Custom, Excise & Service Tax Tribunal
Chinta Haran Ojha Cha vs New Delhi on 12 March, 2020
Author: Dilip Gupta
Bench: Dilip Gupta
CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH,
COURT NO. I
Customs Appeal No. 52445 of 2018
[Arising out of the Order-in-Original No. 03/2018-19/VS/COMMR. (IMPORT)
dated 28/06/2018, 20/07/2018 and 26/10/2018 passed by The Commissioner
of Customs (Import), Air Cargo Complex (Import), New Delhi.]
Shri Chinta Haran Ojha, CHA Appellant
RZT-76, Old Roshan Pura, Najafgarh,
New Delhi - 110 043.
VERSUS
Principal Commissioner of Customs Respondent
Air Cargo Complex (Import),
New Custom House, Near IGI Airport,
New Delhi - 110 037.
WITH
(i) Customs Appeal No. 52446 of 2018 (Shri Rakesh
Kumar); (ii) Customs Appeal No. 53272 of 2018 (Shri
Rajender Prasad); (iii) Customs Appeal No. 53447 of 2018
(M/s Pax Technologies Pvt. Ltd.); (iv) Customs Appeal No.
53448 of 2018 (Latha Priyadarshini); (v) Customs Appeal
No. 53482 of 2018 (Shri Sushil Kumar Mishra); (vi)
Customs Appeal No. 53491 of 2018 (M/s Rubal Logistics
Pvt. Ltd.); (vii) Customs Appeal No. 53492 of 2018 (Shri
Kamal Nath Roy); (viii) Customs Appeal No. 53493 of 2018
(Shri Hari Kishan); (ix) Customs Appeal No. 53494 of 2018
(Shri Rajiv Kumar Sharma); (x) Customs Appeal No. 53495
of 2018 (Shri Kuldeep Singh); (xi) Customs Appeal No.
53688 of 2018 (M/s Prompt Air & Sea Cargo Pvt. Ltd.);
(xii) Customs Appeal No. 53689 of 2018 (Shri Kamal
Kumar Sukhramani [CB]); (xiii) Customs Appeal No. 54011
of 2018 (Shri Rajinder Madhok); (xiv) Customs Appeal No.
54040 of 2018 (Shri Kishan Singh Dhapa); (xv) Customs
Appeal No. 54041 of 2018 (M/s Exim Cargo Services);
(xvi) Customs Appeal No. 50548 of 2019 (M/s R.U.
Imports Exports P. Ltd.); and (xvii) Customs Appeal No.
50563 of 2019 (Shri Rajesh Maikhuri).
APPEARANCE
S/Shri Vaibhav Singh, Virender Kumar, Jitender Kumar, Ms. Reena
Rawat, Ms. Vibha Narang, Shri Kartik Jindal, Bolloju Venugopal, Ms.
Stuti Karwal and Shri B.L. Garg, Advocates - for the appellants.
2 CUS/52445 of 2018
S/Shri Sunil Kumar and Rakesh Kumar, Authorized Representative
(DRs) - for the Respondent.
CORAM : HON'BLE SHRI JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE SHRI C.L. MAHAR, MEMBER (TECHNICAL)
FINAL ORDER NO. 50571/2020
DATE OF HEARING : 13/09/2019.
DATE OF DECISION : 12/03/2020.
C.L. MAHAR
This batch of 18 appeals preferred by appellants falling
broadly in category of importer, CHA representative, Freight
Forwarder, consultant, and individuals un-authorizedly engaged
in customs clearance work. These appeals have arisen out of a
common order-in-original No. 03/2017-18/V.S./COMMR
(IMPORT) read with Corrigendum dated 20/07/2018 passed the
Commissioner of Customs, ACC (Import), New Custom House,
New Delhi. The status of the Appellants and the corresponding
duty or/and penal liability confirmed against them by the
impugned order has been tabulated hereunder:-
Sr. Appeal No. Appellant Status Duty (Rs.) Penalty (Rs.)
No.
1. C/53447/2018 Pax Technologies Importer 1,85,09,843/- 3,76,49,777/-
Pvt Ltd
2. C/53448/2018 Latha Importer NIL 2,39,00,000/-
Priyadarshini
3. C/52445/2018 Chinta Haran CHA NIL 5,05,000/-
Ojha Representative
4. C/52446/2018 Rakesh Kumar CHA NIL 5,05,000/-
Representative
5. C/53272/2018 Rajender Prasad CHA NIL 6,30,000/-
Representative
6. C/53482/2018 Sushil Kumar Individual NIL 32,00,000/-
Mishra
7. C/53491/2018 Rubal Logistics CHA firm NIL 5,28,000/-
Pvt Ltd
8. C/53492/2018 Kamal Nath Roy CHA NIL 5,28,000/-
Representative
9. C/53493/2018 Hari Kishan CHA NIL 5,28,000/-
Representative
10. C/53494/2018 Rajiv Kumar CHA NIL 5,28,000/-
Sharma Representative
11. C/53495/2018 Kuldeep Singh Freight Forwarder NIL 5,28,000/-
12. C/53688/2018 Prompt Air &Sea CHA firm NIL 28,46,000/-
Cargo Pvt Ltd
3 CUS/52445 of 2018
13. C/53689/2 018 Kamal Kumar CHA NIL 10,46,000/-
Sukhramani Representative
14. C/54011/2018 Shri Rajinder Consultant NIL 7,00000/-
Madhok
15. C/54040/2018 Kishan Singh CHA NIL 6,30,000/-
Dhapa Representative
16. C/54041/2018 Exim Cargo CHA firm NIL 6,30,000/-
Services
17. C/50548/2019 R U Imports CHA firm NIL 5,14,000/-
Exports P Ltd
18. C/50563/2019 Rajesh Maikhuri CHA NIL 5,14,000/-
Representative
2. As all the appeals arose from the same impugned order,
the appeals were heard together with the consent of all the
appellants and are being disposed of by this common order.
3. The brief facts of the matter are that the Appellant-
Importer namely M/s Pax Technologies were engaged in import
of goods namely Point of Sale Devices (POS) and Mobile
Point of Sale Devices (MPOS). Based on an intelligence that
the goods were being imported by suppressing actual value of
goods, the department intercepted the consignments imported
against two Bills of Entry Nos. 3851878 dated 08/01/2016 and
3851698 dated 08/01/2016. On examination, it was found that
the goods were not only undervalued, but were mis-classified and
imported in violation of relevant Foreign Trade Policy (FTP)
provisions too. The scope of investigations was expanded to the
previous consignments cleared by M/s Pax Technologies Pvt. Ltd.
and it was detected by the Department that :
(a) The correct import price of the hardware was not
declared in respect of various import consignments;
(b) The amount paid or payable to the overseas
supplier on account of Licence Fee for use of software
was not included in the assessable value in the Bills
of Entry filed with the Customs resulting in evasion of
Customs Duty;
(c) The point of sale Terminals/ mobile point of sale
Terminals i.e. the hardware imported by Appellant
importer were Bluetooth/wi-fi/GPRS enabled and
hence their import required no objection certificate
from WPC Wing of Department of telecommunication,
ETA Type Approval Certificate and also BIS
4 CUS/52445 of 2018
certification, but no compliance in respect of these
policy provisions were made.
(d) The imported consignments were grossly mis-
declared with regard to description and were also
mis-classified under different Customs Tariff Heading.
The importer - Appellant wrongly described the
„dummy‟ or „parts of debit / credit device‟ with intent
to undervalue the goods and to avoid BIS certification
and ETA from WPC.
4. The Bill of Entry-wise violations i.e. undervaluation, non-
inclusion of transfer/licence fee and non-submission of BIS and
ETA/WPC licence in respect of all the 14 Bill of Entry are
summarized in the table below:
S. B/E No. B/E Name of CHA Violations in terms of non submission of
No. Date BIS certification / ETA Certificate from
WPC / undervaluation / using forged
invoices/mi-classification / mis-
declaration
1 5994463 02.07.14 Chinta Haran Non submission of BIS /
Ojha ETA from WPC
2 5994464 02.07.14 Chinta Haran Non submission of BIS / ETA from WPC
Ojha
3 6221058 24.07.14 Chinta Haran Non submission of BIS / ETA from WPC
Ojha
4 7817932 26.12.14 R U Imports Non submission of BIS / ETA from WPC, mis-
Exports Pvt. Ltd. classification, mis-declaration of goods as
dummy, undervaluation and non-inclusion of
the value of software in the assessable value of
goods.
5 2094937 31.07.15 Exim Cargo Non submission of BIS / ETA from WPC, mis-
Service classification, undervaluation and non-inclusion
of the value of software in the assessable value
of goods.
6 2121203 03.08.15 Exim Cargo Non submission of BIS / ETA from WPC, mis-
Service classification, mis-declaration of goods as
paper roll and Terminal (parts of payment
debit/credit device), forgery of invoice,
undervaluation and non-inclusion of the value
of software in the assessable value of goods.
7 2763917 30.09.15 Exim Cargo Non submission of BIS / ETA from WPC, mis-
Service classification, mis-declaration of goods as
paper roll and barcode reader, forgery of
invoice, undervaluation and non-inclusion of
the value of software in the assessable value of
goods.
8 3141261 03.11.15 Exim Cargo Non submission of BIS / ETA from WPC, mis-
Service classification, mis-declaration of goods as
paper roll and Terminal (parts of payment
debit/credit device), forgery of invoice,
undervaluation and non-inclusion of the value
of software in
the assessable value of goods.
9 3239991 13.11.15 Rubal Logistics Non submission of BIS / ETA from WPC, mis-
Pvt. Ltd. classification, mis-declaration of goods as "D
180 (D 180 pinpad is used to connect with the
laptop to do the transaction - connectivity via
USB port only)" and non-inclusion of the value
of software in the assessable value of goods.
