PN 73/2023 IN FORCE SEZ / EOU / FTWZ ·?

OIO No. 47/CAC/PCC(G)/SJ/CBS Adj Dated: 10.11.2023 with respect to M/s Dipak H Shah (11/610)

Reliability

In force — no superseding record on file.

Document text

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----- Start of picture text ----- = TETRA, AARoh (AMT) aT BraTeTT @ } OFFICE OF THE PRINCIPAL COMMISSIONER OF CUSTOMS (GENERAL), NEW CUSTOM HOUSE, BALLARD ESTATE, MUMBAI ~ 400 001. aaa F /.F. No.- GEN/CB/559/2022- CBS Mew ealeH/Date of Order: 10.11.2023 CAO No. 47/CAC/PCC(G)/SJ/CBS-Adj SINT feats/ Date of issue: 10.11.2023 ----- End of picture text -----

DIN: 20231177000000999C2E

GERI AMT: = -Aeilet Ster Issued By : Sunil Jain WaT Het, AAR H(A) Pr. Commissioner of Customs(Gen.), Hay -400 001 Mumbai - 400 001,

ORDER-IN-ORIGINAL [el weet

tara_difert/N.B. : 1, ae vic Se cafes apt fearsit syater ta Frees vert Hr one B, fare ae orer Hr a Ver FI This copy is granted free of charge for the private use of the person to whom it is issued. 2. sa Hee & fasatr site Abel ae weil H 7.5% H Heras W SARs aera, 1962 aT UT 129A(1B)(i)& Maer Aree, Herr sce ow va Hare ait Hac A edtenet é, wel ea a ew wa qatar faaride et, ar aan, set fat gate a feariea etiae arte sa ew & awe Fy ana & dia Aelet S Hex qrat HT sree] ae ae Aes,Ses See em Us Raret aia Hac (wRifete) fraaraci, eece, wet a seria, aaawetia A ederrd $1

An appeal against this order lies with the Customs, Central Excise and Service Tax Appellate Tribunal in terms of section 129A(1B)(i) of the Customs Act, 1962 on payment of 7.5% of the amount demanded where duty or duty and penalty are in dispute, or penalty, where penalty alone is in dispute. It shall be filed within three months from the date of communication of this order. The appeal lies with the appropriate bench of the Customs, Central Excise and Service Tax Appellate as per the applicable provisions of Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982.

s with the appropriate bench of the Customs, Central Excise and Service Tax Appellate as per the applicable provisions of Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982.

3, ae dfea Pear star @ AT se ander & seret A are éears Poteet after ar afer aa waa gat * aik demyes, t¢ra seme wer wd daar ate after, tRaa amt ages, & M/s Knowledge Infrastructure Systems Pvt. Ltd. & Others vs ADG, DRI, Mumbai & dad omit ameer mata A/86617-86619/2018 fare 31.05.2018 & HaaR TAH Hee aals wer ear fect after? functus officio’aat Sat & It is informed that the jurisdiction of the Adjudicating Authority stands alienated with the conclusion of the present adjudication order and the Adjudicating Authority attains the status of ‘/unctus officid as held by Hon’ble CESTAT, Mumbai in its decision in the case of M/s Knowledge Infrastructure Systems Pvt. Ltd. & Others vs ADG, DRI, Mumbai vide Order No. A/8661786619/2018 dated 31.05.2018. 4. afk wa @& yao a adit cere & faeces as aor gait ates aerate seer aa fear ara # at vets veer A Herr arte areae AY STI In case where an order is passed by bunching several show cause notices on an identical issue against the same party, separate appeal may be filed in each case.

we Hite PIF CA-3A arax Fr Set afer ait fr atarereh (artes) feraaracht, ez faa 6 & aed rtika & va set fanaa & faa 3 suftaa 2A secfea cafta cant Reaeihta va Beata Fr srestil

filed in each case.

we Hite PIF CA-3A arax Fr Set afer ait fr atarereh (artes) feraaracht, ez faa 6 & aed rtika & va set fanaa & faa 3 suftaa 2A secfea cafta cant Reaeihta va Beata Fr srestil

The Appeal should be filed in Form C.A.-3 prescribed under Rule 6 of the Customs (Appeals) Rules, 1982 and shall be signed and verified by the person specified in sub-rule 2 of rule 3 rules ibid.

(i) afe wicrarige areer, forse fewer artrer Fr ag ¢, A ee wa AY Ae eqreeae Aart Fr WR F. We ART a se S HA Sle? ¥. 1000/-, (liye ae We ¥. sea ore H Hers a fq vara ara & afte a eel ¥. 5000/- ve (ili) aie ag UR &. gare are A Hs eat F. 10000/-& ew ar saratet wics dem sre & Aaa S arearey Fy Ustio & vers sols H get 4 fart Ba wt weds Pera 2, & fed sf wd wa de ff oven A fear ae wa ais are aia & are Bara fear are

A fee of (i) Rs. 1000/- in case where the amount of duty and interest demanded and the penalty imposed in the impugned order appealed against is Rupees Five Lakhs or less, (ii) Rs. 5000/- in case where such amount exceeds Rupees Five Lakhs but not exceeding Rupees Fifty Lakhs and {iii) Rs. 10000/- in case where such amount exceeds Rupees Fifty Lakhs, is required to be paid through a crossed bank draft in favour of the Assistant registrar of the Bench of the Tribunal on a branch of any nationalized bank located at the place where the bench is situated and demand draft shall be attached to the Appeal.

ater Ht we ofa A ae Hr nile, 1870 Hr arta AE 6 AH aed fauita ¥. 50 aT qe i <teq am den aiee wd sae are save sa sree a1 sea via A 50 ar ae HY Sera AT slat TET!

shall be attached to the Appeal.

ater Ht we ofa A ae Hr nile, 1870 Hr arta AE 6 AH aed fauita ¥. 50 aT qe i <teq am den aiee wd sae are save sa sree a1 sea via A 50 ar ae HY Sera AT slat TET!

Once copy of the Appeal should bear a Court Fee Stamp of Rs. 50 and said copy of this order attached therein should bear a Court Fee Stamp of Rs. 50 as prescribed under Schedule item 6 of the Court Fee Act, 1870, as amended.

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BRIEF FACTS OF THE CASE

M/s. Dipak H Shah (PAN: AAFPS2538G), having address registered at 5 Mahinder Chamber, Gr. Floor, Duke's Factory, WT Patil Marg, Chembur, Mumbai-400-07 1(hereinafter referred as the Customs Broker/CB) holder of Customs Broker License No. 11/610, issued by the Commissioner of Customs, Mumbai under regulations of CHALR, 1984, [Now regulation 7(2) of CBLR, 2018] and as such they are bound by the regulations and conditions stipulated therein.

An offence report in the form of SCN No. 11/ADC/ADJ(X)/ 2022-23 dated 03.11.2022 was received in the CBS, NCH from SIIB(X)/ACC, Sahar, Mumbai wherein, it was informed that on the basis of specific information received by the DRI, MZU, Mumbai investigation was conducted. Investigation revealed that various export firms including M/s Doshi Impex was procuring fake purchase bills against the export consignments from one Mr. Suhel Ansari, through fake firms floated by him. Searches were conducted at the premises of Suhel Ansari, which led to the recovery of copies of bogus bills in the names of several companies issued by him.
The office premises from where Shri Suhel Ansari was operating, situated at Room No. 30, 4th Floor, Chunnwala Building, 38-Kolsa Street, Pydhonic, Mumbai —- 400003 was searched on 14.08.2015. During the course of search of the said premises, certain records/documents, three laptops and one hard disk and various rubber stamps were recovered.

