) has filed this appeal for setting aside the Order-In-Original No. AHM-CUSTM-000-COM-008-21-22 dated 12.10.2021, by which the Customs Broker Licence of the Appellant has been revoked. The order also imposed penalty of Rs. 30,000/-.
1.1 Brief facts of the case are that for the import of Cargo of Silver Bars imported by M/s State Trading Corporation, the appellant was appointed as Customs Broker. On arrival of cargo arrived at ICD, Khodiyar, shortage of quantity was noticed, accordingly a show cause notice dated 11.12.2020 issued to the Appellant under the Provision of Customs Brokers Licensing Regulations, 2018. Subsequently, on inquiry in the matter by Investigating officer, the show cause notice was adjudicated vide Orde-In-Original dated 12.10.2021 by the adjudicating authority. Being aggrieved by the order, the appellant is before us in appeal.
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02. Shri Shri Uday Madhukar Joshi, learned Advocate appearing on behalf of appellant submits that Appellant has not violated any provisions of Customs Broker Licensing Regulation, 2018. The Shortage in the cargo of silver bars has occurred before arriving the container to the ICD, Khodiyar. He referred to the police report against the theft of the silver bars and also the report of the CONCOR who is custodian of the goods. He submits that this proceeding clearly shows that the theft of silver bars had taken place before arriving the container to the ICD, Khodiyar, therefore, the appellant cannot be made responsible for any wrong deed happened behind their back.
2.1 He also submits that the role of the Customs Broker starts only after arrival of the cargo, Appellant had filed advance Bill of Entry No. 968652 on 17.01.2019 for warehousing being a Customs Broker of State Trading Corporation correctly as per the documents such as Invoice, IGM, etc.. The Cargo had arrived at Nhava Sheva Port and subsequently proceeded to ICD, Khodiyar. With regard to this consignment of import the Appellant was Customs Broker whereas, CONCOR was a transporter/custodian and regional container lines was the declarant shipping line. As per the investigation of the police department and CONCOR the theft has taken place before arriving the consignment at ICD, Khodiyar.
2.2 As regard the contention of the adjudicating authority regarding prior intimation to Customs Department regarding arrival of the High Value Cargo, he submits that there were no instructions/circular/notification/ regulation issued by the competent authority of Customs Department. As regard the obligation/no-obligation on applicant's part regarding intimation of arrival of high value cargo, the appellant submission was not properly considered by the adjudicating authority.
2.3 He further submits that Notification No. 61/95-Cus (NT) dated 28.09.1995 goods imported (conditions of transshipment) Regulations, 1998 which was subsequently amended vide Notification No. 31/98-Cus (NT) dated 02.06.1998 vide which goods imported (conditions of transshipment) First amendment, regulations, 1998 were issued. This apart, Circular No. 46/2005 -CUS dated 24.11.2005 was issued by the Central Government. The said circular was regarding automation of movement of containerized cargo from gateway ports to interland ports-SMTP. A conjoint reading of
3|Page C/10910/2021 provisions of notifications as well as the said circular clarified that specific responsibilities were cast upon declarant i.e Shipping Line & Transporter in this case CONCOR.
2.4 He also argued that apart from strong prima facie case on merit in favour of the Appellant, the proceeding of revocation is not sustainable on the ground of time bar also. The show cause notice which was issued under Regulation 17(1) of the Regulations was dated 11.12.2020. Regulation 17(5) of the regulation specifically provides for preparation of reports by an inquiry officer after recording his findings and submission thereof within a period of 90 Days till the date of issuance of aforesaid show cause notice. Accordingly, considering the said provision, alongwith the issue of show cause notice the report ought to have been submitted on 11.03.2021. However the inquiry report itself is dated 27.03.2021 whereby, the same was time barred in terms of the aforesaid provisions.
2.5 Further, the impugned order having not been passed by the adjudicating authority within the time limit prescribed under the aforesaid regulation which are mandatory in nature, the entire proceedings are time barred. He placed reliance on the following Judgments:-
Impexnet Logistics Vs. Commissioner of Custom (General) - 2016(338) ELT 347 (Del.) Overseas Cargo Services Vs. Commissioner of Custom (General) - 2016(340)ELT 119(Del.) SK Acharya CHA Vs. Commissioner of Customs (Airport &Admn.), Kolkata- 2018 (363) ELT 504 (Tri. -Kol.) Sabin Logistics Pvt. Ltd. Vs. Commissioner of Customs, Chennai -VIII- 2019(367) ELT 200 (Mad.) 2.6 He further submits that the Adjudicating authority has not appreciated that the present matter did not relate to mis-declaration of goods, undervaluation of goods, misclassification of goods, evasion of duty, violation of any exim policy conditions or Customs Act , and not even suppression of any fact. In the present matter importer had paid duty even on goods short found too. In absence of any such allegation, in various cases this tribunal consistently held that revocation/ cancellation of license being an ultimate penalties resulting into not only closure of business of CHA but
4|Page C/10910/2021 also unemployment of employee and workers of CHA, such action could be taken only when the CHA/ Customs Broker was guilty of serious irregularities or mala fide and dishonest conduct. In this support he placed reliance on the following judgments: -
Maruti Transports 2004 (177) ELT 1051
R.S. Travels - 2007(217) ELT 384
Air Travel Enterprises India Ltd. - 2009 (239) ELT 275
Sai Shipping Service - 2009(239) ELT 104
Commissioner Vs. Morliks Shipping & Trading Pvt. Ltd. -
2008(227)ELT 577
Prime Forwarders - 2008 (222) ELT 137
Instruments & Controls Ltd. - 2008 (227) ELT 139
He also submitted detail written submission in this matter with supporting records/ documents
03. Shri Prakash Kumar Singh, Learned Superintendent (AR) appearing on behalf of revenue reiterates the finding of the impugned order.
