The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed the revocation of customs broker license and held that there was no evidence against customs broker to prove misdeclaration except retracted statement.
The bench of Dr. Rachna Gupta (Judicial) and Hemambika R. Priya (Technical Member) has observed that there is also no evidence on record to prove that Areca nuts were being imported from Indonesia and black peppers were being imported from Vietnam. In absence of any such documentary evidence the document issued by the Sri Lankan Government (Certificate of Origin) is wrongly doubted by the department. The sole statement of appellant himself alleging it to be his confession has wrongly been used against him while penalizing him.
The respondent commissioner received information from the Assistant Commissioner, Customs Broker Section that a case of fraudulent import of Areca Nuts and Black Peppers by mis- declaring the same as of Sri Lankan origin had been booked against one Mr. Sarfaraz Khan Pathan of Ahmedabad and other three importers, namely, M/s. R.M. International, M/s. T.G. Enterprise & M/s. M.M. Enterprise of Ahmedabad.
They had misdeclared, allegedly in connivance, the Areca Nuts and Black Pepper of Indonesian and Vietnam origin, respectively as of Sri Lankan origin thereby misusing Indo Sri Lanka Free Trade Agreement (ISFTA) & South Asian Free Trade Area (SAFTA) agreement. Shri Vinod Kumar Sharma, Custom House Broker of M/s V. S. Bhagwati Shipping, who got cleared the goods from Customs at Nhava Sheva port is also alleged to have connived with the said three importers and Mr. Sarfaraz Khan in wrong availment of the benefit of ISFTA & SAFTA agreements with a view to circumvent payment of duty at appropriate rate.
The live consignments of Areca Nuts and Black peppers were lying at Nhava Sheva being cleared by M/s V S Bhagwati, the appellant as Custom Broker/ Custom House Agent and were seized on 13.11.2017. Those were 7 in number as per the details provided by Sarfaraz Khan.
The matter was further investigated and it was revealed that Indian importers, other than above three, have also adopted similar modus operandi, which resulted in loss of Customs duty to the tune of crores of rupees. The importers in India along with de facto owners have admitted their offence stating that the Areca Nuts and Black Peppers imported into India from Indonesia and Vietnam respectively but by wrongly showing them as of Sri Lanka origin.
The appellant CB attended inquiry proceedings before the Inquiry Officer, requested for documents based on which the SCN was issued to the appellant and also sought cross examination of persons whose statements are relied upon in the SCN. The Inquiry Officer after hearing the appellants, submitted an inquiry report. The Inquiry Report confirmed the alleged violation of the CBLR 2013/2018 as alleged in the SCN.
Thereafter appellant CB participated in the adjudication proceedings under CBLR 2013/2018 as conducted by the Commissioner (Airport & General) and reiterated request for documents and cross examination.
However, the Commissioner while agreeing with the recommendations/findings of the Inquiry Officer and while denying the opportunity of cross-examination revoked the License of the appellant CB, imposed a penalty of Rs.50,000 and forfeited the security amount.
The CESTAT held the Customs Broker has not failed in discharging his responsibilities under Regulation 10(n). The order is not correct in concluding that the Customs Broker has violated Regulation 10(n).
The tribunal stated that the adjudicating authority, while doing so, has acted in gross violation of Article 21 of the Constitution of India.
Case Details
Case Title: M/s. V S Bhagwati Shipping Versus Commissioner of Customs
Case No.: Customs Appeal No. 51930 of 2022 [DB]
Date: 24.01.2025
Counsel For Petitioner: G.S. Arora and Shri Ashirwad
Counsel For Respondent: Shiv Shankar