10 3346966 23.11.15 Exim Cargo Non submission of BIS / ETA from WPC, mis-
Service classification, mis-declaration of goods as
paper for printing in payment debit/credit
device and Terminal (parts of payment
debit/credit device), forgery of invoice,
undervaluation and non-inclusion of the value
5 CUS/52445 of 2018
of software in the assessable value of goods.
11 3526607 09.12.15 Prompt Air & Sea Non submission of BIS / ETA from WPC, mis-
Cargo classification, mis-declaration of goods as
paper for printing in payment debit/credit
device and Terminal (parts of payment
debit/credit device), forgery of invoice,
undervaluation and non-inclusion of the value
of software in the assessable value of goods.
12 3650483 19.12.15 Prompt Air & Sea Non submission of BIS / ETA from WPC, mis-
Cargo classification, mis-declaration of goods as
paper for printing in payment debit/credit
device and Terminal (parts of payment
debit/credit device), forgery of invoice,
undervaluation and non-inclusion of the value
of software in the assessable value of goods.
13 3851878 08.01.16 Prompt Air & Sea Non submission of BIS / ETA from WPC, mis-
Cargo classification, mis-declaration of goods as D-
180 Terminal (parts of payment debit/credit
device), undervaluation and non-inclusion of
the value of software in the assessable value of
goods.
14 3851698 08.01.16 Prompt Air & Sea Non submission of BIS / ETA from WPC, mis-
Cargo classification, mis-declaration of goods as D-
180 Terminal (parts of payment debit/credit
device), undervaluation and non-inclusion of
the value of software in the assessable value of
goods.
5. The investigation has brought forth a fact that though the
goods were supplied by a supplier namely M/s Pax Technology
Ltd., Hong Kong but to circumvent the registration of import in
Special Valuation Branch (SVB) and examination by SVB branch
of whether the buyer and supplier were „related‟, and if so,
whether the relationship influenced the transaction value, the
appellant - importer mis-declared the facts. It has also been
indicated that Ms Latha Priyadarshini, Director of the Importer-
Appellant firm actively connived with Shri Kuldeep Singh, Director
of the Freight Forwarder firm M/s VSG Shipping and Logistics Pvt.
Ltd., Shri Rajinder Madhok, Consultant and CHA M/s Rubal
Logistics Pvt. Ltd. in resorting to mis-declaration of value and
description as well as other facts of the imports.
6. The Department has alleged that importer appellant
indulged in duty evasion by fraud and forgery. Syndicate of
S/Shri Randhir Singh, Sanjay Kataria, Sushil Kumar Mishra and
Rajendar alias Raju has un-authorizedly handled import
documents and in the process has indulged in using/preparing
forged/fake documents based on which goods were cleared
without payment of appropriate duty.
6 CUS/52445 of 2018
7. The authorized CHAs (firms and their representatives)
failed to verify the genuineness of the importer, correctness of
the documents on the basis of which clearances were sought and
also to guide the importer about the statutory requirements
especially certification from BIS and WPC (in this case). In order
to get more business of clearance of import consignments they
undermined the provisions of law. Some of the CHAs and their
representatives deposited assessed customs duty from their own
account and charged the same amount or more from the
importer. In some of the cases it has been found by the
Department that the CHAs were aware that the fake/forged
documents were submitted for clearance of import consignment
and thus as per department they became party to the violation of
customs procedures as well as duty evasion.
8. After detailed investigation, the Department issued a show
cause notice dated 12 July 2016 to all the appellants which got
adjudicated by impugned order-in-original No. 3/2017-
18/V.S./COMMR./IMPORT dated 28 June 2018 which was
subsequently modified by issuing a corrigendum dated 20 July,
2018. The summary of confirmation of the duty and imposition of
penalty under various sections which has already been
summarized in the preceding para of this order.
9. The arguments submitted by various Advocates appearing
on behalf of the appellants are summarized here below :-
(A) Appellant- Importer, namely M/s Pax
Technologies Pvt. Ltd.
(i) Mis-declaration of description of goods:
That mis-declaration of description of goods
could not be attributed to them as they
provided all the documents as received from
the oversea supplier to the syndicate
comprising Shri Sanjay Kataria and associates;
that the manipulations in the import documents
and Bill of Entry were handiwork of the
7 CUS/52445 of 2018
syndicate; that they were not party to the mis-
declaration which was perpetrated by Sanjay
Kataria, Sushil Kumar Mishra and Rajendar
alias Raju, and in fact they became victim of
nefarious designs of the aforesaid persons. It
has further been added that had they been a
party to the mis-declaration they would not
have filed criminal complaints against Sanjay
Kataria and others in police station.
(ii) Undervaluation of goods: That they were not
a „Related Party‟ to the supplier M/s Pax
Technologies Ltd. Hongkong but dealt with the
supplier on Principal to Principal basis in as
much as they did not ever considered
themselves as „Related Parties‟ and hence SVB
registration and provisional assessment was
not required in their case; that in the Master
Distributor Agreement with the Supplier it is
nowhere prescribed that purchase of software
was a condition of sale of the hardware; that
goods covered by initial three consignments
only were in operating condition loaded with
software and hence the per piece value was
declared @ USD 60 and duty was discharged
accordingly; that goods covered by subsequent
consignments were not loaded with software;
that clients were supposed to download the
software depending on the operative window
they were using for their computers; that
except first three consignment, goods imported
were hardware only and the value after volume
discount was declared as transaction value in
the invoice for duty payment; that Sanjay
Kataria and his associates mis-declared the
transaction value lesser than the invoice value
without any knowledge or approval of the
Appellants; and finally that they remitted the
price at the values indicated in the respective
invoices issued by overseas supplier and paid
duty to Sanjay Kataria and associates
calculated at the actual invoice value .
(iii) Mis-classification of goods: That though the
classification entered in the Bills of Entry by the
respective CHAs was also not applicable to the
goods, the Learned Commissioner also erred in
confirming classification of subject goods under
CTH 8471 holding the devices are Automatic
8 CUS/52445 of 2018
Data Processing Machines and that
classification adopted by the Learned
Commissioner was not in conformity with the
classification adopted by other customs
formations in respect of identical goods; and
finally that the impugned goods are classifiable
under CTI 84705010 as cash register for which
they relied upon the catalogue of D180 MPOS
which was submitted during hearing.
(iv) Confiscation and Penalty: That the
impugned goods do not require ETA and WPC
Certificates for clearance and hence
interpretation adopted by the Learned
Commissioner for holding that the goods in
absence of production of aforesaid certificates
were liable to confiscation under Section 111(d)
is misconceived; that the finding of the Learned
Commissioner is also contrary to uniform
practice prevalent at all custom houses of
clearance of identical goods without insisting
upon BIS, ETA or WPC; that finding of the
Learned Commissioner that the goods are
liable for confiscation under Section 111(m) for
non-submission of SVB orders is incorrect in so
far as though supplier and Appellants have
identical names, they cannot be construed as
related party in terms of provisions of Rule 2
(2) of Customs Valuation Rules (CVR) 2007;
that the goods cannot be held liable for
confiscation under Section 111(m) of the
Customs Act for mis-declaration in the Bills of
entry as the description of the goods in Bills of
entry was wrongly depicted by the CHAs
without their knowledge. Thus, they are not
liable for penalty under Section 114A and
114AA as the fraud was perpetrated not by
them but by other persons/noticees; that in
absence of collusion, willful mis-statement or
suppression of facts on their behalf, imposition
of penalty under Section 114A was contrary to
the language of the provision; that in the facts
and circumstances of the instant case
imposition of penalty was contrary to settled
law that penalty being quasi-criminal is
attracted only in cases of contumacious conduct
or willful infringement of the statutory
provisions which are conspicuously absent on
their part; that they rely on the judgment in
cases of Hindustan Steel [ 1978 (2) E.L.T. (J
159) (S.C.)] , Prashray Overseas [ 2009 (237)
E.L.T. 720 (Tri. Chennai)], Suryakiran
International [2010 (259) E.L.T. 745 (Tri.
9 CUS/52445 of 2018
B‟lore)] and Vaz Forwarding [2011 (266) E.L.T.
39 (Guj.)]; and finally that the penalty imposed
was highly excessive and does not
commensurate with the gravity of offence, if
any.
(B) Appellant- CHA against imposition of penalty:
That the impugned goods having been assessed by the
proper officer under Section 17 after rejecting self-
assessment and therefore same cannot be
adjudicated/assessed again without filing appeal; that
there is no evidence on record to establish that the
Appellants had prior knowledge that the impugned
goods were mis-declared/undervalued; that the true
declaration with regard to description and value of the
imported goods has to be given by the importer and not
by the CHA; that the bills of entry were prepared and
filed by them based on the documents supplied by the
importers; that there was no positive evidence on
record to show any mala fide intention on the part of
them or that they were an accomplice or abettor in the
offence of mis-declaration, mis-classification and under
invoicing of the goods with an intent to evade customs
duty; that in the instant case there is not any evidence
to indicate that the they had any prior knowledge about
the violation of any provisions of the law, which would
have rendered the goods liable to confiscation; that the
importer did not implicate them in statement; that they
scrupulously followed the KYC norms and other
requirements as expected of them; Invocation of
Section 112,114A or 114AA is not legally sustainable;
that no separate penalty is imposable on them when
penalty has already been imposed on the proprietor;
that they have already faced proceedings under CBLR
2013; and finally that they rely upon plethora of
judgments holding that CHA cannot be penalized for
wrongdoings of importers in absence of mens rea on
behalf of CHA. (No one appeared and no oral
submissions made in respect to Appeal filed by Shri
Rajender Prasad figuring at serial no. 5 in table above).
(C) Appellant- Shri Sushit Kumar Mishra against
imposition of penalty: The investigations have
indicated that Shri Mishra was working as one of the
members of the syndicate manipulating the import
documents and forging certain documents for obtaining
the clearance of import consignments. It is contended
on his behalf that he was not physically involved in
forging/faking of import documents, no penalty can be
imposed on him. He relied upon certain judgments to
impress that no penalty can be imposed on Middle
man/Facilitator/Coordinator invoking Sections 112,114A
or 114AA.