04. We have carefully considered the submissions made by both the sides and perused the records. The issues involved in the present case are (1) Advance intimation to CONCOR (2) High value cargo not shifted to the designated warehouse immediately on arrival (3) Seal verification (4) Limitation.
4.1 The charges framed against appellant in Order-In-Original of Commissioner are related to violation of Regulation 10 (d) and (m) of the CBLR, 2018 which read as under:-
(d)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;
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(m)A Customs Broker shall discharge his duties as a Customs Broker with utmost speed and efficiency and without any delay;
The charge is that appellant had not informed CONCOR in advance about arrival of valuable cargo in terms of circulars issued by CONCOR and the high value goods arrived at ICD, Khodiyar on 02.02.2019 and lay at the place of unloading till 04.02.2019, even though the appellant was well aware of the fact that such high value cargo should have been shifted to the designated warehouse immediately on arrival.
4.2 The first ground raised in defence by the Ld. Advocate Shri Uday M. Joshi for appellant in the instant case is that shipping line had informed CONCOR about description of goods as silver bars and complied customs notification, circular and circular issued by CONCOR. Further they submitted that CONCOR both as "transporter" as well as "custodian" was well aware from the gateway port i.e Nhava Sheva itself that they were carrying silver bars "high value cargo" in container no. CAIU 6840387 as transhipment of container from gateway port to ICD, Khodiyar was done by CONCOR and CONCOR in this case acted as custodian at ICD, Khodiyar. It was sole responsibility of CONCOR as transporter and custodian to comply with the provisions of Customs Notifications and Circular issued in that behalf. Appellant submitted that CONCOR circular did not mandate each addressee to inform CONCOR separately. Further appellant submitted that during transshipment of container from gateway port to ICD, Khodiyar and subsequent placement of container at demarcated place appellant had no role to play, they were not authorized to do so by customs authority. Further appellant submitted that they had no access of container at the time of arrival. Appellant also submitted that they were appointed by Customs authority under CBLR and Section 146 of C.A 1962, accordingly obligations and duties were cast on appellant by Customs authorities. In the present case Customs authorities had not issued any instructions / circular / notification or regulation regarding advance intimation of arrival of high value cargo to the custodian which appellant as a Customs broker had not complied with. In addition appellant submitted that CONCOR is not regulating authority for Customs Broker but it is Govt. company register under companies act. In that context appellant relied upon the Customs Notifications and Circular issued for "Goods Imported(Condition of Transhipment) Regulations, 1995", as well as documentary evidence submitted in paper book volume 1 along with appeal memo and depositions
6|Page C/10910/2021 of Mr. RajibBhowal, Chief Manager, CONCOR, ICD-Khodiyar recorded by inquiry officer of customs during cross examination, offence report of Deputy Commissioner of Customs, ICD, Khodiyar and inquiry report of inquiry officer.
4.3 Reliance was also placed on provisions of Regulation 2 (b & c) and Regulation 3 (a & b) of Customs Notification No. 61/95-Cus (N.T) dated. 28.09.1995 "Goods Imported (Condition of Transhipment) Regulations, 1995" submitted at page no. 239 of paper book volume 1, which read as under:
2. Definitions. - In these regulations, unless the context otherwise requires, -
(a) "Custodian" means a person approved by the Commissioner of Customs for the purposes of section 45 of the Customs Act, 1962 (52 of 1962);
(b) "declarant" means -
(i) the person incharge of the conveyance in which the goods are imported, or his agent, or
(ii) the person authorised to tranship the goods by the exporter of the goods or by an agent acting on behalf of such exporter;
(c) "transporter" means the Railways, the owner of the vessel, the owner of the aircraft or, as the case may be, the owner of the motor vehicle, in which the goods imported are transported for the purposes of transhipment.
3. Conditions governing transhipment. - Transhipment shall be allowed under these regulations on the conditions that -
(a) the declarant makes an application to the proper officer of customs seeking permission for transhipment of the goods imported;
(b) the goods imported are mentioned in the import manifest as for transhipment to any major port, to any other customs port or customs airport;
Notification 31/98-Cus (N.T) dated. 02.06.1998 "Goods Imported (Condition of Transhipment), (First Amendment) Regulations, 1998" and para 4 & 5 of Customs Circular No. 46/2005 dated. 24.11.2005 "Automation of movement of containerize cargo from Gateway Ports to hinterland ports - SMTP - Regarding" submitted at page no. 240 & 241 of paper book volume 1, which read as under:
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4. The transhipment permit information will be sent to the carrier, the transporter undertaking the transhipment, custodian of the gateway port, and the ICES system at the destination ICD. Transhipment permit can also be printed by the carrier in his office or in the custom
5. The transhipment permit transmitted to the recipient port/ ICD/ CFS will automatically be converted into an IGM and the Shipping Lines will not be required to file any fresh IGM in respect of such containers.
we find that there are specific responsibilities were cast on "declarant that is Shipping Line", "Transporter and Custodian"i.e"CONCOR" in this case and procedure to be followed by declarant, transporter and custodian is clearly laid down by CBIC for transhipment of goods / container from Gateway Ports to hinterland ports (ICD).
4.4 Considered the provisions of aforesaid Customs Notifications and Circular, as well as documentary evidence available on record which are reproduced below:- (i) Both Gate & Local Import General Manifest (IGM)having no. 2215622 dated. 25.01.2019 & 3085705 dated 27.01.2019 filed by Shipping Line.
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(ii) Transshipment Permit No. 1732320 dated. 27.01.2019.