, Mumbai —- 400003 was searched on 14.08.2015. During the course of search of the said premises, certain records/documents, three laptops and one hard disk and various rubber stamps were recovered.

During the course of investigation statement of Shri Suhel Parvez Ansari and Shri Shaikh Mohammed Arshad employee of Shri Suhel Parvez Ansari was recorded on 24.08.2015 by DRI, Mumbai where inter-alia they stated that they supplied fake invoices to the export firms including M/s Doshi Impex, Shri Shaikh Mohammed Arshad stated that there were about 22 firms in whose name fake invoices were issued.

DRI, MZU, Mumbai forwarded the case to the SIIB(X)/ACC, Mumbai for carrying out further investigation the details of exporters including M/s Doshi Impex who have claimed undue drawback by overvaluing the exports, whereas cheaper material is exported, and to justify the value of the goods, fake invoices from Shri Suhel Ansari, are procured showing the higher purchase price.
During the course of investigation, the statements of the following persons were recorded by the DRI, MZU, Mumbai:i. Shri Naresh Jayanti Lal Doshi Partner in M/s Doshi Impex in his statement recorded on 30.11.2017 & 07.03.2022 under Section 108 of the

owing persons were recorded by the DRI, MZU, Mumbai:i. Shri Naresh Jayanti Lal Doshi Partner in M/s Doshi Impex in his statement recorded on 30.11.2017 & 07.03.2022 under Section 108 of the

Customs Act, stated that he purchased the goods from local market through his suppliers, some invoices in the year 2012 & 2013, issued on the companies which were floated and /or controlled by Shri Suhel Ansari. But he don't know about the same; that he has not been registered with the VAT or Central Excise.; that he don't know Shri Suhel Ansari having address at Room No. 13-a, building No. 19/21, Hanif Building, 210, MA Road, Opp. Bori Masjid, Madanpura, Mumbai Central (East), Mumbai -400 008. He never met with Shri Suhel Ansari and that he had not transacted any business with any of the companies floated by Shri Suhel Ansari and that he had done 18 Shipping Bills through Air Cargo Complex in the year 2015 & 2016.

ii. Shri Nimish Dipak Shah, proprietor of M/s Dipak H Shah in his statement dated 19.10.2022 stated that M/s Dipak H. Shah is 35 years old firm and he was proprietor from 2005; that M/s Dipak H. Shah was appointed as Custom Broker in 2015 and they have submitted the authority letter for the same; that they contacted to M/s Doshi Impex from reference of another exporter; that M/s Dipak H.

H. Shah was appointed as Custom Broker in 2015 and they have submitted the authority letter for the same; that they contacted to M/s Doshi Impex from reference of another exporter; that M/s Dipak H. Shah verified office of M/s Doshi Impex, IE Code, PAN Card of M/s Doshi Impex and Adhaar Card of Shri Naresh Jayantilal Doshi partner in M/s Doshi Impex and they have submitted the KYC for the same; that the exporter directly used to provide the documents alike checklist and invoices; that after receiving documents employee of M/s Dipak H. Shah used to make checklist, and used to also take approval from the exporter M/s Doshi impex, then after approval M/s Dipak H. Shah used to file Shipping Bill on ICEGATE portal. Once Shipping Bill is generated, M/s Dipak H. Shah proceed to airline space for cargo booking; that M/s Dipak H. Shah filed only one Shipping Bill no. 7288736 dated 19.01.2015 for M/s Doshi impex; that M/s Dipak H. Shah used to take Invoice and Packing List and verify them for classification as per description in Invoice. It was scrutinized and verified by M/s Dipak H. Shah; that goods directly came to Air Cargo Complex by their transport and during examination of the goods, representatives of M/s Dipak H. Shah were present; that for documentation M/s Dipak H. Shah used to take the necessary documents such as invoice, packing list and they used to take all the approvals with respect to each and every checklist from M/s Doshi Impex. As far as cargo movement is consider the exporter was responsible to send the vehicle to the port; that M/s Dipak H. Shah charged Rs.

ls with respect to each and every checklist from M/s Doshi Impex. As far as cargo movement is consider the exporter was responsible to send the vehicle to the port; that M/s Dipak H. Shah charged Rs. 2500 for per Shipping Bill. The mode of payment is via cheque; that they found no discrepancy found in valuation of goods covered under Shipping Bills of M/s Doshi impex at the time of examination of the goods.

During the investigation, the details of exports made by the exporter M/s

Doshi Impex, were retrieved from the ICES System. During the period from 2012-2016, the exporter made total exports of 18 Shipping Bills and availed total drawback of Rs. 9.49 lakh by way of overvaluation. The CB M/s Dipak H Shah had cleared one Shipping Bill of the said exporter.

During the investigation DRI, MZU, Mumbai enquired with the Consulate General of India, Dubai, UAE who vide letter dated 08.03.2018 reported that from the scrutiny of the documents provided by Federal Customs Authority, Dubai it emerged that goods had been cleared and unit values had been much lower than what has been declared to Indian Customs. As per DRI, MZU, Mumbai the instant exporter has also adopted the similar modus-operandi.

t goods had been cleared and unit values had been much lower than what has been declared to Indian Customs. As per DRI, MZU, Mumbai the instant exporter has also adopted the similar modus-operandi.

During investigation a statement dated 01.07.2016 of Shri Suryabhan Eknath Dhurphate, Proprietor of M/s. Sanket Overseas, Navi Mumbai, was recorded before the DRI, MZU, who was logistics provider and was involved in clearing the consignments through CHA, M/s. Indo Foreign Agents. From the perusal of his statement, it was disclosed that usually the cost and expenses incurred on the export material was only around 35% of the drawback amount. He also stated that the benefits availed by them and the exporter was to the extent of 65%. This was the modus operandi which was adopted by all such exporters including this exporter, who were exporting the goods on the basis of fake supplier’s invoice.

10, Further from the investigation It appears from investigation that goods were procured from Domestic Tariff Area (DTA) without any invoices so no details of its manufacturing, production, using imported material or excisable material therein were available so it could not be ascertained whether any duties have been paid or otherwise. During investigation exporter could not produce any such details in respect of manufacturing, production or use of any imported material in impugned export goods, though he was having enough opportunity as he presented himself for recording of his statement but he failed to produce any such details.

ion or use of any imported material in impugned export goods, though he was having enough opportunity as he presented himself for recording of his statement but he failed to produce any such details. Therefore, it appears from investigation that necessary ingredient of second proviso to Rule 3 (1) Drawback Rule, 1995 is attracted in this case which does not permit any amount of drawback in such cases where no duty has been paid.