10 CUS/52445 of 2018
(D) Appellant- Shri Kuldeep Singh - a Freight
Forwarder against imposition of penalty: That the
Appellant had a very limited role of moving the goods
from the Air Cargo Area to the importer‟s place for a
limited period as an authorized representative of the
importer; that he didn‟t have authority either to verify
genuineness of the import documents or competency to
deal with customs procedure; that he acted on the
declaration, information and documents provided by the
importer; that he didn‟t receive any consideration
except agency fee; that neither he was involved in any
manipulations of the documents nor defaulted in
forwarding a revised invoice to the CHA for clearance of
impugned goods; that he was not competent to verify
or know the technicalities pertaining to the
requirements of BIS/ETA certificates, classification or
valuation of impugned goods; that no mens rea has
been proved against him for invoking Section 112 and
114AA of the Customs Act; and finally that he seeks
support from judgments in the case of Sneha Sales
Corporation [ 2000(121) E.L.T. 577 (S.C.) ], Sampat
Raj Dugar, Taparia Overseas, K. Uttamlal to advance his
cause.
(E) Appellant- Shri Rajinder Madhok - a Consultant
against imposition of penalty: That the Appellant did
not commit/omit that led to confiscation of impugned
goods; that only importer can be penalized for
rendering goods liable for confiscation; that he cannot
be penalized for wrongdoings of importers in absence of
mens rea on his behalf; that he tendered only his
opinion in capacity of a consultant; that no positive
evidence was adduced against him by the Department
on the issue of abetment/collusion; and finally that no
penalty can be imposed on Middle man/Facilitator/
Coordinator invoking Sections 112,114A or 114AA.
10. Summary of arguments on behalf of the Revenue: The
Departmental Representative (DR), at the outset, contended that
this is a case wherein forgery/fraud has been perpetrated on
revenue by the importer, its executive, clearing agents and some
other persons with an intent to evade customs duty. The learned
Departmental Representative impressed upon as follows :-
(i) It is contended that it is a fraud in law if a party
makes a presentations, which he knows to be
false, and injury ensues therefrom although the
motive from which the representations
proceeded may not have been bad. It is also
well settled that misrepresentation itself
11 CUS/52445 of 2018
amounts to fraud. A fraudulent
misrepresentation is called deceit and consists
in leading a man into damage by wilfully or
recklessly causing him to believe and act on
falsehood. Of course, innocent
misrepresentation may give reason to claim
relief against fraud.
(ii) An act of fraud on Revenue is always viewed
seriously. "Fraud" and collusion vitiate even the
most solemn proceedings in any civilized
system of jurisprudence. It is a concept
descriptive of human conduct either by letter or
words, which includes the other person or
authority to take a definite determinative stand
as a response to the conduct of the former
either by words or letter.
(iii) It has been held by Apex Court in the case of
Commissioner of Customs, Kandla v. Essar
Oil Ltd. - 2004 (172) E.L.T. 433 (S.C.) that
by "fraud" is meant an intention to deceive;
whether it is from any expectation of advantage
to the party himself or from the ill-will towards
the other is immaterial. The expression "fraud"
involves two elements, deceit and injury to the
deceived. Undue advantage obtained by the
deceiver, will almost always cause loss or
detriment to the deceived. Similarly a "fraud" is
an act of deliberate deception with the design
of securing something by taking unfair
advantage of another. It is a deception in order
to gain by another‟s loss. It is a cheating
intended to get an advantage as held in S.P.
Chengalvaraya Naidu v. Jagannath [1994
(1) SCC 1].
(iv) In a leading English case i.e. Derry and Ors. v.
Peek (1886-90) All ER-1 what constitutes
"fraud" was described thus : (All ER p. 22 B-C)
"fraud" is proved when it is shown that a false
representation has been made (i) knowingly, or
(ii) without belief in its truth, or (iii) recklessly,
carelessly whether it be true or false". This
aspect of the matter has been considered by
Apex Court in Roshan Deen v. Preeti Lal
[(2002) 1 SCC 100], Ram Preeti Yadav v.
U.P. Board of High School and
Intermediate Education [(2003) 8 SCC
311], Ram Chandra Singh‟s case (supra) and
Ashok Leyland Ltd. v. State of T.N. and
Another [(2004) 3 SCC 1]. Suppression of a
material document would also amount to a
fraud on the court, as held in Gowrishankar v.
12 CUS/52445 of 2018
Joshi Amha Shankar Family Trust, [(1996)
3 SCC 310] and S.P. Chengalvaraya Naidu's
case (AIR 1994 SC 853). No judgment of a
Court can be allowed to stand if it has been
obtained by fraud. Fraud unravels everything
and fraud vitiates all transactions known to the
law of however high a degree of solemnity.
11. Thus it has been contended by learned Departmental
Representative that all the appeals in this case merit dismissal in
view of the proven fact that all the relevant persons/firms mis-
declared the description and value of the goods with an intention
to evade customs duty and to circumvent the provisions of
import - export policy of India and therefore the impugned
order-in-original does not deserve any interference. The learned
Departmental Representative has made following submission on
the individual role played by various persons/firms.
(A) On the Appellant- Importer
(i) Mis-declaration of description of goods:
The goods covered by 2 live Bill of Entry were
attempted to be cleared on the strength of
forged invoices shown to be issued by M/s
Wang Technologies Limited, whereas the two
consignments were shipped by M/s Pax
Technology Limited, Hong Kong; that mis-
declaration about supplier of the goods was
resorted to circumvent registration of import in
Special Valuation Branch (SVB) and avoid
verification to the effect whether the buyer and
supplier were „related‟ party, and if so, whether
the relationship influenced the transaction
value; that the impugned goods were Point of
Sale (POS) Terminals/devices and required
certification from BIS for their clearance and
this fact was in the knowledge of the importer,
however, to circumvent this requirement, the
impugned goods in some of the Bills of entry
were mis-declared as „Paper Rolls‟, „Paper for
printing in payment Debit/Credit Device‟,
Dummy and „D 180 Terminal (Part of Payment
Debit/Credit Device)‟; that during the
examination of goods covered by live Bills of
entry, they had also tried to deceive the
investigating officers by purposefully stating
that the two shipments containing D-180
Terminal did not have necessary software as
13 CUS/52445 of 2018
well as GPRS and that those were not
operatable on wi-fi/GPRS/Bluetooth, that D-
180 Terminal could be connected via USB cable
to Laptop/Desktop and hence neither NOC from
WPC was required nor any ETA type approval
certificate was required for the two
consignments. It is a matter of record that
when the goods were put to test by the
investigating officers that bluetooth was
installed in the goods and those goods were
bluetooth enabled, then only the appellant-
Importer accepted that the device D-180 was
Bluetooth enabled, the import of which required
NOC from WPC and ETA Type Approval
Certificate. This fact establishes an attempt of
wilful mis-declaration of description of goods
and mens rea on behalf of appellants to evade
duty and circumvent Foreign Trade Policy
provisions applicable to impugned goods. It is
also a matter of fact that even the Master
Distribution Agreement mentioned „transfer
prices offered by the Company to the Master
Distributor for the main POS models. Inbuilt
contactless is included on models where
available‟, despite this the appellant chose not
to declare this fact and rather attempted to
suppress the actual description for obvious
reasons.
(ii) Undervaluation of goods: That the Master
Distribution Agreement prescribed that the
appellant-importer was required to pay an
amount of USD 15 towards Transfer Price of
Hardware (D 180) per unit plus USD 45 per unit
on account of Licence Fee; that similarly in
respect to terminals S-90, SP-30 and D 200
terminals, the importer was required to pay an
amount of USD 39, USD 75 and USD 25
respectively towards Transfer Price of Hardware
per unit plus USD 60 for S Series and USD 45
for D Series respectively on account of Licence
Fee; that the director of the appellant firm
categorically admitted that the Software
Licence was an integral part of these devices
without which POS machines could not be
operated; that she had also agreed that she
paid the Licence Fee to M/s PAX, Hongkong
once the customer/bank injected the licence
key into the device and that that the value of
14 CUS/52445 of 2018
those devices was a total of the value of
devices plus the value of software licence fee;
that it was also admitted fact that the Software
Licence Fee was an integral part of the
hardware imported by the Appellant and they
were mandatorily required to pay the Licence
Fee to the overseas supplier; that it was
categorically admitted that the licence fee was
required to be paid to the overseas supplier to
have Euro Master Visa encryption, which was
mandatory for the devices; that the Software
Licence was an integral part of the devices,
without which the MPOS machines could not be
operated; that according to Agreement the
software was not present at the time of import
of goods and the key was injected by the end
customer/banks but the Appellant were paying
the licence fee to M/s Pax Technology Ltd.,
Hongkong once the customer/bank injected the
licence key into the device; the licence fee was
required to be paid to the overseas supplier to
have Euro Master Visa encryption so as to
make the hardware under import operational
and that the licence fee was required to be paid
to the overseas supplier only and not to any
other person or entity; that hence the payment
of licence fee to M/s Pax Technology Ltd.,
Hongkong was an essential element of the
hardware under import and also the condition
of sale of the hardware as per Master
Distribution Agreement and hence the element
of licence fee paid or payable to the overseas
supplier was required to be included in the
assessable value of the import of hardware for
the purpose of determination of true
assessable value of the goods under import and
payment of duty of Customs thereon in terms
of provisions of Rule 10(1)(c) of the Customs
Valuation (Determination of Price of Imported
Goods) Rules, 2007 for the imports made by
the Appellant-Importer .
(iii) Mis-classification of goods: That MPOS
specially D-180 is undisputably a wireless
Automatic Data Processing Machines (ADPM)
which facilitate payments and hence the same
merit classification under Chapter Heading No.