(iii) CONCOR's forwarding note dated. 28.01.2019 submitted at page no. 245 & 246 of paper book volume 1.
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(iv) CONCOR's Rail Summary dated. 31.01.2019 for train no. BRTX22731 from Nhava Sheva to Vadodara submitted at page no. 247 of paper book volume 1.
12 | P a g e C/10910/2021 4.5 We find that these documentary evidence abundantly establishes the fact that while handing over the container to transporter that is CONCOR in this case at port of import Nhava Sheva, for further transhipment to ICD, Khodiyar shipping line had clearly mentioned description of goods as silver bars on the face of all such documents i.e Both Gate & Local Import General Manifest (IGM), Transhipment Permit and CONCOR's forwarding note and provided proper information to CONCOR about description of goods as Silver Bars in container no. CAIU 6840387 and subsequently CONCOR had prepared their own rail summary dated. 31.01.2019 for train no. BRTX22731 from Nhava Sheva to Vadodara which also clearly indicate description of goods as Silver Bars.
4.6 In addition we have carefully gone through (i) Deposition of Mr. Rajib Bhowal, Chief Manager, CONCOR, ICD-Khodiyar recorded by inquiry officer of customs during cross examination. (ii) CONCOR's circulars (iii) Offence report of Deputy Commissioner of Customs, ICD, Khodiyar. (iv) Inquiry report of inquiry officer.
4.7 We find that during the course of cross-examination of Shri Rajib Bhowal, Chief Manager, CONCOR, ICD, Khodiyar, before inquiry officer on 22.02.2021, he had deposed as follows:
"Q7. Who did the transhipment of Container CAIU6840387 from Gateway port Nhava Sheva to ICD-Khodiyar?
Ans.7: The shipping line gives the booking and the gateway port in this case it was JNPT, the booking is done on behalf of the shipping in account of AC Customs, and consigned to concerned shipping line account of DC Customs, and the transshipment from gateway port to ICD Khodiyar is being done by CONCOR."
"Q9. Please read Regulation 3 (b) of Notification No. 61/95-Cus (N.T) dated. 28.09.1995 and Regulation 2 (c) of Notification No. 31/98-Cus (N.T) dated. 02.06.1998. As per these regulations are the goods imported required to be mentioned in transhipment documents like IGM, Rail Summery etc.? Ans. The SMTP (Sub-Manifest Transhipment) is being filed by the Shipping line with Customs and this SMTP details are shared by the shipping line through a forwarding note to CONCOR while the shipping line gives booking to CONCOR..."
"Q10. In this documents handed over to you just now, both gate and local IGM for the container in issue, wherein imported goods have been mentioned as Silver Bars in the description column do you agree to this?
13 | P a g e C/10910/2021 Ans. I can very well see from the documents given to me just now that the table showing B/L status column no. 3 the goods description column, it is showing 21 wooden pallets as written STC. 657 pieces silver bars net weight 20243.8580 kgs reference invoice no. 190107000043."
"Q11. In those documents handed over to you just now, there is forwarding note of CONCOR dated. 28.01.2019 it is categorically mentioned on page 2, as Silver Bars with other details against container no. CAIU 6840387. Do you agree? Ans. "...... Yes, as per the list, the fifth container marked CAIU6840387 is showing cargo as Silver Bars... ".
"Q13. Would I be correct in saying that while preparing forwarding note dated. 28.01.2019 CONCOR was well aware that container no. CAIU6840387 was carrying silver bars? Ans. The system works like this, that the shipping line books the container electronically through our portal and when the physical train departs with the containers, a train summary is generated which carries the description of the cargo....."
"Q14. Who prepared the rail summary regarding transhipment of container from Nhava Sheva to Vadodara, for train no. BRTX 22731 dated. 31.01.2019 and Vadodara to ICD, Khodiyar by train no. BKHTX22136 dated. 02.02.2019?
Ans. JN port and ICD Vadodara both works round the clock so CONCOR people posted in rail operation department are responsible for the preparation of rail summery....."
4.8 Further, we find that in chain of event narrated by Deputy Commissioner of Customs, ICD, Khodiyar in his offence report dated. 23.10.2020 and inquiry officer in his inquiry report it has been stated that:-
"31.01.2019 - container no. CAIU 6840387 was booked by CONCOR on train no. BRTX 22731 on 31.01.2019 from JNPT to Vadodara with cargo description mentioned in the manifest as "Silver Bars".........
4.9 Therefore, from the conjoint reading of our above findings it has provided sufficient evidence that shipping line whom the CONCOR circular was marked through their association ASAA had informed CONCOR in terms of the provisions as prescribed under Customs notification and circular as well as in compliance of CONCOR's circular that container no. CAIU 6840387 was carrying Silver Bars and therefore CONCOR both as "transporter" as well as "custodian" was well aware from Nhava Sheva itself that in container no. CAIU 6840387 they were carrying Silver Bars.
14 | P a g e C/10910/2021 4.10 However, we also observe that, in terms of provisions laid down in foregoing Customs notifications and circular, filing of Transhipment Permit, filing of both Gate & Local IGM and Forwarding Note for handing over container to CONCOR for transhipment to ICD, Khodiyar was responsibility of Shipping Line. Thereafter, booking of container from Nhava Sheva for Transhipment to ICD, Khodiyar and for that preparation of Rail Summary till arrival of the container at ICD, Khodiyar was responsibility of CONCOR as transporter.It was not appellant's responsibility and appellant as a Customs Broker had no role to play in terms of Customs Act and CBLR 2018 and he was not authorized to do so by Customs authorities. We also observed that CONCOR circulars did not mandate each addressee to inform CONCOR separately.