“l) Drawback Rule, 1995 is attracted in this case which does not permit any amount of drawback in such cases where no duty has been paid. Rule 3 of the Drawback Rules 1995 reads as under; "Rule 3. Drawback — (1) Subject to provisions of—

Provided further that no drawback shall be allowed: -

(ti) if the said goods are produced or manufactured, using imported materials or excisable materials in respect of which duties have not been paid.”

From the investigations made by DRI, MZU, Mumbai and the investigations conducted by SIIB(X), ACC, Mumbai following appears:

xcisable materials in respect of which duties have not been paid.”

From the investigations made by DRI, MZU, Mumbai and the investigations conducted by SIIB(X), ACC, Mumbai following appears:

e The claim of the exporter that he does not know Shri Sohail Ansari appears to be false as in his bank statement of Corporation Bank the transaction made between M/s Doshi Impex and other fake business i.e M/s Alaska Trading co., M/s Combo Traders Pvt. Ltd., M/s Caddilac Tradelinks pvt. Ltd and M/s Mahavir Enterprises were reflected, that proves that exporter had procured the goods from unregistered shops and no appropriate duty viz. VAT was paid on goods. In the statement of Shri Suhel Ansari he stated that he got the bills printed in the name of M/s. Ruby Trading Co., M/s Alaska Trading co., Mis Combo Traders Pyt. Ltd., M/s Caddilac Tradelinks pvt. Ltd and M/s Mahavir Enterprises. etc. for which the bills were raised by him to give to: the exporters and bank accounts were opened by him. Thus, it appears that the exporter has exported the goods on fake and bogus invoices by way of over valuation and further claimed and availed excess drawback amount fraudulently.
e Goods of inferior quality were procured from local market without any Invoice.
e Incorrect transactions were made with the fake suppliers, whose invoices were raised by Sh Suhel Ansari. This was done to conceal the actual transactions and give cover to the bogus transactions.

e Incorrect transactions were made with the fake suppliers, whose invoices were raised by Sh Suhel Ansari. This was done to conceal the actual transactions and give cover to the bogus transactions.

e As export goods were procured from local market which was of inferior quality and having low value, therefore impugned export by M/s Doshi Impex was grossly overvalued and only done for purpose of fraudulent claim of drawback.
e The exporter has not produced VAT return that shows that proper duty has not been paid to the government. Therefore, it appears that the invoices which have been produced by exporter were not genuine.

From the investigation it appears that it is unlikely that CB M/s Dipak H Shah has been receiving goods based on fictitious bills and he was not aware. Had the CB seen these documents relating to meeting the criteria to

claim both types of Drawback and checked the correctness of relevant declaration, such fraudulent export could not have possible. In view of the above facts, it is evident that the CB was working in a seriously negligent manner and was in violation of the obligations casted upon them under the CBLR 2018. By their acts of omission and commission it appears that the said CB has violated Regulation 10(d), 10(e) & 10(f) of the Customs Brokers Licensing Regulations, 2018 and rendered himself for penal action under Regulations 14, 17 & 18 of CBLR, 2018.

Legal Provision of the CBLR, 2018:-

Regulation 10 (d) of the CBLR, 2018:- “A Customs broker shall advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be;”

Regulation 10 (e) of the CBLR, 2018:- “A Customs broker shall exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage;”

Regulation 10 (f) of the CBLR, 2018: " A Customs broker shall not withhold information contained in any order, instruction or public notice relating to clearance of cargo or baggage issued by the Customs authorities, as the case may be, from a client who ts entitled to such information;"

SHOW CAUSE NOTICE: M/s. Dipak H Shah (11/610) was issued a Show Cause Notice (SCN) No. 52/2022-23 dated 21.03.2023 by the Principal Commissioner of Customs (General), NCH, Mumbai, Zone-I asking them to show cause as to why the licence bearing no. 11/610 issued to them should not be revoked and security deposited should not be forfeited and/or penalty should not be imposed upon them under Regulation 14 read with 17 & 18 of the CBLR, 2018 for their failure to comply with the provisions of CBLR, 2018 as elaborated in the Show Cause Notice. They were directed to appear for a personal hearing and to produce proof of evidence/documents if any, in their defense to Shri Fredrick F.

sions of CBLR, 2018 as elaborated in the Show Cause Notice. They were directed to appear for a personal hearing and to produce proof of evidence/documents if any, in their defense to Shri Fredrick F. Nazareth, Asst. Commissioner of Customs who was appointed an inquiry officer to conduct inquiry under regulation 17 of CBLR, 2018.

SUSPENSION / REVOCATION OF LICENSE: In another case, the License of the CB M/s. Dipak H Shah (11/610) was suspended vide order no. 52/2012 dated 15.11.2012 and suspension was continued vide order no. 55/2012 dated 04.12.2012. Aggrieved by the order no. 55/2012 dated 04.12.2012, CB

filed appeal before the CESTAT, Mumbai. CESTAT, Mumbai vide Order No. $/453/13/CSTB/C-I//A/558/13/CSTB/C-I dated 19.04.2013 set aside the impugned order and revoked the suspension order passed by the Commissioner of Customs(G). The CB Licence was restored vide notice dated 09.05.2013. Further, the CB Licence was revoked vide Order-in-Original CAO No, 12/CAC/CC(G)/SRP/CBS(Admn) dated 16.02.2015 passed by Commissioner of Customs(G), NCH, Mumbai and forfeited entire security Deposit. The CB filed an appeal in the CESTAT vide appeal no. C/85767/15Mum DATED 26.05.2015, and is pending before the Hon’ble CESTAT, Mumbai,

15. INQUIRY REPORT

Inquiry Officer submitted Inquiry Report dated 28.08.2023, wherein, the charges against CB M/s. Dipak H Shah (11/610) i.e. violation of Regulation 10(d), 10(e) and 10(f) of CBLR, 2018 were held as ‘Proved’. 15.2 CB’s WRITTEN SUBMISSION :- IO submitted that Sh. Nimish D. Shah proprieter of M/s Dipak H. Shah (CB No.11/610) appeared for personal hearing on 16.06.2023. He has made his written submission vide letter dated 13.06.2023 made to the Principal Commissioner of Customs(G), New Custom House, Mumbai-I and has reiterated the contents therein. 15.2.1 IO submitted that CB in his written submissions on 16.06.2023 vide letter dated 13.06.2023, has submitted the following:

i. CB submitted that the entire contents, events, discussions, transactions and dealings reflecting in the said Show Cause Notice pertains to dealings and wrongdoings by other parties/entities and therefore, the said Show Cause Notice do not bear any legal standings against him prima facie and as such deserve to be quashed against him in toto.

gs and wrongdoings by other parties/entities and therefore, the said Show Cause Notice do not bear any legal standings against him prima facie and as such deserve to be quashed against him in toto.