15 CUS/52445 of 2018
84713090; that even the catalogue of D180
MPOS produced during the argument mentions
in the specifications that that machine
incorporates, inter alia, Memory, Processor,
Display, Keypad, Magnetic Card reader and
Smart Card reader; that Memory and,
Processor forms Central Processing Unit( CPU),
Display forms the Output device and
Keypad/Magnetic Card reader/Smart Card
reader forms the input device and hence the
Machine has the configuration of a full fledged
ADPM; that the principle function of the device
is automatic data processing and hence despite
having some other alternative/complimentary
functions like facilitating payments, the goods
merit classification under Customs Tariff
Heading 84713090 as ADPM in terms of Note 3
of Section XVI of Schedule I appended to
Customs Tariff Act 1975; that the identical
goods have been classified under Customs
Tariff Heading 8471 holding the devices as
Automatic Data Processing Machine in US
Ruling NY E81686 dated 10.05.1999 an internet
downloaded copy of which was submitted; that
the said Ruling has persuasive value in view of
the fact that India and USA are signatory to
WTO and both countries follow HSN for Tariff
classification .
(iv) Confiscation and Penalty: That the goods in
question were Mobile Point of Sale Devices
(MPOS), and the clearance of which was
subject to production of Registration Certificate
from the Bureau of Indian Standards (BIS) and
Equipment Type Approval (ETA) from Wireless
Planning & Coordination (WPC), which the
Appellant-Importer neither submitted at the
time of filing Bill of Entry, nor have applied to
the same with the concerned Departments and
did not possess the same at the time of Import.
That as per evidences placed on record, it is
proven that the Appellants were well aware
about the mandatory requirements of WPC and
BIS certification as early as in July, 2014 when
one consignment covered under Bill of Entry
No. 6221058 dated 24.07.2014 pertaining to
M/s Pax Technologies Pvt. Ltd. was not allowed
clearance by the Deputy Commissioner for want
of WPC and SVB order; That rather than
obtaining the mandatory statutory certification
from WPC and BIS, the Appellants indulged
themselves to seek clearance of consignments
through unscrupulous persons, who not only
16 CUS/52445 of 2018
forged the documents but also resorted to mis-
declaration before Customs to secure clearance
of the goods; Though the Appellants pleaded
wrong supply of goods on behalf of supplier,
they failed to provide any written
communication from the supplier on this aspect
and only argued that they went to China and
gave verbal directions for the modifications to
be made in the devices; that Shri Randhir
Singh in his statements has categorically
admitted that the Appellant - importer
themselves handed over to him the documents
for filing Bills of Entry Nos. 3851878 and
3851698, both dated 08.01.2016, in respect of
which the invoices submitted were issued by
M/s Wang Technologies Limited, whereas the
fact remained that the said two live
consignments were shipped by M/s Pax
Technology Limited, Hong Kong, because, they
knew that filing of the said Bills of Entry on the
basis of invoices issued by M/s Pax Technology
Limited, Hong Kong would have attracted
special valuation provisions; that consignment
covered under Bill of Entry No. 6221058 dated
24.07.2014 was also stopped clearance for
want of WPC and SVB Order; that the
Appellant-Importers were not in possession of
any such ETA from WPC at the time of filing the
said two Bills of Entry and hence the imports
were in contravention of the provisions of EXIM
Policy to this effect; that as provisioned under
Para 2.2 of the Foreign Trade Policy, all
imported goods were also be subject to
domestic laws, acts, rules, orders, regulations,
technical specifications, environmental and
safety norms as applicable to domestically
produced goods; that according to General
Notes to the Import Policy, the import of Point
of Sale devices were subject to BIS
certification, however, the Appellant-importers
did not have the mandatory BIS certification for
the goods imported; that the BIS subsequently
produced were not relevant for the goods; that
their various acts of omission and commission
rendered the impugned goods liable for
confiscation under Sections 111(d) and 111(m)
of the Customs Act, 1962 and they rendered
themselves liable to penalty under Section
112(a)/114A of the Customs Act, 1962; that,
though the Deputy Commissioner, Import Shed
instructed them to produce the catalogue,
clarification and evidence to prove that the
17 CUS/52445 of 2018
product declared as Dummy devices were
indeed so and not Point of Sale devices, the
appellants brought the catalogue and informed
the Deputy Commissioner, Import Shed that
the goods were meant for exhibition purpose
only and also gave an undertaking on Rs. 50
Indian Non-Judicial stamp paper duly notarized
that the same would be re-exported within
thirty days and a sample each of D-200 and SP-
30 would be submitted for BIS & WPC for
certification/ type approval, however,
afterwards the clearance of this consignment
covered under Bill of Entry No. 7817932 dated
26.12.2014 was secured by mis-representing
the facts as during the course of investigation
the Appellants did not submit anything to the
effect that the goods cleared under Bill of Entry
No. 7817932 dated 26.12.2014 had been re-
exported or that BIS & WPC certification for the
imported goods were obtained by them; that
this way the Appellants also violated the
undertaking executed by them; that the goods
covered by many Bills of Entry were allowed
clearance by the EDI System under RMS where
the consignments were neither subjected to
assessment nor any examination thereof was
conducted by the Customs; that the Appellants
had also rendered themselves liable to penalty
under Section 114AA of the Customs Act, 1962
to the extent that they did not pay appropriate
Customs duty and they knowingly and
consciously made and used incorrect and
fabricated invoices, declarations and other
documents/records before the concerned
customs authorities in order to secure the
clearance of the impugned goods; that the
Appellant Ms. Latha Priyadarshini failed to
establish that she was unaware of the unlawful
activities being carried out on her behest; that
it is established that she was the architect of
the mis-declaration of value as well as the
description of the goods under import in as
much as she in her statement dated
18.01.2016 categorically admitted that she and
her mother-in-law were the two Directors of
M/s Pax Technologies Pvt. Ltd. but she was the
one who was managing the operations and all
other activities of the company and her mother-
in-law Ms. Dhanamma was a sleeping Director
holding only 10% shares; that from the
records, it is clearly evident that she had mis-
led the investigations and to hoodwink her role
18 CUS/52445 of 2018
in the whole conspiracy and hence she was the
brain behind the conspiracy and therefore, was
liable for penal action under Sections 112, 114A
and 114AA of the Customs Act, 1962.
.
(B) Appellant- CHAs : It is mandated on the part of the CHAs to verify the genuineness of the importer, correctness of the documents on the basis of which clearances were sought and also to guide the importer about the statutory requirements especially certification from BIS and WPC; that they filed the Bills of Entry on the basis of documents handed over not by importer but by an unauthorised person Shri Randhir Singh; that they did not take the catalogue from the importer and filed the Bills of Entry on the basis of information provided by Shri Randhir Singh classifying the goods under wrong classification; In case of live Bills of Entry the Appellant-CHA stated that they received the documents from Shri Randhir Singh and filed the documents on the basis of invoice submitted by him and regarding the chapter heading 39269099 under which the goods had been classified in two live Bills of Entry, they stated that they had done it by mistake as they thought that the goods were plastic parts of the device; that in case of the two live Bill of Entry item description was declared as „Paper for printing in payment Debit/Credit Device‟and„D-180 MPOS Terminal (Part of payment Debit/Credit Device)‟ whereas the actual goods under import in these two consignments were complete D 180 Terminals; that they didn‟t guide/advise the importer about the mandatory requirement for importation of the impugned goods of which name and description could have alerted them to seek more information for the purpose of classification, importability and duty incidence ; that the documentary description of impugned goods itself suggested to be operatable on GPRS, they could have asked the details/specification of the goods and in case of any difficulty, they had option to bring about the matter to the knowledge of department; they chose otherwise and secured clearance of the subject consignment without BIS and WPC certification; that they were supposed to be well aware about the statutory obligations required to be fulfilled for the imported goods; that in respect of some consignment the Appellant- CHA were well aware about the fact and had admitted during the investigations that the original invoice of the consignment showed that the supplier was M/s Pax Technology Ltd., Hongkong and buyer was M/s Pax Technologies Pvt. Ltd. whereas the Bills of Entry were filed against the revised invoice on the basis of High Sea 19 CUS/52445 of 2018 Sale agreement to circumvent the related party issue in consultation with Shri Rajinder Madhok; that in respect of one consignment the CHA along with importer had undertaken before the Deputy Commissioner, Import Shed that the goods were not Dummy and were imported for exhibition purpose only, they further undertook that the impugned goods would be re- exported within 30 days and a sample of each of D-200 and SP-30 would be submitted for BIS & WPC Certification and on the basis of the undertaking/declaration made by them, goods under import in the Bill of Entry No. 7817932 dated 26.12.2014 were got cleared, however, they failed to produce any evidence to prove that the said goods got the required certification or that they were re- exported.; that in case of impugned Bill of Entry No. 3239991 dated 13.11.2015 for the goods declared as D- 180 Terminal MPOS, the CHA filed the Bill of Entry on the basis of documents from Shri Kuldeep Singh, Director of M/s VSG Shipping and Logistics Pvt. Ltd.; that they filed Bill of Entry without going through the veracity of the documents and statutory requirement for importation of goods. Thus they acted upon the advice of Shri Kuldeep Singh (Who was working on the direction of Ms. Latha Priyadarshini) without applying their mind and mandatory obligation required for CHA/CB; that it was imperative on their part to guide the importer about the statutory obligation, however, instead of fulfilling the statutory certification for the goods handled by them, they secured clearance thereof; that they acted to help the importer to secure clearance of the impugned goods without statutory WPC and BIS certification for monetary benefits; that by their above- mentioned act of omission and commission, the Appellants-CHAs have rendered the impugned goods liable for confiscation under Sections 111(d) & (m) of the Customs Act, 1962 and thereby they have rendered themselves liable to penalty under Sections 112 and Section 114AA of the Customs Act, 1962; that all the Appellant-CHAs instead of handling the documents/goods/duty payment themselves have knowingly allowed unauthorized persons namely Shri Randhir Singh ,Shri Sanjay Kataria, Shri Sushil Kumar Mishra and Shri Rajender alias Raju to deal with consignments for monetary benefit; that such being the fact, the case is squarely covered by the decision of Hon‟ble Madras High Court in the case of K.V.Prabhakaran 2019 (365) E.L.T. 877 (Mad.) wherein the penalty imposed on CHA in similar circumstances was upheld. Further, DR placed reliance on the decision in Noble Agency v. Commissioner of Customs, Mumbai [2002 (142) E.L.T. 84 (Tri. -
20 CUS/52445 of 2018 Mumbai)] wherein a Division Bench of the CEGAT, West Zonal Bench, and Mumbai has observed:-
"The CHA occupies a very important position in the Customs House. The Customs procedures are complicated. The importers have to deal with a multiplicity of agencies viz. carriers, custodians like BPT as well as the Customs. The importer would find it impossible to clear his goods through these agencies without wasting valuable energy and time. The CHA is supposed to safeguard the interests of both the importers and the Customs. A lot of trust is kept in CHA by the importers/exporters as well as by the Government Agencies. To ensure appropriate discharge of such trust, the relevant regulations are framed. Regulation 14 of the CHA Licensing Regulations lists out obligations of the CHA. Any contravention of such obligations even without intent would be sufficient to invite upon the CHA the punishment listed in the Regulations...."