4.11 Customs brokers, under Regulation 10 (a) of the CBLR 2018 are under obligation to obtain an authorization from an importer and act accordingly. In the present case, such authorization was issued by importer M/s. State Trading Corporation of India Ltd, vide authorization letter dated. 17.01.2019 wherein it was categorically stated that "the appointment of CHA under this authority was specific and limited to process its documents as provided by it for customs clearance with customs authority as licensed customs house agent only". The appointment of the appellant was nothing beyond that and further we find that the appellant was not authorized by importer / shipping line / carrier/ notified party to give any advance intimation to customs department or to CONCOR i.e. custodian.
4.12 Further, from the record of documents we find that appellant had an agreement with Brinks India P. Ltd (forwarder) notified party in this case and according to clause V (a) of the said agreement appellant had informed Brinks about CONCOR circular vide their email dated. 31.07.2013. Further we find after having gone through the Brinks letters addressed to CONCOR that subsequent to intimation given by the appellant, Brinks used to inform CONCOR directly about movement of high value cargo and it was not appellant's responsibility.
4.13 Further, we find that, appellant is Customs Broker and appointed under the provisions of the CBLR 2018 and Section 146 of Customs Act, 1962 and therefore they are under obligation to comply duties cast on them under the said regulation by Customs authority. In the present case there were no such instructions / circulars / notifications issued by the Customs Department to Customs Brokers with regard to advance intimation of arrival 15 | P a g e C/10910/2021 of high value cargo to the custodian, which the appellant as a customs broker have not complied with. We also find that CONCOR is company registered under company's act and not a regulating authority for Customs Broker.
4.14 It appears that while deciding the matter Commissioner of Customs has not taken into consideration aforesaid provisions under Customs notification and circulars for transhipment of goods/container wherein specific responsibilities were cast on Shipping Line as declarant and CONCOR both as transporter and custodian and accordingly documentary evidence available on record as well as statement of CONCOR's Chief Manager at ICD, Khodiyar. It is also found that Commissioner has not produced any substantial evidence to his findings. In our view considering the provisions of Customs notification and circulars and the documentary evidence on record, CONCOR as a transporter as well as custodian were well aware that they were carrying Silver Bars in container no. CAIU 6840387, therefore in the present case intimation by any party including Customs Broker whom CONCOR circular was addressed have no relevance.
4.15 In view of our above findings appellant being Customs Broker cannot be held responsible in any manner under Regulation 10 (d) of CBLR 2018.
4.16 The second ground raised in defense by the Ld. Advocate Shri Uday M. Joshi for appellant in the instant case are that, CONCOR as transporter of container from gateway port to ICD and as a custodian at ICD, Khodiyar was well aware that they were carrying Silver bars in container no. CAIU 6840387. Appellant further submitted that it was the sole responsibility of CONCOR as custodian at ICD, Khodiyar to check IGM and Transhipment documents before allowing unloading of container from railway rack, and all such documents reflected description of goods as Silver Bars and it was sole responsibility of CONCOR to unload the container from railway rack and after unloading place the container at its designated place according to the nature of cargo immediately on arrival at ICD in terms of Handling of Cargo in Customs Area Regulations, 2009. Appellant submitted that due to gross negligence of CONCOR container remained dormant for two long days from 02.02.2019 to 04.02.2019 at its first location instead of placing it at its demarcated area. Further appellant submitted that at the time of arrival of train and unloading of container from railway rack and also for placement of the said container at demarcated place, appellant had no role to play. It was not authorized to do so by customs authority. Appellant relied upon the 16 | P a g e C/10910/2021 provisions of Customs notification No.26/2009-CUS(N.T.) dated 17.03.2009 and notification No.24/2017-CUS(N.T.) dated 31.03.2017 and evidence namely (i) Deposition of Mr. Rajib Bhowal, Chief Manager, CONCOR, ICD- Khodiyar recorded by inquiry officer during cross examination (ii) statement of Mr. Nithin RajappenMetetil, Deputy Manager, CONCOR, ICD-Khodiyar recorded before Adalaj Police Station on 11.02.2019 during investigation of this pilferage matter of Silver Bars (iii) offence report of Deputy Commissioner of Customs, ICD, Khodiyar, dated 23.10.2020 (iv) CONCOR's Public Tariff for ICD-Khodiyar and CONCOR invoice.
4.17 We find that, apart from the role of "transporter" CONCOR was also acted as a "custodian" at ICD, Khodiyar in this case in terms of the provisions of notification No.26/2009-CUS(N.T.) dated 17.03.2009 and notification No.24/2017-CUS (N.T.) dated 31.03.2017 "Handling of Cargo in Customs Area Regulations, 2009" and Section 45 of Customs Act, 1962 wherein responsibilities were cast on custodian and prescribed procedure to be follow by custodian.