ii. The CB submitted that the said Show Cause Notice state that the entire case if against M/S. Doshi Impex and Suhel Parvez Ansari engaged in bogus exports. Upon search and investigation, it is ultimately Customs departments case that fraudulently duty drawback availment by M/S Doshi Impex. CB submitted that he had no role in the entire fraud. iii, CB further submitted that searches were conducted by the DRI, Mumbai Zonal Unit in office premises of Lorgan Lifestyle P Ltd. and others. During such course search incriminating documents were found at their premises and at related parties premises. However, there is no piece of paper found showcasing that his CB firm was involved in the same. He submitted that he do not wish to comment on the conspiracy undertaken by these parties but be assured that he was never party to such conspiracy. iv. CB submitted that there are several statements recorded during the

t wish to comment on the conspiracy undertaken by these parties but be assured that he was never party to such conspiracy. iv. CB submitted that there are several statements recorded during the

course of investigation but there cannot be one statement showcasing any role of their firm apart from they being merely a CHA and carrying out their services based on the information provided to them . v. CB again reiterated that they are a 35-year-old firm and a reputed one in the business. They have verified M/S Doshi Impex, its IEC Code, PAN Card, Aadhar Card of Naresh Jayantilal Doshi and he has even submitted the KYC for the same. The exporter directly provided the checklist documents and invoices and have further taken approval of exporter M/s Doshi Impex. vi. CB submitted that it be considerate that the Customs officers at all times have examined the goods and its valuation and thus, it cannot be casted upon the CHA now that it was the CHA’s duty of the same. It will be outside the role of CHA to go into investigation of each and every consignment so handled by the CHA. In any case, here the evident fraud or duty was casted upon the M/s. Doshi Impex and the penalty for the same cannot be shifted to their firm, at this juncture. vii. CB stated that CHA is merely an agent assisting in compliance for import/export. It is the business practice to seek assistance of CHA for such compliance, but it cannot, be said that the CHA was doing all such fraud so alleged as the exporter or on behalf of the export.

/export. It is the business practice to seek assistance of CHA for such compliance, but it cannot, be said that the CHA was doing all such fraud so alleged as the exporter or on behalf of the export. The fraud in any case cannot be imposed upon the CHA and in case on me for the wrongdoings of Doshi Impex,.

viii. CB submitted that the regulation requires for KYC of the client and have duly done the same but unfortunately, they cannot be in any position to ascertain that if any party is a fraud or is committing a fraud. In fact, that could only be found after due investigation which officers have carried out, One CHA can never have the powers or imagination to find out the same. ix. CB submitted that Show Cause Notice states that the real culprit were dealing with the CHA but it cannot be that the CHA is the real culprit. Just as the Custom Officers were eyewashed at the time of export, the CHA were eyewashed too. The CHA can never ever find out the real valuation or truth behind the fictitious bills. x. CB submitted that upon seeing documents and in this case, Purchase Bills were fictious but the same cannot be known to CHA without due investigation so required by the officers under the statute.

. CB submitted that upon seeing documents and in this case, Purchase Bills were fictious but the same cannot be known to CHA without due investigation so required by the officers under the statute.

xi. CB submitted that they deny all the allegations and insinuations contained in the said Show Cause Notice which are against them particularly as they have prima facie had absolutely had no role whatsoever in the entire transactions apart from them being CHA and thus, he submitted that he cannot be held liable or be called to violate the provisions of regulation 10(f) of the CBLR, 2018. xii. CB submitted that the allegations of adding and abetting does not even

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survive.

xiii. CB submitted that he cannot be held liable or be called to violate the provisions of regulation 10(f}| of the CBLR, 2018 merely because he was the CHA and further, being so there can be no case of as to hold him in violation for the same, that they rely upon the following judgements in support of their case: -

a. Ashok Babulal Sindhav- 2006 (203) ELT 333(CCA) b. P.D. Manirekar- 2007 (213) ELT 405 (T) xiv, CB also submitted that there is no case made out of the said Show Cause Notice. xv. CB submitted that the caption Show Cause Notice also does not specify the exact act done by him. Hence, he is not liable for any violation as alleged, against him.

f the said Show Cause Notice. xv. CB submitted that the caption Show Cause Notice also does not specify the exact act done by him. Hence, he is not liable for any violation as alleged, against him.

xvi. CB submitted that without prejudice to the above, as per the settled law abetment requires conscious knowledge. Such violations can be alleged only when the person concerned has aided or abetted the illegal export knowingly. In this connection CB rely upon the following judgements.

a. Kamal Kapoor- 2007 (216) E.L.T 21 (P & H) b. M. Naushad - 2007 (210) E.L.T. 464 (Tri. - Bang) ec. P. K. Abraham -1999 (114) E.L.T. 480 (Tribunal)

xvii. CB submitted that he had acted purely in the normal course and there is no allegation that he had gained anything over and above the normal charges. Hence, he had no idea about such discrepancy. Therefore, he is not liable for any violation of Regulation whatsoever.

xviii, CB further submitted that he had not violated any Regulation as he was not authorised to detect any discrepancy or verify the credentials genuineness of the exporter apart from its KYC. He said that he was engaged for clearance of the export goods as per the Clients authorization letter. xix. CB further submitted that he had diligently followed and discharged their duty as a CHA, He further said that he had given full co-operation to the department in the investigation. He said that all the documents available with him were handed over to the department voluntarily.

a CHA, He further said that he had given full co-operation to the department in the investigation. He said that all the documents available with him were handed over to the department voluntarily.

xx. CB submitted that he had performed his duty as the obligations imposed upon him under the CBLR, 2013. He had always discharged his duties in efficient manner. He further stated that he had no authority to verify the credentials / genuineness of the exporter. He said that there is no act of commission and omission on my part in attempt to fraudulently availment of drawback duty.

xxi. CB further submitted that all the allegations framed against him in said Show Cause Notice are false, devoid of truth. He said that submissions of

the Show Cause Notice itself supports his case that the work was performed in good faith and there is absolutely no mens-rea to commit any such violation as alleged in the Show Cause Notice.

xxii. CB submitted that he had carried out his responsibility with due care and have not abetted in anything as alleged against him. He said that he had not declared anything incorrect as alleged as he is not the wrongdoer in the present case but a victim in reality. In view of above, he said that he is in compliance with all the regulations and thus, he is not in violation of any provisions including 10(f) of the CBLR, 2018 and for the same reason, my license should not be revoked, forfeited or any penalty be imposed upon him for the same.

hus, he is not in violation of any provisions including 10(f) of the CBLR, 2018 and for the same reason, my license should not be revoked, forfeited or any penalty be imposed upon him for the same.

xxiii. CB requested that suffice time be given to be in advance to prepare for a personal hearing as 1 am ready and willing to attend the same to put before you the correct picture in the present case. xxiv. CB requested that in the circumstances, it is prayed that the proceedings against him be dropped."

15.2.2 [O submitted that on being asked whether he has any documentary evidence to substantiate his submission and claims made in his submissions, Sh. Nimish Shah has stated that he has records and documents to substantiate his claim but had not brought the same. Sh. Nimish D. Shah has requested a week's time to prepare a detailed submission along with documentary evidences to substantiate his claims that he has done his work as Custom Broker diligently. The Personal hearing is accordingly adjourned to 21.06.2023 to enable the CB to make a comprehensive submission along with documentary evidences in his favour. 15.2.3 Sh. Nimish D. Shah proprietor of M/s Dipak H. Shah (CB No. 11/610) appeared for personal hearing on 26.06.2023, Sh, Nimish Shah has made further submissions on 26.06.2023 vide letter dated 13.06.2023 in continuation with his earlier submissions of 16.06.2023.