It would be pertinent to mention that the aforesaid observations of the CEGAT, West Zonal Bench, Mumbai was approved by Hon‟ble Apex Court in the case of K.M. Ganatra & Co [ 2016(332) E.L.T. 15 (S.C.)] and it was held that misconduct on behalf of CHA had to be viewed seriously.
(C) Appellant- Individual: that the Appellant Shri Sushil Kumar Mishra actively participated with Shri Sanjay kataria and Shri Rajender alias Raju in forging/faking of import documents for monetary gain; that though he pleaded that he himself was not involved in forging/faking documents, he admittedly played active role in the clearance of goods of M/s Pax in co- ordination with different people viz. Sanjay Kataria, Rajender alias Raju or Randhir and also one Shri Sandeep for pecuniary gains; that he not only associated himself in creation of forged invoices and other documents for the erroneous import of the impugned goods on the behest of the director of the import firm, but also personally concerned himself in the clearance of the said goods ; that the Appellants‟ working partner Shri Rajinder admitted of having generated the forged copies of invoices where he not only lowered the value of the goods under import but also changed the description of the goods in as much as „Paper Rolls‟ were added as description in Bills of Entry No. 3526607 dated 09.12.2015, 3346966 dated 23.11.2015, 3141261 dated 03.11.2015, 2763917 21 CUS/52445 of 2018 dated 30.09.2015, 2121203 dated 03.08.2015 and 2094937 dated 31.07.2015, with an intention that the EDI System would facilitate clearance of the consignments under RMS, where no assessment or examination is generally required by Customs; that the Appellant was aware that even though lesser duty was paid to be paid/and to deposited with the Department, he with his accomplice-partners charged normal duty amount from the importer by creating forged documents and the extra money earned was distributed by the three - the Appellant , Shri Sanjay Kataria and Shri Rajender alias Raju; that he intentionally and maliciously associated himself with the impugned goods, which he knew were liable for confiscation under Section 111 of the Customs Act, 1962; that he was very much aware about the act of forging the invoices and other documents. He aggressively assisted the director of import firm to secure clearance of the impugned goods dodging inspection/examination of the said consignments by the Department. There are enough evidences to establish that the Appellant was intentionally and purposely associated himself with the impugned goods in the greed of financial benefits, which he knew were liable for confiscation under Section 111 of the Customs Act, 1962; that by his above-mentioned act of omission and commission, the Appellant have rendered the impugned goods liable for confiscation under Sections 111(d) & (m) of the Customs Act, 1962 and also rendered himself liable to penalty under Sections 112 and Section 114AA of the Customs Act, 1962.
(D) Appellant- Freight Forwarder : That the Appellant Shri Kuldeep Singh was a freight forwarder and he took the work related to consignment covered under Bill of Entry No. 3239991 dated 13.11.2015 on turnkey basis and assigned the work of the customs clearance to the CHA firm M/s Rubal Logistics on the basis of the documents provided by the appellant - importer; that the Appellant forwarded all the documents related to the import of the goods viz. D 180 Terminals to the CHA firm M/s Rubal Logistic Pvt. Ltd. as per the direction of Ms. Latha without going through the veracity and genuineness of the import documents on the basis of which clearance was sought; that the said documents were sent through e-mail to the said firm as received from Ms. Latha; that he came across two invoices bearing same reference „IN15-10857 dated 04.11.2015‟ and duplicacy of the invoice was very much evident, he did not bring this fact to the notice of the customs authorities; that not only he forwarded the revised invoice (wherein the name of foreign supplier was manipulated as M/s Wang Technology to circumvent 22 CUS/52445 of 2018 SVB investigation) to the CHA firm for clearance of goods, but he also toed the line of unscrupulous importer that the previous invoice ( which mentioned correct name of foreign supplier M/s Pax Technology , Hongkong) was sent by mistake and thus, the Appellant played the role of facilitator between the importing firm and the CHA firm M/s Rubal Logistics Pvt. Ltd. and secured clearance of the goods which were grossly undervalued, mis-declared to its description and circumvented the mandatory certification from BIS and WPC; that by his above-mentioned act of omission and commission, Appellant Shri Kuldeep Singh rendered the impugned goods liable for confiscation under Sections 111(d) & (m) of the Customs Act, 1962 and rendered himself liable to penalty under Sections 112 and Section 114AA of the Customs Act, 1962.
(E) Appellant- Consultant: That the Appellant Shri Rajinder Madhok is a consultant by his experience in the field and he advises the importer/exporter on the issue of related party transaction and SVB matters; that he facilitated the clearance of goods imported vide Bill of Entry No. 7817932 dated 26.12.2014 wherein the goods were mis-declared as „dummy units‟. He admitted that he guided Ms. Latha Priyadarshini to circumvent the issue of „related party‟ transactions and SVB registration by suggesting her to show imports on High Sea Sale basis and as he had large cliental, he offered to arrange High Sea Sale of the aforesaid goods; that the importer had agreed to pay Rs. 34,000/- for his services in respect of advising her on executing a High Sea Sale agreement with an Indian Firm, however, Ms. Latha did not pay the said amount till date because she approached Shri Sanjay Kataria for clearance of the impugned goods imported by the said Bill of Entry. It has been established categorically that Appellant played a vital role by advising Ms. Latha Priyadarshini to circumvent related party transaction valuation of the impugned goods imported vide Bill of Entry No. 7817932 dated 26.12.2014. The consignment was thus mis-declared to its value, and the requirement BIS and WPC certification. He used his expertise to circumvent the provisions related to assessment and clearance of imported goods ; that by his above-mentioned act of omission and commission, the Appellant rendered the impugned goods liable for confiscation under Sections 111(d) & (m) of the Customs Act, 1962 and rendered himself liable to penalty under Section 112 and Section 114AA of the Customs Act, 1962.
23 CUS/52445 of 2018
12. We have considered rival submissions in detail as well as the record of the appeal. It is a matter of record that the appellant namely M/s Pax Technologies Pvt. Ltd. has imported consignments of Mobile Point of Sale (MPOS) Devices under various Bills of entry, the detail of 12 Bills of Entries are given below :-
S. B/E No. B/E Date % of Description Chapter Qty. Decla Name of No. exam of goods as Heading Impor red CHA/ CB prescribed per B/E as per ted value (M/s) B/E (USD) per unit
1. 5994463 02/07/ 100 S-90 GPRS 84700010 25 97 Chinta 2014 + ID Haran barcode Ojha Terminal S-90 soft 84732900 1 4075 ware licence
2. 5994464 02/07/ 100 S-90 Model 84709010 5 97 Chinta 2014 + GPRS + Haran ID barcode Ojha Terminal S-900 GPRS + RF 84709010 3 97 Terminal Software licence of 84732900 3 1235 S90 + S900
3. 6221058 24/07/ 100 S-90 GPRS 84709010 3 97 Chinta 2014 (Still Terminal Haran lying (Barcode Ojha uncleared Terninal) as the D-180 BTH 84709010 3 60 importer Terminal has not D-210 84709010 3 97 given reply GPRS to the Terminal query raised by S-58 Dial + 84709010 3 60 the IP Terminal department S-900 till date) GPRS 84709010 3 100 Terminal Software licence kit 84732900 1 1503
4. 7817932 26/12/ 10 D-200 90230090 4 20 R.U. 2014 Terminal Imports (Mobile Exports payment Pvt. Ltd.
terminal dummy) sample SP-30 90230090 2 15 Terminal (Mobile payment terminal dummy) sample 24 CUS/52445 of 2018
5. 2094937 31/07/ RMS S-90 48237090 200 8.5 Exim 2015 Cargo Service
6. 2121203 03/08/ RMS Paper Roll 48237090 1000 .25 Exim 2015 Rolls Cargo D-180 48237090 Service MPOS 1000 2.25 Terminal Rolls (Parts of payment Debit/ Credit Device)
7. 2763917 30/09/ RMS Paper Roll 48237090 80 .25 Exim 2015 Cargo Barcode 48237090 40 8.25 Service Reader S-90
8. 3346966 23/11/ RMS Paper for 48237090 50 .42 Exim 2015 printing in Cargo payment Service Debit/ Credit device D-180 48237090 42 4.5 Terminal (Part of payment Debit/ Credit Device)
9. 3141261 03/11/2015 10 Paper Roll 48237090 200 .25 Exim D-180 Cargo MPOS Service Terminal (Part of payment Debit/ Credit Device)
10. 3239991 13/11/2015 10 D-180 (D- 84702900 457 15 Rubal 180 Pin pad Logistics is used to Pvt. Ltd.
connect
with the
laptop to
do the
transaction
-
connectivity
via USB
port only)
11. 3526607 09/12/ RMS Paper for 48237090 1000 .25 Prompt
2015 printing in Rolls Air &
payment Sea
Debit/ Cargo
Credit Pvt. Ltd.