4.18 Regulation 2 (1 - b), 6.1 (d), (h) and 6.2 of Notification No. 26/2009- Cus dated 17.03.2009 submitted at page no. 248 to 252 of paper book volume 1 which read as under:
2. Definitions.-
(1) In these regulations, unless the context otherwise requires, -
(a) "Act" means the Customs Act, 1962 (52 of 1962);
(b) "Customs Cargo Services provider" means any person responsible for receipt, storage, delivery, dispatch or otherwise handling of imported goods and export goods and includes a custodian as referred to in section 45 of the Act and persons as referred to in sub-section (2) of section 141 of the said Act;
6. Responsibilities of Customs Cargo Service provider:
(1) The Customs Cargo Service provider shall -
(a) ....;
(b) ....;
(c) ....;
(d) demarcate separate areas for unloading of imported goods for their storage with respect to the category of importers, nature of goods, 17 | P a g e C/10910/2021 place of destination, mode of transportation or any other criterion as the Commissioner of Customs may specify having regard to the custody and handling of imported goods in a customs area;
(e) ....;
(f) ....;
(g) ....;
(h) not permit any import cargo to enter the customs area or be unloaded therein without the import report or the import manifest having been filed with the Deputy Commissioner or Assistant Commissioner of Customs;
(2) The Customs Cargo Service provider approved for custody of imported or export goods and for handling of such goods shall not lease, gift, sell or sublet or in any other manner transfer any of the premises in a customs area; or sub contract or outsource functions permitted or required to be carried out by him in terms of these regulations to any other person, without the written permission of the Commissioner of Customs.
and Regulation 2 (aa) of Notification No. 24/2017-Cus (N.T) dated. 31.03.2017 reads as under:-
2. In the Handling of Cargo in Customs Areas Regulations, 2009, in regulation 6, in sub-regulation (1), after clause (a), following clause shall be inserted, namely:-
"(aa) Provide information regarding arrival of the imported goods to the Deputy Commissioner or Assistant Commissioner of Customs immediately on arrival of said goods in the customs area and also information about their departure after the clearance thereof ".
4.19 Considering the aforesaid provisions and the evidence on record namely (i) Deposition of Mr. Rajib Bhowal, Chief Manager, CONCOR, ICD- Khodiyar recorded by inquiry officer during cross examination. (ii) Statement of Mr. Nithin Rajappen Metetil, Deputy Manager, CONCOR, ICD-Khodiyar recorded before Adalaj Police Station on 11.02.2019 during investigation of this pilferage matter of Silver Bars and English translation submitted by appellant on 15.02.2022. (iii) Offence report of Deputy Commissioner of Customs, ICD, Khodiyar, dated 23.10.2020 (iv) CONCOR's Public Tariff for ICD-Khodiyar and CONCOR invoice.
18 | P a g e C/10910/2021 4.20 We find that major role in handling the high valued cargos is of CONCOR as a custodian and as well as transporter of consignment of silver bars.
4.21 We reiterate our findings in forgoing paras that from the documentary evidence i.e (i) Gate and Local IGM (ii) Transhipment Permit (iii) CONCOR's Forwarding Note (iv) CONCOR's own Rail Summary provide sufficient evidence that CONCOR as a "transporter" and as well as a "custodian" was well aware that they were carrying Silver bars in container no. CAIU 6840387 from Nhava Sheva itself.
4.22 Further, we find that during the course of cross-examination of Shri Rajib Bhowal, Chief Manager, CONCOR, ICD, Khodiyar before the inquiry officer on 22.02.2021 he had deposed as follows:
"Q22. What are the responsibilities official of CONCOR who are present at the time of arrival of train into ICD-
Khodiyar and unloading of container in ICD-Khodiyar ? Ans. "The yard operation officer who is present in the yard are responsible for entire yard activity which also include unloading from the trains. The tally of the containers while loading/unloading to/from rail are being done through CONCOR appointed surveyors who were given the task of recoding details and reporting to CONCOR and subsequent updation in system".
"Q.23 By virtue of regulation 6 (1) (h) of Handling of Cargo in Customs Area Regulation, 2009 is a responsibilities not cast on custodian that is a CONCOR to verify IGM before allowing unloading of container from the train.? Ans.23 ...If the customs authorities have any query regarding any container or cargo they intimate us separately and suitable reply is given to them...."
"Q.26 Is it only CONCOR which does unloading of containers from the train, there movement and placing the same within ICD, premises?
Ans. "As per HCCAR regulation 2009, CONCOR has appointed various service providers for operation of the terminal. For handling of containers and cargo, CONCOR had appointed handling contractors for unloading/loading 19 | P a g e C/10910/2021 internal movements of containers in the yard, stuffing/destuffing in warehouses. Placement for examination / destuffing, bonding etc. and other ancillary services"
"Q27. By virtue of provision of section 6(1) (d) of HCCAR regulations 2009, is it the responsibility of custodian to place a container as per the nature of goods in demarcated area?
Ans. "Yes, separate area is already demarcated and accordingly the containers are placed".
"Q.28 Who did the movement of container no. CAIU 6840387 from its first location to demarcated place on 04.02.20219? did CONCOR do it itself or was it done by CONCOR appointed agencies?
Ans. "I have no idea who transported the container but the transportation and handling of container are being done by CONCOR appointed handling contractors".
4.23 Further, we find in statement of Mr. Nithin RajappenMetetil, Deputy Manager, CONCOR, ICD-Khodiyar recorded before Adalaj Police Station on 11.02.2019 during investigation of this pilferage matter of Silver Bars wherein he stated that "........the seal of the said container was checked which task was given to a company called Aquarius Marine which has been contract by CONCOR whose representative Vijay Parmar checked seal and made entry in register and reported to CONCOR in which it was not shown that the container contained high value cargo or what cargo did it contain in view of which we allowed the container to remain at the place where it was.....".
Further, we find that in offence report of Deputy Commissioner of Customs, ICD, Khodiyar, dated 23.10.2020 it has been recorded that, "it can be seen from the train summary from Nhava Sheva to Vadodara that the description of goods for container CAIU 6840387 is clearly written as Silver. The surveyor or CONCOR could have categorize the cargo as High Value".
Further we find in the Public Tariff (Updation With All Trade Notice- 05/December/2018) issued by CONCOR, ICD-Khodiyar, wherein it is categorically mentioned by CONCOR that, 20 | P a g e C/10910/2021 "The Activities will include unloading of Import Container at ICD; stacking it in Import Stack Area; positioning of import container at warehouse or other location in ICD for seal cutting, providing custom examination & giving delivery of cargo directly from container on Importer/CHA arranged vehicle".