1/610) appeared for personal hearing on 26.06.2023, Sh, Nimish Shah has made further submissions on 26.06.2023 vide letter dated 13.06.2023 in continuation with his earlier submissions of 16.06.2023. He has submitted along with his submissions, copies of KYC documents in respect of M/s Doshi Impex, Mumbai., Authority letter to handle export clearances of M/s Doshi Impex from ACC Sahar, Mumbai, Invoice and Packing list and Shipping Bill No. 7288786 dt 19.01.2015.

15.2.4 IO submitted that CB in his defence further submitted their reply on 96.06.2023 vide letter dated 13.06.2023, wherein, he reiterated his earlier submission made vide letter dated 13.06.2023 submitted on 16.06.2023, in addition to that CB also submitted the following: i. CB submitted that he came in contact with one Mr. Naresh Doshi is one of the partner of the, M/S Doshi Impex. This Naresh Doshi approached him for his services with regard to one export cargo of Doshi Impex.

ii. CB further submitted that once they were approached by Doshi Impex, as per circulars and regulations, they sought KYC documents of the Doshi Impex whereabouts of the Cargo and so on as required.

iii. CB submitted that he was in receipt of the KYC Documents then from Doshi Impex and thus, he verified documents like IEC CODE, PAN CARD of Doshi Impex, Aadhar Card of Naresh Doshi, etc. Further, they also went to the address i.e. the office of Doshi Impex and verified the address and original documents therein.

e IEC CODE, PAN CARD of Doshi Impex, Aadhar Card of Naresh Doshi, etc. Further, they also went to the address i.e. the office of Doshi Impex and verified the address and original documents therein.

iv. CBalso submitted that Naresh Doshi of the Doshi Impex then gave them a copy of all the KYC documents along with authority letter to M/S Dipak H Shah to do the needful for the export cargo shipment. v. CB submitted that he was in receipt of an email from Doshi Impex of Invoice and Packing List for filing document and preparing the Check List and subsequently, emailed them the same for their approval.

vi. CB further submitted that after receipt of exporters approval, they M/s Dipak H Shah uploaded the Check List for Shipping Bill numbers on the ICEGATE Portal and then once the Shipping Bill number was generated, they proceeded to airline space for booking of the Cargo space.

vii. CB also submitted that once the booking of airline for cargo was confirmed, they communicated the same to the Doshi Impex and Doshi Impex intern dispatched their cargo at the air cargo complex through their transport vehicle. Once the said Cargo was at the examination, our representative was present at the time of examination of the said Cargo. After thorough examination, no discrepancies were found in the valuation of the said Goods covered under the said Shipping Bill.

esentative was present at the time of examination of the said Cargo. After thorough examination, no discrepancies were found in the valuation of the said Goods covered under the said Shipping Bill.

viii. CB submitted that they received Tax Invoice and Packing List from Doshi Impex and verified the same for classification purpose as per the description declared therein the said invoice. They then scrutinized and verified the said invoice and Packing List and accordingly, a drawback was claimed by the M/S Doshi Impex through them.

ix. CB further submitted that kindly take note that they had handled only one Shipping Bill for clearance of export Cargo through AIR of Doshi Impex after taking due care and due diligence. CB said that they charged their fees of only Rs.2500/- to Doshi Impex for the said shipment. x. CB submitted that the above is the full and final statement from him and he had nothing more to say/reply.

15.2.5 10 submitted that on being asked CB had informed that before carting of goods to the ACC, they had in due course, received the Invoice and Packing List from the exporter i.e. M/s Doshi Impex, and after scrutinizing the eligibility of the goods for Drawback in terms of declared description of goods

they had prepared check list and sent it to the exporter for approval. Shipping Bill was then filed on the basis of approved check list and goods were called to the shed. The usual Customs procedures were then followed before the goods were exported.

ter for approval. Shipping Bill was then filed on the basis of approved check list and goods were called to the shed. The usual Customs procedures were then followed before the goods were exported.

IO further submitted that on being asked whether there was any separate or extra processes were carried out by them in respect of goods being exported under drawback as compared to the processes followed by them in respect of Free Shipping Bills, he informed that they would check the eligibility for drawback with respect to the declared goods with that in the Drawback schedule, and that they did not carry out any extra documentary checks. He also states that as the goods are ready made garments in this case and the same were not liable to Central Excise duty and hence there was no need to seek for ARE-] documents.

IO also submitted that CB further informed that the main Show Cause Notice has been since decided and that he would forward a copy of the same later by email. He also informed that he is no longer in the business of Customs Broker and is not operating this CB License as the same has already been revoked in 2015. In this context, he requested for an early closure of the issue. CB also stated that he has made a full and complete disclosure and that he has no further documents available in the case to submit.

15.3 COMMENTS OF THE INQUIRY OFFICER:[0 submitted that he had gone through the facts of the case, the reply to the show cause notice, the submissions during the hearings by the Customs Broker.

15.3.1 IO submitted that on the basis of specific information received by the DRI, MZU, Mumbai investigation was conducted. Investigation revealed that various export firms including M/s Doshi Impex was procuring fake purchase bills against the export consignments from one Mr. Suhel Ansari, through fake firms floated by him. Searches were conducted at the premises of Suhel Ansari, which led to the recovery of copies of bogus bills in the names of several companies issued by him. DRI, MZU, Mumbai forwarded to the SIIE3(X)/ACC for carrying out further investigation the details of exporters including M/s Doshi Impex who have claimed undue drawback by overvaluing the exports, whereas cheaper material is exported, and to justify the value of the goods, fake invoices from Shri Suhel Ansari, are procured showing the higher purchase price. From the investigation it appears that it is unlikely that CB M/s Dipak H Shah has been receiving goods based on fictions bills and he was not aware. Had the CB seen these documents relating to meeting the criteria to claim both types of Drawback and checked the correctness of relevant declaration, such fraudulent export could not have

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raudulent export could not have

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possible. Therefore, action against the said CB was initiated by this office as per the Regulation of CBLR, 2018.

15.3.2 IO further submitted that it is alleged in the show cause Notice that the The Customs Broker M/s. Dipak H Shah. (C.B. License No. 11/610: PAN No. AAFPS2538G) did not exercise due diligence in discharging their obligations as mandated under Regulation 10(d), 10(e), 10(f), of the CBLR, 2018 and for wilful intentional violation, the license of M/s. Dipak H Shah (C.B. License No. 11/610, PAN No. AAFPS2538G) was liable for revocation under regulation 14 of the CBLR,2018.

15.3.3 IO also submitted that M/s Dipak H Shah (11/610) were the Customs Broker in the present case and during the course of investigation prima facie, it has been settled to a considerable extent that they have filed 01 Shipping Bill for facilitating fraudulent export by wilfully disregarding the provisions of the Customs Brokers Licensing Regulations, 2018 that caused huge loss to government exchequer.

e filed 01 Shipping Bill for facilitating fraudulent export by wilfully disregarding the provisions of the Customs Brokers Licensing Regulations, 2018 that caused huge loss to government exchequer.