Device
D-180 48237090 2000 1.5
Terminal pcs.
(Part of
payment
Debit/
Credit
Device)
12. 3650483 19/12/ RMS Paper for 48237090 1000 .23 Prompt
2015 printing in Rolls Air &
payment Sea
Debit/ Cargo
Credit Pvt. Ltd.
Device
25 CUS/52445 of 2018
D-180 48237090 4600 1.45
Terminal pcs.
(Part of
payment
Debit/
Credit
Device)
Apart from these 12 Bills of entry the appellant has imported two more consignments covered by Bill of Entry No. 3851878 dated 8 January 2016 and Bill of Entry No. 3851698 also dated 08 January 2016.
13. It is also a matter of record that two Bills of Entry both dated 8 January 2016 are live Bills of Entry which are pending for clearance. It is an admitted fact that M/s Pax Technologies Pvt. Ltd. appellant - importer has been appointed sole distributors of MPOS (Mobile Point of Sale) devices and POS (Point of Sale) devices by Pax Technology Ltd., Hongkong in India. Ms. Latha Priyadarshini one of the appellant in these appeals, is an active director of M/s Pax Technologies India and looks after the entire work of importation, marketing of the imported products, etc. It has come out very categorically from the investigations conducted by the Department that Ms. Latha Priyadarshini was fully aware about the nature of the goods being imported by her in the name of her company. She was also well aware as to how much was the value of the hardware of the machine and how much was the value of the software required for the purpose of successful operation and functioning of these machines. She was also aware that the type of the equipments imported by their company required ETA (Equipment Type Approval) from Wireless Planning and Coordination Wing of Ministry of Communication and Information Technology‟s as per the prevailing Import Export Policy. These machines/equipments also needed approval and registration from Bureau of Indian Standards (BIS). The appellant namely Ms. Latha Priyadarshini was also aware that since the imports are being made from their related company based in Hongkong, the imports needed registration/clearance from Special Valuation Branch of Customs Department for their 26 CUS/52445 of 2018 legitimate importation. Ms. Latha Priyadarshini with the help of certain other persons made plan to circumvent the provisions of Import Export Policy requirements as well as scrutiny from Special Valuation Branch of the Customs by resorting to mis- declaration of the import consignment of MPOS/POS in connivance of the various persons. These persons are also appellant before us in this matter. We have taken note of the fact that Shri Rajinder Madhok in his statement has categorically mentioned that Ms. Latha Priyadarshini alongwith Shri Sanjeev Sharma has met him and made certain enquiries with regard to formalities pertaining to Special Valuation Branch and in the discussion she has also asked as to how the provisions of Special Valuation Branch can be bye-passed. Thereafter with connivance of several other persons she has mis-declared the basic details of the import consignments including the description of the import consignments.
14. A glance at the table mentioned in the preceding para No. 11 reveals that the MPOS machines were mis-declared as paper rolls/bar code reader and in some of the Bills of Entry the description of import consignment has been given as "S-90 model and paper with printing and payment debit/credit device". We find that a Master Distributor Agreement has been signed between M/s Pax Technologies, Hongkong and M/s Pax Technologies, India which makes the Indian arm a sole master distributor of Hongkong based companies products namely various models of „Mobile Point of Sale/Point of Sale devices‟. The master distributor agreement has an Appendix I which provides the transfer prices of various models of MPOS alongwith the prices of software, which is essential component for functioning of the MPOS devices. When the prices as given in the Appendix A to the master distributor agreement are compared with the declared import prices of the import consignments, we find that the declared prices of imported consignments of the various models of MPOS/POS have drastically been mis-declared. The 27 CUS/52445 of 2018 only defence which has been taken by the appellant - importer and its director Ms. Latha Priyadarshini is that they have been cheated by various Customs House Agents and for which a First Information Report (FIR) has been lodged by the importing company in a Police Station. We do not find any leg to this defence as it has come out very categorically that she was fully aware about the statutory requirements of the Customs Act, Import Export Policy for legitimate import of MPOS consignments as well as the price structure (various models of the MPOS/POS). She was aware about the correct prices of MPOS/POS imported by her and her company as the agreement of distribution between the company and the foreign supplier has been signed by her. We find that the appellant - importer has given varied description for the import item namely Mobile Point of Sale (MPOS)/Point of Sale (POS). The descriptions of the import goods which we find in the Bills of Entry are actually in utter disregard to the provisions of Customs Act and indicate that the import consignments were being described to the whim and fancy as well as convenience of the appellant - importer, its active Director and clearing agents. It can be seen from the table given in the preceding para that in some of the Bills of Entry the consignment has been described as "S-90 GPRS + ID BAR CODE TERMINAL" classified under 84709010 of the Customs Tariff Act, 1975; in two Bills of Entry the consignment has been described as D-200 Terminal (Mobile payment terminal - Dummy sample) classified under Customs Tariff Heading 90230050; in one Bills of Entry No. 2094937 dated 31/07/2015 goods have been described only as "S-90" and classified under Customs Tariff Heading 48237090 (which pertains to articles of paper). In the other Bills of Entry also goods have similarly been mis-declared as "paper for printing in payment debit/credit device, paper rolls, parts of plastic (the description given in the live Bills of Entry).
15. The appellant - importer and its Executive Director Ms. Latha Priyadarshini cannot pretend ignorance of such a blatant 28 CUS/52445 of 2018 wrong description of the import consignments of MPOS/POS. We find that the consignments of MPOS were not described correctly even in a single Bill of Entry filed by this importer. Of course the wrong description was adopted as a modus operandi to bye-pass the provisions of the Customs Act, 1962 readwith import-export policy of relevant time which required that consignment of MPOS/POS a No Objection Certificate in the form of ETA (Equipment Type Approval) from the WPC Wing of Department of Telecommunication and registration with Bureau of Indian Standards (BIS) and above all to evade customs duty.
16. Now, we undertake to analyze the findings given in the impugned order-in-original regarding mis-classification of import consignment under the Customs Tariff Act 1975 with an intend to evade the customs duty. We find that the import consignments of MPOS/POS have been classified as follows :
In 3 Bills of Entry having No. 5994463 dated 02/07/2014, 5994464 dated 04/07/2014 and 6221058 dated 24/07/2014, the import consignments of MPOS have been described and classified as follows :
"S-90 GPRS + ID BARCODE TERMINAL CTH 84709010"
We find that Customs Tariff Heading 8470 primarily covers goods such as calculating machines and pocket size data recording device, cash registers etc., while the classification of the subject MPOS machines have been confirmed by the Adjudicating Authority under Customs Tariff Heading 84713090. The Customs Tariff Heading 8471 primarily covers the products such as "Portable Automatic Data processing machines, weighing not more than 10 kg. consisting of at least a central processing unit, a keyboard and display". The impugned goods namely MPOS are admittedly Automatic Data processing machines which facilitate payments. We have perused the catalogue of D-180 Model of MPOS and find that it had Memory, CPU, display, keypad, magnetic card reader and smart card reader. It is a 29 CUS/52445 of 2018 matter of fact that the device has a Central Processing Unit (CPU), display serum as an output device and keypad/card reader constitute as input device, hence we can safely conclude that the device is a full fledged ADPM (Automatic Data Processing Machine). Thus, we hold that the import consignments of MPOS/POS merit classification under Customs Tariff Heading 84713090. We also find that US Ruling NY3 81686 dated 10/05/1999, a downloaded copy of which was placed on record by the Departmental Representative, also supports classification of subject goods under Chapter Heading 84713090.
17. We find that the consignments of MPOS/POS in the other Bills of Entry had been mis-classified as follows :
(i) In two Bills of Entry Customs Tariff Heading 90230090 which pertains to instruments; apparatus and Models etc. for demonstrational purpose ;
(ii) In the six Bills of Entry under Customs Tariff Heading 48237090 which pertains to "other paper, paper board cellulose wadding etc."
(iii) Other live Bills of Entry have been classified under Customs Tariff Heading 39269099 which pertains to "other articles of plastic".
18. Thus, we find that the importer/appellant and its Executive Director Ms. Latha Priyadarshini were mis-classifying MPOS/POS consignments in utter disregard to the provisions of Customs Tariff Act and at their own free will and thus they have certainly resorted to mis-declaration and mis-classification of the import consignments with an intent to evade duty and to avoid compliance of other allied Acts as mentioned in preceding paras and thereby making all the import consignments liable for confiscation on this count under Section 111 of the Customs Act, 1962.
19. With regard to the valuation of the import consignments of MPOS/POS, the per unit price declared under various Bills of Entry have varied between U.S. $ 97 per unit to as low as U.S. $ 30 CUS/52445 of 2018 1.45 per unit for D-180 Model of MPOS. It has been established by the investigations that a „Master Distribution Agreement‟ has been signed by the appellant - importer and its Executive Director Ms. Latha Priyadarshini with Pax Technology Ltd. Hongkong on 1 November 2014. Some of the relevant paras of agreement read as follow :
"Appendix A shows current transfer prices agreed between the company and the master distributor of the company main products. The transfer prices may change with time in line with specific business deals or due to situation of the competitive nature. The commission due to the master distributor is defined as the % specified in Appendix A, calculated on the difference between the price paid to the company by the customers and the transfer price applied by the company to the master distributor".