4.24 In view of our above findings, it is evident that CONCOR who was sole responsible in terms of Regulation 6 (1) (d) & (h) of Handling of Cargo in Customs Area Regulation, 2009 to verify Transhipment documents i.e IGM, Transhipment Permit as well as their own Rail Summary from Nhava Sheva to Vadodara before allowing unloading of container no. CAIU 6840387 from the train and place the container at demarcated area according to the nature of the goods, whereas in present case CONCOR had left the said container dormant at the first location I/9/34/A from 02.02.2019 to 04.02.2019 knowing the fact that both IGM and Transhipment Permit as well as Rail Summary from Nhava Sheva to Vadodara categorically indicated goods as Silver Bars and therefore container should have been placed by CONCOR as a custodian immediately after its unloading from train to its demarcated place which they did not.
4.25 However, conjoint reading of aforesaid provisions, deposition of Chief Manager, CONCOR and Deputy Manager, CONCOR, ICD-Khodiyar as well as offence report of Deputy Commissioner of Customs and CONCOR's public tariff it is clear without any doubt that it was sole responsibility of CONCOR as a custodian at ICD, Khodiyar to unload the container from train and further placement of that container at demarcated area according to the nature of goods. It was not appellant's responsibility and appellant as a Customs Broker had no role to play in terms of Handling of Cargo in Customs Area Regulations, 2009 and CBLR 2018. Appellant was not authorized to do so by Customs authorities.
4.26 It appears that while deciding the matter Commissioner of Customs has not taken into consideration Handling of Cargo in Customs Area Regulations, 2009wherein specific responsibilities were cast on CONCOR as a custodian as well as documentary evidence available on record. In our view considering the provisions and the documentary evidence on record, negligence of CONCOR as a custodian was attributed to customs broker while adjudicating the matter.
21 | P a g e C/10910/2021 4.27 In view of our above findings appellant being Customs Broker cannot be held responsible in any manner under Regulation 10 (m) of CBLR 2018 with regard to placement of container at its demarcated place in ICD.
4.28 The third charge made against appellant in O.I.O of Commissioner is related to violation of Regulation 10 (e) of the CBLR, 2018 which read as under:-
A Customs Broker shallexercise 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;
The charge is that appellant had not verified seal on container.
4.29 The ground raised in defence by the Ld. Advocate Shri Uday M. Joshi for appellant in the instant case is that according to Public Notice No. 36/2009 and Facility Note No. 02/2012issued by Commissioner of Customs, Ahmedabad there were specific responsibilities for verification of seal number and weight which were cast on custodian and shipping line which they failed to comply. Further appellant submitted that while moving container from its first place at location I/9/34/A to demarcated area CONCOR officials themselves recorded different seal number on container and less weight than it was mentioned in their own rail summery and they concealed such crucial information from not only appellant but from customs authority and importer also. Further Ld. Advocate submitted that appellant's role as a Customs Broker starts only when container placed at its demarcated area and subject to container marked for examination by Customs authority or any specific instruction issued by customs authority.In addition they submitted that their appointment by importer was specific to and limited to process documents with Customs authority. The bill of entry of the subject shipment was cleared by Customs authority under RMS "without assessment and examination", therefore they were not authorized to deal with the cargo unless it was instructed by Customs authority.In this case no such instruction was given by Customs authority to appellant. In addition they relied upon para V-d of their agreement with Brinks India Pvt.
Ltd, door to door services provider (forwarder) in this case as well as Statement of Mr. RajibBhowal, Chief Manager, CONCOR, ICD-Khodiyar recorded by inquiry officer during cross examination, offence report of Deputy Commissioner of Customs, ICD, Khodiyar, dated 23.10.2020, statement of Mr. Vijay Parmar - surveyor appointed by CONCOR, ICD- 22 | P a g e C/10910/2021 Khodiyar recorded by Adalaj Police Station on 11.02.2019, Deposition of Mr. Peter George Parker, from Sea Trade Shipping, Ahmedabad who was agent for Regional Container Lines (RCL Agencies (India) Pvt. Ltd) recorded by inquiry officer during cross examination on 05.03.2021, Investigation Report of Police Inspector, Adalaj Police station dated. 13.07.2019, Investigation Report of Chief Manager, CONCOR, ICD, Khodiyar dated. 01.07.2019 and CONCOR's weighment receipt No.1155 dated 04.02.2019.
4.30 We find that vide Customs Public Notice No. 36/2009 and Trade Facility Note No. 02/2012 specific procedure and related responsibility was cast on customs, custodian and shipping line for verification of seal number and gross weight at the time of arrival of import container at ICD by Commissioner of Customs, Ahmedabad who is the respondent in this case.
4.31 We have carefully gone through the documentary evidence available on record which was relied upon by appellant in its defense and we find that vide para 4.2 of Public Notice No. 36/2009 ,procedure has been prescribed for custodian by Commissioner of Customs, Ahmedabad under which ICD, Khodiyar also falls:-
4.2 The HPCSL shall give, at least 24 hours in advance, an intimation to customs about the expected date and time of the arrival of containers from the gateway port. On arrival of the containers at ICD, Sanand, Ahmedabad the custodian shall give a list of containers in triplicate on daily basis to the Dy. / Asst.
