A shipper has exported inferior quality of RMG, blouses etc and gained huge drawback amount. Customs Dept investigated the case and imposed penalty on Customs Broker u/s 114 & 114AA apart from their action against shipper. There were two middleman between the exporter and the Customs Brokers, who took cash from shippers. The allegation against the Customs Broker is that having received ₹ 1 lakh in cash per consignment over and above the usual charges, he has actively involved in the fraud.
The observations of Hon’ble CESTAT as follows ;
The
Customs Broker in his normal course of business, did the clearance for exporter
- RMG, blouses etc., He was merely acting in the capacity of facilitator of the customs
transaction and was bound to facilitate the authorised clearance work of exporter.
Therefore, in the present case as the Customs Broker was only facilitating
the customs transaction on behalf of principal (exporter), penalty is not
imposable, otherwise all the customs transaction will come to halt, if
penalty is imposed on CB for the omission & commission of exporter/
importer.
Moreover
in the present case, the CB had no knowledge of the quality of goods being
exported neither was capable to judge the quality of RMG, since he was never
involved in the business of sale, purchase, procure and manufacture of RMG, MMF
and ladies blouse. The sample provided to the CB firm was of decent quality.
Further the CB was not aware and had no knowledge that the RMG, MMF and ladies
blouse being exported is of inferior quality. In absence of mens-rea or
malafide, the CB cannot be punished. The penalty upheld by ld. Commissioner of Customs
(Appeals) is based on erroneous and ill-founded ground.
The
Customs Broker has filed Shipping Bills on the basis of documents such as
invoice, packing list, etc. supplied by client/ forwarder on the reasonable
belief that such documents are genuine, that their filing of shipping bills
were not with intent to fraudulently claim the drawback, or collude with the
exporter.
That with respect to the
said consignments, all the documents were procured such as invoices, packing
list, SDF form and other export related documents including shipper’s
authorisation. The CB has received work through from one of the
freight forwarder and that the CB was not in direct contact with shipper/
exporter.
The
ld. Commissioner of Customs (Appeals) erred in observing that the CB is
involved in the preparation of inflated invoices without any corroborative
evidence. The Commissioner has failed to assign any motive to substantiate the
appellant’s involvement in the availment of duty drawback or any proceeds
flowing to them.
The
confessional statement made by the middlemen cannot be relied upon and made a
ground to prosecute the Customs Broker,solely based on the statement recorded
under Section 108 of the Customs Act, 1962.
Corroborative
evidence is necessary to initiate proceedings against the Customs Broker, as
held by the Hon’ble Supreme Court in Vinod Solanki vs. Union of India (2008) 16
SCC 537 and Noor Aga vs. State of Punjab and Anr -2008 (56) BLJR 2254; Criminal
Appeal No. 1034 of 2008 (arising out of SLP (Crl.) No. 5597 of 2006, which is
missing in the present case.
Ld. Commissioner has
completely disregarded Section 138A of Customs Act, 1962, as the CB has
been penalised merely on the basis of preponderance of probability. He has not
been able to assign any motive or knowledge of cheap quality RMG, MMG and
ladies blouses to the appellant, beyond reasonable doubt.
The
allegation against the Customs Broker of their having received ₹ 1 lakh per
consignment is not substantiated, over and above the usual charges. Thus,
receipt of ₹ 1 lakh by middlemen is not the amount received by the Customs
Broker
There
is no allegation of any flow back of ill gotton draw back money to the Customs
Broker. The consignment under seizure was to be exported to Dubai for which as
per the inspection norms, prescribes 100% examination of the export
consignment. Further, it has nowhere come on record that Customs Broker was
present at the time of packing and stuffing of container for shipping. Further,
there is no allegation that Customs Broker has cooked or concocted any document
for presenting it to the Customs, knowing it to be false.
Penalty is imposable under
Section 114 of the Act where any person who, in relation to any goods, does or
omits to do any act, which act or omission would render such goods liable to
confiscation under section 113 or abets the doing or omission of such an act.
From the facts on record, that the CB has not done any act of omission or
commission leading to violation of any of the provisions mentioned in Section
113 of the Customs Act.
Section 114AA provides
for penalty, if a person knowingly or intentionally makes, signs or uses, or
causes to be made, signed or used, any declaration, statement or document which
is false or incorrect in any material particular, in the transaction of any
business for the purposes of this Act, shall be liable to a penalty.
The
Customs Broker has given cogent explanation as regards the valuation that the
samples shown to them were of good quality and hence on such reasonable belief
they have undertaken the clearance work. No case is made out that the Customs
Broker knowingly filed the shipping bills that the goods are overvalued.
Accordingly, penalty under Section 114AA is also not imposable.
CUSTOMS BROKER VERSUS
COMMISSIONER OF CUSTOMS, CESTAT
NEW DELHI, Pronounced
on 02.09.2020
Key
takeaway for the fellow CB’s from this case :
1. Make sure to get 100% KYC documents including
an authorisation letter
2. Deal directly with Importers and
exporters & be careful when you deal through others.
3.
Whenever get doubt about the valuation
or quality of the product shipped, try to get the sample of the product for
your satisfaction and for records. In above case CB has verified the quality of
the product shown to him, which saved him
from penalty. Try to study the value declared vs quality of the product.
4.
Make
sure, service charges are received against proper tax invoice to bank account
directly by chq/DD/NEFT/RTGS/IMPS.
Please
Visit :https://eximblogs.blogspot.com/
#Customs Law Quick Bites-31
No comments:
Post a Comment