20. On perusal of Appendix A of the master distributor agreement it reflects that the price of hardware of various models of the MPOS and POS have been provided by the Hongkong based company and it has very specially been provided that apart from the hardware price the licence fee for software for D series equipments of MPOS will be U.S. $ 45 per unit, for S series the licence fee was fixed at U.S. $ 60 per unit and for R series it was fixed at U.S. $ 40 per unit. This very fact indicates that the importing firm and its Executive Director were fully aware about the import value of the imported equipments. However, in a blatant violation of the customs provisions and with sole motive of evading customs duty they chose to mis-declare the import price of the consignment of MPOS which sometimes was as low as U.S. $ 0.25 per unit. We are in agreement with the finding in the impugned order-in-original that since the import prices declared by the appellant - importer are not the actual transaction value of the import consignments and the value declared in the Bills of Entry was on the basis of forged/fake invoices, the same needed to be rejected as per the provisions of 31 CUS/52445 of 2018 Rule 12 readwith Rule 4 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and readwith Section 14 of the Customs Act, 1962. It is also an admitted fact that the Mobile Point of Sale (MPOS) device and Point of Sale (POS) device imported by the importer - appellant needed a certification from the Bureau of Indian Standards. They also needed a No Objection Certificate from the WP&C Wing of Department of Tele-communication for their legitimate importation. These requirements have been circumvented by the importing company and its Executive Director by hatching a conspiracy with various other persons and therefore have violated the provisions of Customs Act, 1962 as well as provisions of Import Export Policy prevalent at the relevant time. The arguments advanced by Ms. Latha Priyadarshini and the company are not acceptable in the facts and circumstances as well as legally as per the provision of Section 46 of the Customs Act, 1962 of sub-Section (iv) the importer presenting the Bill of Entry is required to subscribe to a declaration as to the truth and contents of Bills of Entry. Since the declarations made by the importer - appellant and its director have been found grossly mis-declared on the counts of description, classification and value of the consignments. Ms. Latha Priyadarshini in her statement dated 19/01/2016 and other statement has admitted the facts of mis-declaration.
21. Thus, we do not find any illegality in the conclusions reached in the impugned order-in-original regarding confiscation of the import consignments, confiscation of customs duty and with regard to imposition of penalty under various Sections of the Customs Act on the appellant importer and its Director Mrs. Latha Priyadarshini.
22. Coming to the role of various Customs House Clearing Agents, we find it appropriate to mention before analyzing the role of individual CHA firms and persons, that every Customs House Agent plays a crucial role in ensuring compliance of 32 CUS/52445 of 2018 provisions of Customs Act as well as various other allied laws of the country with regard to import/export of goods. They are also required to advice and assist the importers and exporters so that correct compliance of the provisions of statutes as well as correct payment of customs duty is ensured. In the present case, we find that the customs house agents (clearing agents) have not done their work in the spirit in which they have been appointed to work as the Customs House Agents. We find that appellants M/s Chinta Haran Ojha - Customs House Agent and Shri Rakesh Kumar - G Card Holder of same firm have filed two Bills of Entries having No. 5994463 and 5994464 both dated 2 July 2014 and Bill of Entry No. 6221058 dated 24/07/2014 where the consignments of Mobile Point of Sale (MPOS) equipments of S-90 model have been mis-declared as GPRS + ID Bard Code Terminal. We also find that the consignment have also been mis- classified (as discussed in preceding para) and by resorting to mis-declaration and mis-classification of impugned goods, the provision pertaining registration and certification requirements from the Bureau of Indian Standards as well as the ETA from the WPC Wing of Department of Telecommunication have been bye- passed. We find that it is the duty of the Customs House Agents that wherever it is found that the description given in the invoice does not explain and facilitate the correct classification of the import consignment, Custom House Agent should ask for the product catalogue/treatment literature for reaching at the right classification of the import goods and also to ensure the compliance of provisions of other allied statutes such as Import Export Policy, Bureau of Indian Standards Act etc. We find a complacency on the part of the CHA to have made classification of the import consignment without getting the veracity of the nature of the import goods verified from the technical literature etc. and to resort to a classification which resulted in evasion of the customs duty and violation of other provisions regarding compliance of Bureau of Indian Standards and WPC Wing of the Department of tele-communication as was the requirement under 33 CUS/52445 of 2018 Import Export Policy and therefore we agree with the findings of the Adjudicating Authority with regard to their role in rendering the import goods liable for confiscation and thereby attracting the penal provisions of Section 112 and Section 114AA of the Customs Act, 1962.
23. With regard to the appellant Shri Rajesh Kumar Maikhuri - Managing Director of M/s R.U. Imports Exports Pvt. Ltd. and M/s R.U. Imports Exports Pvt. Ltd., a Customs House Agent (CB firm), it is a matter of record that they have filed one Bill of Entry No. 7817932 dated 26 December 2014 wherein the description of the goods was given as D-200 Terminal (Mobile payment terminal dummy), sample and SP-30 terminal (Mobile payment terminal dummy). The classification of the goods have been done under Chapter 90230090 which covers instruments, apparatus and model designated for demonstration purposes or exhibition, education purpose and unsuitable for its other uses. It is matter of record that during course of examination of subject consignment, the goods were found as not dummy or samples but the same were fully functional MPOS. It is therefore clear that goods were classified by Shri Maikhuri and the importing firm without going into detail about their true nature by referring to the relevant catalogue or product literature and without any documentary evidences. The CHA classified the goods as of dummy nature for exhibition/demonstration purpose to evade customs duty and other provisions of import-export policy. It has also come out from the investigations that the CHA firm and its Director have not interacted with the importer while taking the work of clearance work of the import consignment but all the documents such as invoice, airway bill etc. were taken from Shri Rajinder Madhok and thus have not shown due diligence in undertaking the work of clearance and have become part of the conspiracy to get the MPOS devices cleared without following the due requirements of Customs Act and Import-export policy. The investigation has also revealed that the clearing agent has filed 34 CUS/52445 of 2018 the bill of entry showing the name of supplier as M/s VXCESS Solutions on the basis of some high-sea sale agreement though the invoice covering the import consignment was from M/s Pax Technology Ltd., Hongkong to M/s Pax Technology Pvt. Ltd., India and no local invoice was presented to him after entering into the high-sea sale agreement between Pax Technologies Pvt. Ltd., India and M/s VXCESS Solutions. It has also emerged that when certain objections were raised by the customs officer at the time of clearance of the goods, the importer - appellant has given an undertaking to export back the goods after demonstration however the undertaking was never honoured and CHA was fully aware that the undertaking was being given only to get the clearance of the import consignment these omissions and commissions on the part of the CHA and its Director convince us that no due diligence has been exercised while classifying the goods and entering other details at the time of the import of the consignment. In view of these facts, we agree with the findings of the Original Adjudicating Authority and refrain from interfering with the same.
24. Coming to the appeals filed by the appellant Shri Kishan Singh Dhapa, Shri Rajender Prasad and M/s Exim Cargo Services
- Customs House Agent (Customs broker), the records indicate that Shri Kishan Singh Dhapa is working as a Proprietor of CHA firm namely M/s Exim Cargo Services having F Card No. 169/96 issued by the Customs House and Shri Rajender Prasad has been working as a G Card Holder for this CHA firm namely M/s Exim Cargo Services. The CHA firm and its Executive namely Shri Kishan Singh Dhapa and Shri Rajender Prasad has filed following 4 Bills of Entries for clearance of MPOS on behalf of the main appellant namely M/s Pax Technologies Pvt. Ltd. The details of the description of the import consignment, their classification and per unit price, as declared in the respective Bills of Entries are given here below :-
35 CUS/52445 of 2018 S. B/E No. B/E % of Description Chapter Qty. Decla Name of No. Date exam of goods as Heading Impor red CHA/ CB prescribed per B/E as per B/E ted value (M/s) (USD) per unit
1. 2094937 31/07/ RMS S-90 48237090 200 8.5 Exim 2015 Cargo Service
2. 2121203 03/08/ RMS Paper Roll 48237090 1000 .25 Exim 2015 Rolls Cargo D-180 48237090 Service MPOS 1000 2.25 Terminal Rolls (Parts of payment Debit/ Credit Device)
3. 2763917 30/09/ RMS Paper Roll 48237090 80 .25 Exim 2015 Cargo Barcode 48237090 40 8.25 Service Reader S-90
4. 3346966 23/11/ RMS Paper for 48237090 50 .42 Exim 2015 printing in Cargo payment Service Debit/ Credit device D-180 48237090 42 4.5 Terminal (Part of payment Debit/ Credit Device)
25. A glance at the details given above, makes a revelation of the extent of the mis-declaration which have been resorted to by the importer and its clearing agent M/s Exim Cargo. We are at pains to note that a sophisticated electronic equipments such as Mobile Point of Sale (MPOS) are being described only as S-90, paper rolls, D-180 (parts of payment debit/credit device), bar code reader etc. and has been classified under Customs Tariff Heading 48237090 which pertains to "other paper/paper board"
cellulose wedding and webs of cellulose fibers, cut to size for sale, other articles of paper pulp, paper, paper board etc." It appears from the description given for clearance of consignment of the MPOS equipments declaring them as the products of the paper by the importer, its Executive Director, and especially the clearing agent namely M/s Exim Cargo Services and its Executive Shri Kishan Singh Dhapa and Shri Rajender Prasad that they have blatantly made mockery of customs provisions. As stated in 36 CUS/52445 of 2018 the preceding paras that it is a sacred duty of clearing agent to ensure compliance of the provisions of customs law and advice the importer for correct compliance of Customs Act as well as other Allied Acts and their provisions while undertaking clearance of the import cargo. However here we find that in utter disregard to the provisions of the relevant statues the description, classification thereof and valuation has been done as per their own whims and fancies. For example for the Bill of Entry No. 209437 dated 31 July 2015, the only description of the goods in the Bill of Entry has been given as S-90 classifying the same under Chapter sub-Heading 48237090 of the Customs Tariff Act, 1986. It is beyond our imagination that any prudent person can decide the classification of an imported item only on the description as "S-90". This clearly indicates that the clearing firm and its proprietor Shri Kishan Singh Dhapa and G Card Holder Shri Rajender Prasad have acted with ulterior motives and have misclassified the sophisticated electronic equipments, such as, MPOS under the product classification of the paper and paper products and the value of such sophisticated items has surprisingly been mis-declared as low as U.S. $ 0.25 per unit under Bill of Entry No. 2121203 dated 03/08/2015. This could not have been done without CHA firms and its workers being part of a conspiracy to evade the customs duty but also to circumvent the provisions of the Export Import Policy which included the BIS and WP&C certification.