Commissioner , Customs, in charge of ICD, Sanand, Ahmedabad. The Customs and the Custodian HPCSL, at ICD, Sanand, Ahmedabad shall jointly examine the seals on the containers received at the ICD, Sanand, Ahmedabad vis-a-vis the transshipment documents and report whether the seals are found intact. The Customs Officer verifying the seals and other particulars with reference to the copy of transshipment permit received from the gateway ports at ICD Sanand, Ahmedabad shall make suitable endorsements as to the intactness of the seal on the transshipment Permit (TP) copies and all the copies of the list of containers prepared by the HPCSL. Thereafter one copy of the Transshipment Permit (TP) alongwith landing certificate issued by HPCSL and one copy of "Sub- Manifest" will be returned to Dy. / Asst. Commissioner of Customs (Container Unit) Gateway port to enable him to 23 | P a g e C/10910/2021 discharge the liabilities of the Custodian (HPCSL) to handover the container with seals intact at the said ICD.
Thus, by virtue of aforesaid para responsibility has cast on the Customs and Custodian to verify the seal on container as well as to verify transshipment documents and report whether the seals are found intact or not.
4.32 Further, we find that during the course of cross-examination of Shri Rajib Bhowal, Chief Manager, CONCOR, ICD, Khodiyar, before inquiry officer on 22.02.2021 he had deposed:
"Q.20 Can you in brief explain the procedure undertaken by CONCOR at the time of unloading the container from the train at ICD-Khodiyar?
Ans. "...The CONCOR surveyor verifies the details of the containers and record it in a register and after that he arrives at the rail counter punches the data to release the train from the system...."
"Q.22 What are the responsibilities of official of CONCOR who are present at the time of arrival of train into ICD- Khodiyar and unloading of container in ICD-Khodiyar? Ans. "The yard operation officer who is present in the yard are responsible for entire yard activity which also include unloading from the trains. The tally of the containers while loading/unloading to/from rail are being done through CONCOR appointed surveyors who were given the task of recoding details and reporting to CONCOR and subsequent updation in system".
"Q.24 Did the surveyor provide survey report to CONCOR regarding aforesaid container which arrived vide train no. BKHTX22136 at ICD-Khodiyar on 02.02.2019 and mentioned regarding any discrepancy regarding seal no. and weight of aforesaid container?
Ans. "The surveyor did report the container description but recorded the wrong seal no. which had been duly recorded during the investigation process with the Adalaj Police Station and our internal investigation reports".
"Q.25 Did any of the officers of CONCOR verify seal on container no. CAIU 6840387 when the same arrived vide train no. BKHTX22136 at ICD-Khodiyar?
24 | P a g e C/10910/2021 Ans. "CONCOR appointed surveyor who work for CONCOR in preparing and submitting reports. Seals of container no. CAIU 6840387 are not physically verified by CONCOR officials and the job is assigned to the surveyors to report any discrepancy."
We find that in para 4.5.d of offence report of Deputy Commissioner of Customs, ICD, Khodiyar dated 23.10.2019 he also recorded that "The surveyor of M/s. Aquarius Marine Services, the company in contract with CONCOR to carry out all the logistic handling services at ICD Khodiyar. It is also the duty of surveyor to verify the seal on container but the surveyor Mr. Vijay Parmar did not verify the same and he also admitted the same in his statement dated. 15.10.2020".
4.33 Further we find that during the investigation process of Adalaj Police Station Mr. Vijay Parmar, who was the representative of Aquarius Marine Services, surveyor appointed by CONCOR, ICD-Khodiyar in his statement, which was recorded by Adalaj Police Station on 11.02.2019 during investigation he had stated that:-
".......on 02.02.2019 I was present on my duty when in the morning on line no. 1, one train no. TX-22 arrived with 28 wagons, under frame (empty) and 17 loaded wagons totalling to 45 wagons the note regarding which has been made in the register but I did not check the seal no. affixed on the container but on seeing seal no. received in advance in the system, the same was 181967 which was also mentioned in Baroda train summary which had come in the system and I had written the very number. I had not gone to check the same on the container which is my mistake...."
4.34 We find that from inquiry report and offence report of Deputy Commissioner of Customs, ICD, Khodiyar dated 23.10.2019 it was recorded that:-
"before moving container from location I/9/34/A to the notified area placed in ICD, Khodiyar for further clearance process, CONCOR had weighed the container vide weighment receipt No.1155 with the help of vehicle number HR 56B 3366 on 04.02.2019 at 12.13 hours. CONCOR's officials have recorded seal number EAR 38620 in the said weighment slip."
25 | P a g e C/10910/2021 4.35 It appears from the CONCOR's weighment receipt no. 1155 and findings of inquiry report and offence report of Deputy Commissioner of Customs, ICD, Khodiyar reproduced in forgoing para that while moving container from location I/9/34/A to the notified area placed in ICD, CONCOR's officials were well aware about discrepancy in seal number and weight of container was less than it was mentioned in their own rail summery which they did not disclose to customs authority.
4.36 The Police investigation report and CONCOR's report are relevant in this matter which are reproduce below.
26 | P a g e C/10910/2021 4.37 We find from the police investigation report that, when container arrived at ICD at that time not only the weight was less than what was mentioned in the documents but seal number was also different. Further they concluded that theft had not taken place at ICD, Khodiyar which is in the limits of Adalaj Police Station and further CONCOR had also conducted 27 | P a g e C/10910/2021 investigation and reported that the theft had not happened in the ICD, Khodiyar premises.
4.38 We find from the above facts on the record that it was negligence on part of CONCOR and its appointed agency that they did not verify seal on container no. CAIU 6840387 and weight of the container was recorded less than it was mentioned in their own documents when it arrived at ICD, Khodiyar and further while moving the container from its first location they came to know about discrepancy in seal number and weight which they did not inform customs authority nor to the appellant.