1O submitted that the charges framed against the Customs Broker in the Show Cause Notice are discussed hereunder with corresponding findings 15.3.4 Article of Charge-I :- Violation of Regulation 10 (d) of CBLR, 2018: IO submitted that it is evident from the statements of Shri Naresh Jayanti Lal Doshi Partner of M/s Doshi Impex, the exporter and Sh. Nimish Shah proprietor of Dipak H Shah (CB) that except for a collecting the KYC documents which they merely verified, they had not met with the exporter and verified the manner in which the exporter would be procuring the goods so as to establish eligibility of the exporter for benefits of the drawback scheme of export incentives. The CB has not made any positive statement to the effect that they had suitably advised their clients i.e. the exporters about the provisions of Customs Act and regulations concerning their shipments. They have not produced any evidence at the time of investigations and again during this inquiry to indicate that they had advised their clients in this to comply with the provision of the Customs Act, other allied Acts and the rules and regulations.

investigations and again during this inquiry to indicate that they had advised their clients in this to comply with the provision of the Customs Act, other allied Acts and the rules and regulations. Further, nothing on record has come to my notice which indicates that the CB has brought the facts that the exporter was not in possession of documentation to prove they were eligible for drawback and the importer or its beneficial owner were in contravention of the Customs Act, 1962, to the notice of the Deputy Commissioner the non-compliance of relevant laws. IO submitted that the charge levelled against the Customs Broker M/s Dipak H Shah (11/610) for violation of Regulation 10 (d) of the CBLR, 2018 stands Proved. 15.3.5 Article of Charge-II :- Violation of Regulation 10 (e) of CBLR, 2018

IO submitted that the Customs Broker M/s Dipak H Shah (11/610) has brought nothing on record to prove that they ensured due diligence to ascertain the correctness of information which he had imparted to his client. Here it is an accepted fact that the exporter and the CB were corresponding via email to the limited extent receiving copies of documents like Packing list and invoice and sending check list for verification and receipt of confirmation of the details in the check list. It is also an undisputed fact that the CB is involved in only one consignment of the exporter and had not previously been involved with this exporter. It therefore, was imperative that the CB had paid more attention than he would have with respect to exporters he was otherwise regularly operating with.

t previously been involved with this exporter. It therefore, was imperative that the CB had paid more attention than he would have with respect to exporters he was otherwise regularly operating with. The CB has not brought any evidence to show that he had been careful and diligent when this clearly it was a case of first export through him by the exporters, more so when it involved revenue/ drawback. Thus, CB failed to conduct due diligence, which led to the fraudulent availment of Drawback by the exporter.

IO submitted that in absence of evidence to the contrary the charge levelled against the Customs Broker M/s Dipak H Shah (11/610) for violation of Regulation 10 (e) of the CBLR, 2018 stands Proved.

15.3.6 Article of Charge-III :- Violation of Regulation 10 (f) of CBLR, 2018: IO submitted that he found that the CB would be well aware of the facts that the goods sought to be exported under the drawback scheme are required to compliant with the provisions of the scheme and should be backed by appropriate documentation, it was imperative that the CB’s to have informed the exporter of the requirements of Customs Law and conveyed the details of all the instructions, orders and public notices issued by the Customs authorities from time to time in respect of claims of drawback on exported goods. The fact that the exporter exported goods in violation of the Customs law indicates that the CB had withheld information to the exporter in this regard.

ect of claims of drawback on exported goods. The fact that the exporter exported goods in violation of the Customs law indicates that the CB had withheld information to the exporter in this regard.

10 submitted that the charge levelled against the Customs Broker M/s Dipak H Shah (11/610) for violation of Regulation 10 (f) of the CBLR, 2018 stands Proved.

15.3.7 The Customs Broker in their written submissions and submissions during personal hearing have denied all the allegations and contended that they have fulfilled all the obligations as per the CBLR, 2018. IO submitted that he found that the CB have relied upon the various case laws, however ratio of those judgements are not applicable in the instant case as the CB knowingly did not take appropriate measures to complete a due diligence of the claims of the exporter, did not properly advice the exporter of the laws governing the export under claims of drawback and treated the transaction :

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as a routine affair when they were fully aware that this was a the first and only transaction through them.

15.3.8 The CB is also found involved in another export fraud case for which their license has been already revoked by competent authority and CB has challenged this in CESTAT.

16. PERSONAL HEARING AND RECORDS OF PERSONAL HEARING :-

A personal hearing was granted to Customs Broker on 10.10.2023. Shri Nimish Dipak Shah, proprietor of the CB firm alongwith Shri Mayur Faria, Advocate appeared for personal hearing and represented the CB. They submitted copy of written reply dated 13.06.2023 which is earlier submitted to inquiry officer and reiterated the contents there on.

17. DISSCUSSION AND FINDINGS:-

1 have gone through the case, material evidence on record, the Show Cause Notice dated 21.03.2023, and Inquiry Report dated 28.08.2023, written and oral submissions of the said CB. 17.1 1 observe that the charges against the said CB is of violation of regulation 10(d), 10(e) and 10(f) of CBLR, 2018 made vide Show Cause Notice No. 52/2022-23 dated 21.03.2023. The Inquiry Officer vide inquiry report dated 28.08.2023 held the charges of violation of regulations 10(d), 10(e) and 10(f) of CBLR, 2018 as “Proved”. 17.2 For brevity, I refrain from reproducing the brief facts of the case which have already being discussed above. I, now, examine the charges in the SCN sequentially.

17.2.1 With regard to violation of Regulation 10(d) of CBLR,

2018;

| observe that the said regulation 10(d) of CBLR, 2018 reads as: - “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 noncompliance, shail bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be;”

I find that IO in his report submitted that CB did not verified the manner in which the exporter would be procuring the goods so as to establish eligibility of the exporter for benefits of the drawback scheme of export incentives. Thus, IO held that the violation of regulation 10 (d) of CBLR, 2018 by the CB stands proved. 1 find from the offence report that various export firms including M/s. Doshi Impex was procuring fake purchase bills against the export consignments from one Mr. Suhel Ansari. M/s Doshi Impex claimed higher and undue drawback by overvaluing the exports, exporting cheaper material.

ing fake purchase bills against the export consignments from one Mr. Suhel Ansari. M/s Doshi Impex claimed higher and undue drawback by overvaluing the exports, exporting cheaper material.

I also find that Shri Naresh Jayanti Lal Doshi Partner in M/s Doshi Impex in his statement recorded on 30.11.2017 & 07.03.2022 under Section 108 of the Customs Act, stated that during the material period they have not been registered with the erstwhile Central Excise Act, 1944. I find that during investigation the exporter failed to produce any documents in respect of manufacturing, production or use of any imported material in impugned export goods and thus violated the provisions of Drawback Rule, 1995. I also find that as per Consulate General of India, UAE, Dubai, enquiry report, original/actual unit value of the exported goods were found abnormally low compared to declared value in the Shipping Bills. Hence, it is not possible that the exporter without wilful collusion with CB, exported the impugned goods. Hence, the CB cannot shy away from the responsibilities & obligations cast upon them under the CBLR, 2018.

possible that the exporter without wilful collusion with CB, exported the impugned goods. Hence, the CB cannot shy away from the responsibilities & obligations cast upon them under the CBLR, 2018.