26. We are in full agreement with the findings of the Original Adjudicating Authority and, therefore, uphold the imposition of penalty under various sections of the Customs Act on CHA firm M/s Exim Cargo services, Shri Kishan Singh Dhapa and Rajindra Prasad. We also recommend to the Commissioner of Customs (Licencing Authority) to take appropriate action against all the three above-mentioned appellants under the Customs Broker Licence Regulations.
37 CUS/52445 of 2018
27. Coming to the appellants Shri Rajiv Kumar Sharma, Shri Hari Kishan, Shri Kamal Nath Roy and M/s Rubal Logistics Pvt. Ltd. - Customs House Agent (Customs broker), it is a matter of record that M/s Rubal Logistics Pvt. Ltd. has filed a Bill of Entry No. 3239991 dated 13 November 2015 wherein the description of the goods has been declared as D-180 (D-180 pinpad is used to connect with the laptop to do the transaction - connectivity via USB port only). The value of the goods has been declared as U.S. $ 15 per unit. The investigations revealed that under the Bill of Entry No. 3239991 dated 13 November 2015 a consignment of D-180 MPOS was imported by the importer - appellant and the description of the same has been mis-declared as „pinpad used to connect with the laptop‟ via USB port and the transaction value has also been suppressed to a large extent. Here also, we find that the clearing agent had not taken any pain in verifying the true nature of the import item by asking for any catalogue or technical literature. The goods have been mis-classified under Chapter 84702900 in utter disregard to the provisions of the Customs Tariff Act. In the clearance of this particular consignment we find that the clearing agent never interacted directly with the importer, but accepted the import document from one freight forwarder namely Shri Kuldeep Singh of M/s VSG Shipping and Logistics Pvt. Ltd. Here also we find that the clearing agent and his executives/workers, namely G Card Holder has not bothered to see the catalogue of the imported goods for reaching at the correct classification and to determine whether the requirement of BIS and WPC were needed or not. They have just gone and filed the Bill of Entry on the basis of documents provided by Shri Kuldeep Singh which had resulted in mis- declaring, misclassifying the description and value and thereby becoming instrumental in evasion of customs duty and in circumventing the provisions of the Import Export Policy with regard to requirement of the BIS and WPC certification. We find that the order-in-original has brought out their role very specifically and the conclusion reached by the Adjudicating 38 CUS/52445 of 2018 Authority does not suffer from illegality. Therefore, it is not necessary to interfere with the findings of the Authority.
28. Now, coming to the appellant namely Shri Kamal Kumar Sukhramani and M/s Prompt Air & Sea Cargo Pvt. Ltd. a Customs House Agent (Customs broker), we find that following two Bills of Entries have been filed by appellant M/s Prompt Air & Sea Cargo Pvt. Ltd. :-
S. B/E No. B/E % of Description Chapter Qty. Decla Name of No. Date exam of goods as Heading Impor red CHA/ CB prescribed per B/E as per B/E ted value (M/s) (USD) per unit
11. 3526607 09/12/ RMS Paper for 48237090 1000 .25 Prompt 2015 printing in Rolls Air & Sea payment Cargo Debit/ Pvt. Ltd.
Credit Device D-180 48237090 2000 1.5 Terminal pcs.
(Part of
payment
Debit/
Credit
Device)
12. 3650483 19/12/ RMS Paper for 48237090 1000 .23 Prompt
2015 printing in Rolls Air & Sea
payment Cargo
Debit/ Pvt. Ltd.
Credit
Device
D-180 48237090 4600 1.45
Terminal pcs.
(Part of
payment
Debit/
Credit
Device)
29. A perusal of the above-mentioned details makes an interesting revelation that the D-180 Model of Mobile Point of Sale (MPOS) equipment has been classified as a product of paper by classifying the same under sub-heading 48237090 of the Customs Tariff Act and declaring the value as U.S. $ 1.5 per unit and U.S. $ 1.45 per unit. We are of the opinion that this has been done deliberately for uterior motives. The facts here are also same that the Customs House Agent and its Executive Shri Kamal Kumar Sukhramani had filed the Bills of Entry without referring to the necessary product catalogue and technical literature. It has also been admitted by Shri Kamal Kumar Sukhramani, a F Card 39 CUS/52445 of 2018 Holder of Customs Clearing firm M/s Prompt Air & Sea Cargo Pvt. Ltd., in his statement dated 26 February 2016 that he has not referred to any catalogue or produced literature and he never met the importer and filed the Bill of Entry on the basis of documents handed over to him by Shri Randhir Singh. We find that the classification and valuation of the products have been mis-declared blatantly by the importer in connivance with the CHA firm namely M/s Prompt Air & Sea Cargo Pvt. Ltd. and its Executive Shri Kamal Kumar Sukhramani. It pains to note that sophisticated electronic goods namely MPOS equipment have been declared as a product of paper and the value declared is low as U.S. $ 1.5 per unit with utter disregard to the provisions of the Customs law. We are not impressed with the arguments advanced for taking a lenient view in this matter. We feel that CHA and its executive Shri K.K. Sukhramani knowingly have connived with the importer and its Director for resorting to such mis-declaration of description and value of the import consignments of MPOS and have thus evaded customs duty and violated the provisions of Allied Acts. Here also, we are in agreement with the findings of the learned Adjudicating Authority and refrain from interfering with the same.
30. Now coming to appeals filed by Shri Rajinder Madhok - Consultant, Shri Kuldeep Singh and Shri Sushil Kumar Mishra, it is an admitted fact that Shri Rajinder Madhok worked as a consultant on the issues pertaining to special valuation branch. He was fully aware that the goods were being imported by the importer - appellant from their related firm based in Hongkong and only for the monetary gains he had advised Ms. Latha Priyadarshini as to how to circumvent the provisions of Customs and Allied Acts with regard to Bill of Entry No. 7817932 dated 26/12/2014. He played a crucial role in mis-declaring the goods as the dummy equipments just to bye-pass the provisions of certification required under BIS and WPC. Thus here also, we do not find any legal infirmity in the findings of the Adjudicating 40 CUS/52445 of 2018 Authority. So far as the appellant Shri Kuldeep Singh Director of M/s VSG Shipping and Logistics Pvt. Ltd. with regard to Bill of Entry No. 3239991 dated 13 November 2015, he arranged clearance of the consignment through CHA M/s Rubal Logistics Pvt. Ltd. and Shri Rajeev Sharma where he was instrumental in providing two sets of invoices for the same consignment to the clearing agent and ensured the clearances of the consignment on behalf of importer - appellant by mis-declaring the value and without submitting the certification from BIS and WPC. The Adjudicating Authority has rightly found him liable for penalty and as per the provisions of the Customs Act under Section 112 and 114AA and we are in agreement with the findings of the Adjudicating Authority also.
31. So far as the role of Shri Sushil Kumar Mishra is concerned, it is an admitted fact that he associated himself in creation of forged documents, such as, invoices etc. and was involved in arranging the clearance of the goods on the basis of the mis- declared facts. Shri Sushil Kumar Mishra in his statement dated 16 January 2016 has admitted that he was fully aware about lot of manipulations with regard to clearance of consignment of M/s Pax Technologies as generally the customs clearance agency charges are in the range of 2000 to 2500 per consignment, however, in case of M/s Pax Technology an amount of Rs. 60,000/- to Rs. 70,000/- was being paid to them. He was working in connivance with Shri Sanjay Kataria and one Shri Raju and all of them were forging invoice and other documents. The investigations have brought out the categorical role played by Shri Sushil Kumar Mishra that he was aware and participated in mis-declaration of description as well as the value of import consignment for and on behalf of the importer - appellant. We do not find any ground to take a lenient view so far as imposition of penalty on him under the provisions of Customs Act is concerned.
32. We have also considered the case laws cited by learned Counsels. We find that the case laws relied by the appellants may 41 CUS/52445 of 2018 be having some relevance in normal cases of mis-declaration where either the importer has made an inadvertent mistake in providing description and classification of the product under import or where the clearing agent in such mis-declarations in not found involved. In the facts and circumstances of the case at hand, as it has come out in the preceding paras, that the importer - appellant and various clearing agent - appellants and persons were consciously part of the entire conspiracy of willful mis-declarations of the import consignments. These decisions would not help the appellant.
33. In view of the entire above discussions, we also find it appropriate to ask the Chief Commissioner of Customs to enquire about the systemic failure with regard to clearances of Mobile Point of Sale equipments under various Bills of Entry, as mentioned in the preceding paras. We find that the clearing agents were aware as to the description that was to be given to a consignment to avoid examination of the cargo from the Risk Management Module (RMS). We are also surprised to note that in some of the Bills of Entry, the Risk Management Module (RMS) gave examination of the package of the cargo, but still in these cases also the consignment were cleared in spite of the huge mis-declaration with regard to its description, classification as well as the value of imported items. This indicate that there exist a deep malaise in the system of examination and clearance of the cargo. We advice the Chief Commissioner to revisit the standard operating procedure in this regard to ensure that the system is enabled to take care of the instances where a blatant mis- declaration is avoided by the importers to bye-pass the Risk Management Module. We also direct the Chief Commissioner of Customs to consider whether it should be necessary to cause a vigilance enquiry to determine how the consignments were cleared when there were so many mis-declaration in description as well as classification of the imported Mobile Point of Sale equipments.
42 CUS/52445 of 2018
34. In view of the entire above discussions, there is no infirmity in the order-in-original. Accordingly, all the appeals are dismissed.
(Order pronounced in open court on 12/03/2020) (Justice Dilip Gupta) President (C.L. Mahar) Member (Technical) PK