4.39 Further, we find that para 2 of Trade Facility Note No. 02/2012-CUS dated 30.11.2012 of Ahmedabad Customs, reads as under:-
Sl. No. Work Profile Compliance Required Remarks
2. Verification of Airlines / Shipping lines or In case of any damage in Goods / Container their agents need to packing of goods / container or on arrival at ICD / ensure proper verification discrepancy of seal number or ACC / CFS by of packing of goods / gross weight; Airlines/Shipping Airlines / Shipping container for any damage, Line will intimate Customs & lines gross weight and also Custodian on Arrival of goods at verify the seal number. ACC/ICD/CFS"
The responsibility for verification of seal number and gross weight was also cast on Shipping Line.
4.40 Further, we find that during the cross examination of Mr. Peter George Parker, from Sea Trade Shipping, Ahmedabad who was agent for Regional Container Lines (RCL Agencies (India) Pvt. Ltd) stated before inquiry officer that "Q.2 on arrival of train at ICD-Khodiyar, is it the responsibility of surveyor appointed by shipping line to physically check and conduct survey of container no., wagon no., seal no. on container belonging to RCL?"
Ans. Yes. 28 | P a g e C/10910/2021
4.41 Further, we find that appellant entered into agreement with M/s. Brinks India Pvt. Ltd those who are the Notified Party to provide door to door services (forwarder). In para V-d of the agreement it is categorically mentioned that:-
"ICS as a CHA and pure agent will perform only documentation part of Customs clearance including examination of goods in presence of Customs authority as per the provisions and procedure defined for CHA and will not take physical delivery or part their off of any shipment from custodian of port of importation. Brink's will take physical delivery of each shipment directly from custodian after final clearance for delivery of goods by Customs Authority and after proper verification at notify place by Custodian at port of import"
4.42 Further, we find that importer has issued authority letter to Appellant wherein appellant's appointment as custom broker by importer was specific and limited to process its documents as provided by it for customs clearance with customs authority as licensed customs house agent only and it is not in dispute that bill of entry in the instant case was cleared under RMS without examination. Therefore after conjoint reading of appellant's agreement with Brinks and importers authorization we find that appellants responsibility as customs broker was ceased once the bill of entry was given out of charge by customs authority and it was Brinks who was supposed to take delivery of goods directly from custodian.
4.43 We find no merit in learned Commissioner's finding that appellant's representative had not verified the seal before it was cut. Since appellant's responsibility as customs broker was ceased once the bill of entry was given out of charge, then presence of his representative at the time of cutting the seal and its verification have no relevance nor his admission that he has not verified seal has any relevance. Merely presence of his representative after completion of his work responsibly cannot hold appellant responsible for such harsh action of revocation of licence. It appears that while deciding the matter Commissioner of Customs has not taken into consideration such crucial facts which were on record and discussed herein before.
4.44 In view of our above findings appellant being Customs Broker cannot be held responsible in any manner under Regulation 10 (e) of CBLR 2018. 29 | P a g e C/10910/2021 4.45 We find that appellant raised the issue that entire proceeding being time barred in terms of provisions of Regulation 17 (5), 17 (6) and 17 (7) of CBLR 2018. In that context they placed reliance on documentary evidence on record, Para 3 (iv), (v) & (vi) of Circular No.157/13/2021-GST dated 20.07.2021 issued by C.B.I.C
(i) Circular No.157/13/2021-GST dated 20.07.2021 issued by CBIC
(ii) Impexnet Logistics v/s. Commissioner of Customs (General) -
2016 (338) ELT 347 (Del.)
(iii) Overseas Cargo Services v/s. Commissioner of Customs (General)
- 2016 (340) ELT 119 (Del.)
(iv) S.K. Acharya CHA v/s. Commissioner of Customs (Airport &Admn.), Kolkata - 2018 (363) ELT 504 (Tribunal-Kol)
(v) Sabin Logistics Pvt. Ltd. v/s. Commissioner of Customs, Chennai-
VIII - 2019 (367) ELT 200 (Mad.) From the detailed submissions made by the appellant on aspect of Time bar, it appears that the appellant has made out a strong prima facie case on limitation too. Since we on the basis of our detailed finding decided the matter on merit and facts of this case, we do not incline to give a final finding on Limitation.
4.46 In our considered view, Revocation of license should be commensurate with the gravity of the offence. Since the revocation of Customs Broker License is an extreme step and a harsh punishment as well as denial of livelihood of not only for Customs Broker but for his employees and their families too those who are dependent on customs broker. Adjudicating authority should take such harsh action only in the rarest of the rare case. It is observed that this case is not of misdeclaration of goods, undervaluation of goods, wrong classification of goods, evasion of duty, violation of Customs Act or appellant no way acted with mala fide intention.
4.47 In fact appellant itself took initiative and informed D.G DRI vide his letter dated. 22.02.2019 with details of matter happened in the said shipment with copy to Customs department and others. This in itself proves the bona fide of the appellant to sincerely investigate the matter by competent authority. In light of these facts, the integrity of appellant cannot be doubted. From the order of the Commissioner we find that the submissions made by the appellant, responsibilities cast on declarant, 30 | P a g e C/10910/2021 transporter and custodian by virtue of various Regulations, circulars, public notices and facilitation note discussed in forgoing paras were not duly considered and the harshest penalty of revocation of license was imposed on appellant. In our considered view such harsh punishment of revocation of license is unwarranted which is bad in eye of the law and cannot sustain.
05. In view of our above discussion and finding, we set aside the impugned order and allow the appeal.
(Pronounced in the open court on 11.04.2021 )
(RAMESH NAIR)
MEMBER (JUDICIAL)
(RAJU)
MEMBER (TECHNICAL)
Mehul