In this context, I rely upon the judgment of Hon’ble CESTAT, Mumbai in the case of M/s Eagle Transport Services Vs Commissioner of Customs, Mumbai in 1997 (96) E.L.T. 469 (Tribunal) wherein though the matter was different yet the ratio of judgement may be applied to the present case. In this case, Hon’ble CESTAT, Mumbai has held at para no. 7 (relevant portion) that “a Custom house agent has a very significant role to play in the clearance of goods through Customs and Port Trust. Such clearance involves application of many specialized laws and detailed procedures often contain complex statutory requirements, It is for this reason that Customs Brokers have been licensed. Before he is granted permanent license, he has to qualify an examination in which his knowledge of relevant procedures is vested. The object of these regulations is to ensure that the Customs Brokers acts honestly and efficiently in the conduct of their business. It is not difficult to foresee the consequences that would aim the Custom House Agent does not co-act in such a manner, The Custom House Agent makes various representations before the Custom House on behalf of the importer and exporter relating to the nature of the goods conditions under which they were imported their value etc.

House Agent makes various representations before the Custom House on behalf of the importer and exporter relating to the nature of the goods conditions under which they were imported their value etc. The statements that he makes and the information that he provide are crucial for assessing the goods to duty and deciding whether the import is prohibited or not. The Custom House Agent thus can the status of a professionally qualified person akin to an advocate, Chartered Accountant or number of other professions which requires a minimum standards of knowledge for minimum standards of conduct, If the Custom House Agent acts negligently or dishonestly, the Custom House can be defrauded money due to the Government, and in goodfaith permit import or export ofprohibited goods.” From the above facts and circumstances, I am of the considered view

that the CB failed to advise the exporter to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof and in case of non compliance did not bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs. Therefore, I hold that the CB has violated the provisions of Regulation 10(d) of the CBLR, 2018.

17.2.2 With regard to violation of Regulation 10 (e) of CBLR, 2018: I observe that the said regulation 10(e) of CBLR, 2018 reads as : -

“A Customs broker shall exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage;"

I find that IO in his report submitted that it is an accepted fact that the exporter and the CB were corresponding via email to the limited extent receiving copies of documents like Packing list and invoice and sending check list for verification and receipt of confirmation of the details in the check list. The CB has not brought any evidence to show that he had been careful and diligent when it was a case of first export through him by the exporter, more so when it involved revenue/ drawback. Thus, CB failed to conduct due diligence, which led to the fraudulent availment of Drawback by the exporter. Thus, IO held that the violation of regulation 10(e) of CBLR, 2018 by the CB is proved.

I find from the offence report that as per Consulate General of India, Dubai, UAE enquiry report, original/actual unit value of the exported goods were found abnormally low compared to the declared value in the Shipping Bills which clearly shows that transaction value is incorrect, inflated, value of goods misdeclared by the exporter. Therefore, I find that CB did not exercise due diligence and did not impart the information relating to Drawback Rules to the client but aided the exporter in availing the undue drawback by overvaluing the exports, whereas in reality cheaper material was exported.

not impart the information relating to Drawback Rules to the client but aided the exporter in availing the undue drawback by overvaluing the exports, whereas in reality cheaper material was exported. It is obligations and duty of the CB to exercise due diligence to ascertain the correctness of information in respect of any information which they impart to a client with reference to any work related to cargo, the CB failed to do so, otherwise exporter could not have made an attempt to export goods at such high valuations on the basis of fake invoices, which is a gross violation on the part of the CB under the provisions of the Regulation 10(e) of the CBLR, 2018.

In view of the above, I am of the considered view that the CB failed to exercise due diligence to ascertain the correctness of information in respect of fraudulent exported goods. Therefore, I hold that the CB has violated the provisions of Regulation 10(e) of the CBLR, 2018.

"-*:17.2.3 With regard to violation of Regulation 10(f) of CBLR, 2018:

I observe that the said regulation 10(f) of CBLR, 2018 reads as: - “A Customs broker shall not withhold information contained in any order, instruction or public notice relating to clearance of cargo or baggage issued by the Customs authorities, as the case may be, from a client who is entitled to such information; "

I find that IO in his report submitted that the CB would be well aware of the facts that the goods sought to be exported under the drawback scheme are required to compliant with the provisions of the scheme and should be backed by appropriate documentation, it was imperative that the CB’s to have informed the exporter of the requirements of Customs Law and conveyed the details of all the instructions, orders and public notices issued by the Customs authorities from time to time in respect of claims of drawback on exported goods. The fact that the exporter exported goods in violation of the Customs law indicates that the CB had withheld information to the exporter in this regard. Thus, IO held that the violation of regulation 10/(f) of CBLR, 2018 by the CB is proved.

violation of the Customs law indicates that the CB had withheld information to the exporter in this regard. Thus, IO held that the violation of regulation 10/(f) of CBLR, 2018 by the CB is proved.

I find from the offence report that the exporter did not furnish the declarations at the time of exports in format annexed with the circular No. 16/2009-Customs dated 25.05.2009. As per the said format exporter were inter-alia required to declare the name and complete address of the traders from whom export goods had been purchased. The exporter was also required to declare that they were not the manufacturer of the export goods and were not registered under the erstwhile Central Excise Act, 1944. They were also required to declare that no rebate (input rebate or/ and final product rebate) would be taken against the exports made against the Shipping Bills. However, during the course of investigation, M/s. Doshi Impex failed to produce any such declaration. Thus, the CB failed to verify the declarations at the time of exports in format annexed with the circular No.16/2009-Customs dated 25.05.2009, which is gross negligence on the part of the CB.

tion. Thus, the CB failed to verify the declarations at the time of exports in format annexed with the circular No.16/2009-Customs dated 25.05.2009, which is gross negligence on the part of the CB.

From the above facts, I am of the considered view that the CB failed to inform the exporter about the circular No.16/2009-Customs dated 25.05.2009. Therefore, I hold that the CB has violated the provisions of Regulation 10(f of the CBLR, 2018. 18. While deciding the matter, I rely upon following judgements :- 18.1 The Hon’ble Supreme Court in the case of Commissioner of Customs V/s. K. M, Ganatra and Co. in civil appeal no. 2940 of 2008 upheld the observation of Hon’ble CESTAT Mumbai in M/s. Noble Agency V/s. Commissioner of Customs, Mumbai that:

“A Custom Broker occupies a very important position in the customs House

)

and was supposed to safequard the interests of both the importers and the Customs department. A lot of trust is kept in CB by the Government Agencies and toensure made under CBLR, 2013 and therefore rendered themselves liable for penal action under CBLR, 2013 (now CBLR, 2018)”. 18.2 Incase of M/s Cappithan Agencies Versus Commissioner Of Customs, Chennai-Viii, (2015/10) LCX 0061), the Hon'ble Madras High Court had opined

that :-

ction under CBLR, 2013 (now CBLR, 2018)”. 18.2 Incase of M/s Cappithan Agencies Versus Commissioner Of Customs, Chennai-Viii, (2015/10) LCX 0061), the Hon'ble Madras High Court had opined

that :-

i. The very purpose of granting a licence to a person to act as a Customs House Agent is for transacting any business relating to the entry or departure of conveyance or the import or export of goods in any customs station. For that purpose, under Regulation 9 necessary examination is conducted to test the capability of the person in the matter ofpreparation of various documents determination of value procedures for assessment and payment of duty, the extent to which he is conversant with the provisions of certain enactments, etc. Therefore, the grant of licence to act as a Custom House Agent has got a definite purpose and intent. On a reading of the Regulations relating to the grant of licence to act as CHA, it is seen that while CHA should be in a position to act as agent for the transaction of any business relating to the entry or departure of conveyance or the import or export of goods at any customs station, he should also ensure that he does not act as an Agent for carrying on certain illegal activities of any of the persons who avail his services as CHA, In such circumstances, the person playing the role of CHA has got greater responsibility.

t as an Agent for carrying on certain illegal activities of any of the persons who avail his services as CHA, In such circumstances, the person playing the role of CHA has got greater responsibility. The very description that one should be conversant with the various procedures including the offences under the Customs Act to act as a Custom House Agent would show that while acting as CHA, he should not be a cause for violation of those provisions. A CHA cannot be permitted to misuse his position as CHA by taking advantage of his access to the Department, The grant of licence to a person to act as CHA ts to some extent to assist the Department with the various procedures such as scrutinizing the various documents to be presented in the course of transaction of business for entry and exit of conveyances or the import or export of the goods. In such circumstances, great confidence is reposed in a CHA. Any misuse ofsuch position by the CHA will have far reaching consequences in the transaction of business by the customs house officials. Therefore, when, by such malpractices, there is loss of revenue to the custom house, there is every justification for the Respondent in treating the action of the Petitioner Applicant as detrimental to the interest of the nation and accordingly, final order of revoking his licence has been passed.

ti. In view of the above discussions and reasons and the finding that the

as detrimental to the interest of the nation and accordingly, final order of revoking his licence has been passed.

ti. In view of the above discussions and reasons and the finding that the

: petitioner has not fulfilled their obligations under above said provisions of the Act, Rules and Regulations, the impugned order, confirming the order for continuation ofprohibition of the licence of the petitioner is sustainable in law, which warrants no interference by this Court, Accordingly, this writ petition is dismissed. 18.3 The Hon'ble CESTAT Delhi in case of M/S, Rubal Logistics Pvt. Ltd. Versus Commissioner of Customs (General) wherein in (para 6.1) opined that :- “Para 6.1 These provisions require the Customs Broker to exercise due diligence to ascertain the correctness ofany information and to advice the client accordingly. Though the CHA was accepted as having no mensrea of the noticed mis-declaration /under- valuation or mis-quantification but from his own statement acknowledging the negligence on his part to properly ensure the same, we are of the opinion that CH definitely has committed violation of the above mentioned Regulations. These Regulations caused a mandatory duty upon the CHA, who is an important link between the Customs Authorities and the importer/exporter. Any dereliction/ lack of due diligence since has caused the Exchequer loss in terms of evasion of Customs Duty, the original adjudicating authority has rightly imposed the penalty upon the appellant herein.”

ction/ lack of due diligence since has caused the Exchequer loss in terms of evasion of Customs Duty, the original adjudicating authority has rightly imposed the penalty upon the appellant herein.”

I have gone through the various Case Laws referred by the said CB in his various submissions and observed that the ratios of the judgment of said Case Laws are not squarely applicable in the instant case, as the facts and circumstances are different and clearly distinguishable. 20. In a regime of trade facilitation, a lot of trust is being placed on the Customs Broker who directly deals with the importers/exporters. Failure to comply with regulations by the CB mandated in the CBLR,2018 gives room for unscrupulous persons to get away with import-export violations and revenue frauds. The CB deliberately and knowingly indulged himself in declaring higher value of the goods using fake invoices, to avail higher export benefits. The facts on record prove that CB had violated various provisions of CBLR, 2018 with Mens Tea.

d himself in declaring higher value of the goods using fake invoices, to avail higher export benefits. The facts on record prove that CB had violated various provisions of CBLR, 2018 with Mens Tea.

[hold that the proof of charges in inquiry are acceptable and tenable based on the available evidence, the facts and circumstances of the case, which certainly warrant penal action against the CB. Therefore, for their acts of omission and commission, CB M/s. Dipak H Shah (11/610) is held liable and guilty for violating the provisions of CBLR, 2018 as mentioned above. I hold that the CB has failéd to discharge his duties cast upon him with respect to Regulation 10(d), 10{e) and 10(f) of CBLR, 2018 and is liable for penal action. Accordingly, I pass the following order.

ORDER

I, Principal Commissioner of Customs (General, in exercise of the power conferred upon me under Regulation 17(7) of the CBLR, 2018, pass the following order:

(i) The CB License No. 11/610 is already revoked in another case vide Order-InOriginal No. 12/CAC/CC(G)/SRP/CBS(Admn) dated 16.02.2015 under Regulation 20(1) of the CHALR, 2004. Therefore, I hereby order revocation of the CB License No.11/610 under Regulation 14 of the CBLR, 2018, which shall come into force, if any, contrary decision is taken at any higher appellate forum in the above another case. (ii) I note that entire amount of security deposit furnished by the CB has already been forfeited in another case vide Order-In-Original No. 12/CAC/CC(G)/SRP/CBS(Admn) dated 16.02.2015 under Regulation 20(1) of the CHALR, 2004. Therefore, | hereby order forfeiture of the entire amount of security under Regulation 14 of the CBLR, 2018 which shall come into force, if any, contrary decision is taken at any higher appellate forum in the above another case. (iii) 1 hereby impose penalty of Rs. 50,000/-(Rupees Fifty Thousand only) on M/s. Dipak H Shah (11/610) (PAN: AAFPS2538G), under Regulation 18 of the CBLR, 2018.

(iv) I hereby order that the CB surrender the original License as well as all the ‘F’, ‘G’ & ‘H’ cards issued there under immediately. {if not done yet)

G), under Regulation 18 of the CBLR, 2018.

(iv) I hereby order that the CB surrender the original License as well as all the ‘F’, ‘G’ & ‘H’ cards issued there under immediately. {if not done yet)

This order is passed without prejudice to any other action which may be taken or purported to be taken against the Customs Broker and their employees under the Customs Act, 1962, or any other act for the time being in force in the Union of India. Aol (SUNIL JAIN) PRINCIPAL COMMISSIONER OF CUSTOMS (GENERAL) MUMBAI ZONE-I

To, M/s. Dipak H Shah (CB No. 11/610) (PAN: AAFPS253aq), 5 Mahinder Chamber, Gr. Floor, Duke's Factory, WT Patil Marg, Chembur, Mumbai-400-071

FMEPFOPLYSLIN

Copy to,

The Pr. Chief Commissioner/ Chief Commissioner of Customs, Mumbai I,

II, Ill Zone.

All Pr. Commissioners/Commissioners of Customs, Mumbai I, II, III Zone
DRI, MZU, Mumbai.
SITB(X), ACC, Sahar, Mumbai
CIU's of NCH, ACC & JNCH
EDI of NCH, ACC & JNCH
ACC (Admn), Mumbai with a request to circulate among all departments.
JNCH (Admn) with a request to circulate among all concerned.
Cash Department, NCH, Mumbai.
Notice Board
Office Copy
Guard File (Admin)

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